EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FRONTIER OIL CORPORATION,
FRONT RANGE HIMALAYA CORPORATION,
FRONT RANGE MERGER CORPORATION,
HIMALAYA MERGER CORPORATION
AND
XXXXX CORPORATION
DATED AS OF MARCH 30, 2003
TABLE OF CONTENTS
PAGE
ARTICLE 1 FORMATION OF PARENT; THE MERGERS........................................................................2
Section 1.1 FORMATION OF PARENT; MERGER SUBS.............................................................2
Section 1.2 THE MERGERS..................................................................................2
Section 1.3 CLOSING; EFFECTIVE TIME......................................................................2
Section 1.4 CERTIFICATES OF INCORPORATION................................................................3
Section 1.5 BYLAWS.......................................................................................3
Section 1.6 DIRECTORS AND EXECUTIVE OFFICERS.............................................................3
Section 1.7 ACTIONS OF FRONTIER AND XXXXX................................................................4
Section 1.8 ACTIONS OF PARENT............................................................................4
ARTICLE 2 CONVERSION OF SECURITIES................................................................................4
Section 2.1 EFFECT ON CAPITAL STOCK OF FRONTIER AND MERGER SUB ONE.......................................4
Section 2.2 EFFECT ON CAPITAL STOCK OF XXXXX AND MERGER SUB TWO..........................................5
Section 2.3 EFFECT ON PARENT COMMON STOCK................................................................7
Section 2.4 SURRENDER OF XXXXX SHARES....................................................................7
Section 2.5 XXXXX STOCK OPTIONS AND OTHER STOCK-BASED AWARDS.............................................8
Section 2.6 FRONTIER STOCK OPTIONS......................................................................10
Section 2.7 EXCHANGE PROCEDURES.........................................................................10
Section 2.8 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED XXXXX SHARES......................................11
Section 2.9 NO FURTHER OWNERSHIP RIGHTS IN XXXXX COMMON STOCK OR FRONTIER COMMON STOCK..................12
Section 2.10 NO FRACTIONAL SHARES OF PARENT COMMON STOCK.................................................12
Section 2.11 TERMINATION OF EXCHANGE FUND................................................................12
Section 2.12 NO LIABILITY................................................................................13
Section 2.13 INVESTMENT OF THE EXCHANGE FUND.............................................................13
Section 2.14 LOST CERTIFICATES...........................................................................13
Section 2.15 WITHHOLDING RIGHTS..........................................................................13
Section 2.16 FURTHER ASSURANCES..........................................................................13
Section 2.17 STOCK TRANSFER BOOKS........................................................................14
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF XXXXX................................................................14
Section 3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY...............................................14
Section 3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS............................................14
Section 3.3 CAPITALIZATION..............................................................................15
Section 3.4 SUBSIDIARIES................................................................................15
Section 3.5 NO VIOLATION................................................................................15
Section 3.6 NO CONFLICT.................................................................................16
Section 3.7 SEC DOCUMENTS...............................................................................17
Section 3.8 LITIGATION AND LIABILITIES..................................................................17
Section 3.9 ABSENCE OF CERTAIN CHANGES..................................................................18
Section 3.10 TAXES.......................................................................................18
Section 3.11 EMPLOYEE BENEFIT PLANS......................................................................19
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Section 3.12 LABOR MATTERS...............................................................................22
Section 3.13 ENVIRONMENTAL MATTERS.......................................................................23
Section 3.14 INTELLECTUAL PROPERTY.......................................................................24
Section 3.15 TITLE TO PROPERTIES; CONDITION OF ASSETS....................................................25
Section 3.16 INSURANCE...................................................................................25
Section 3.17 NO BROKERS..................................................................................25
Section 3.18 OPINION OF FINANCIAL ADVISOR................................................................26
Section 3.19 CONTRACTS; DEBT INSTRUMENTS.................................................................26
Section 3.20 RECOMMENDATION; VOTE REQUIRED...............................................................27
Section 3.21 CERTAIN APPROVALS...........................................................................27
Section 3.22 CERTAIN CONTRACTS...........................................................................27
Section 3.23 NO RIGHTS PLAN OR AGREEMENT.................................................................27
Section 3.24 SUPPORT AGREEMENTS..........................................................................27
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF FRONTIER.............................................................27
Section 4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY...............................................28
Section 4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS............................................28
Section 4.3 CAPITALIZATION..............................................................................28
Section 4.4 SUBSIDIARIES................................................................................29
Section 4.5 NO VIOLATION................................................................................29
Section 4.6 NO CONFLICT.................................................................................29
Section 4.7 SEC DOCUMENTS...............................................................................30
Section 4.8 LITIGATION AND LIABILITIES..................................................................31
Section 4.9 ABSENCE OF CERTAIN CHANGES..................................................................31
Section 4.10 TAXES.......................................................................................32
Section 4.11 EMPLOYEE BENEFIT PLANS......................................................................33
Section 4.12 LABOR MATTERS...............................................................................35
Section 4.13 ENVIRONMENTAL MATTERS.......................................................................36
Section 4.14 INTELLECTUAL PROPERTY.......................................................................37
Section 4.15 TITLE TO PROPERTIES; CONDITION OF ASSETS....................................................37
Section 4.16 INSURANCE...................................................................................38
Section 4.17 NO BROKERS..................................................................................38
Section 4.18 OPINION OF FINANCIAL ADVISOR................................................................38
Section 4.19 CONTRACTS; DEBT INSTRUMENTS.................................................................39
Section 4.20 RECOMMENDATION; VOTE REQUIRED...............................................................39
Section 4.21 CERTAIN APPROVALS...........................................................................40
Section 4.22 CERTAIN CONTRACTS...........................................................................40
Section 4.23 NO RIGHTS PLAN OR AGREEMENT.................................................................40
Section 4.24 SUPPORT AGREEMENTS..........................................................................40
ARTICLE 5 COVENANTS..............................................................................................40
Section 5.1 CONDUCT OF BUSINESS.........................................................................40
Section 5.2 NO SOLICITATION BY XXXXX....................................................................46
Section 5.3 NO SOLICITATION BY FRONTIER.................................................................47
Section 5.4 MEETINGS OF STOCKHOLDERS....................................................................49
Section 5.5 FILINGS; REASONABLE BEST EFFORTS............................................................49
Section 5.6 INSPECTION..................................................................................51
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Section 5.7 PUBLICITY...................................................................................51
Section 5.8 REGISTRATION STATEMENT......................................................................52
Section 5.9 LISTING APPLICATION.........................................................................53
Section 5.10 AGREEMENTS OF RULE 145 AFFILIATES...........................................................53
Section 5.11 EXPENSES....................................................................................53
Section 5.12 INDEMNIFICATION AND INSURANCE...............................................................54
Section 5.13 EMPLOYEE BENEFITS...........................................................................55
Section 5.14 TAX QUALIFICATION...........................................................................58
Section 5.15 DIVIDENDS...................................................................................59
Section 5.16 GOVERNANCE MATTERS; HEADQUARTERS; COMPANY NAME..............................................59
Section 5.17 NO CONTROL OF OTHER PARTY'S BUSINESS........................................................60
Section 5.18 TOTAL XXXXX COMMON STOCK NUMBER CERTIFICATE.................................................60
Section 5.19 CONTINGENT VALUE RIGHTS AGREEMENT...........................................................60
ARTICLE 6 CONDITIONS.............................................................................................61
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGERS.................................61
Section 6.2 CONDITIONS TO OBLIGATION OF XXXXX TO EFFECT THE MERGERS.....................................62
Section 6.3 CONDITIONS TO OBLIGATION OF FRONTIER TO EFFECT THE MERGERS..................................62
ARTICLE 7 TERMINATION............................................................................................63
Section 7.1 TERMINATION BY MUTUAL CONSENT...............................................................63
Section 7.2 TERMINATION BY FRONTIER OR XXXXX............................................................63
Section 7.3 TERMINATION BY XXXXX........................................................................64
Section 7.4 TERMINATION BY FRONTIER.....................................................................64
Section 7.5 EFFECT OF TERMINATION.......................................................................65
Section 7.6 EFFECT OF VOTE..............................................................................66
ARTICLE 8 GENERAL PROVISIONS.....................................................................................67
Section 8.1 SURVIVAL....................................................................................67
Section 8.2 NOTICES.....................................................................................67
Section 8.3 ASSIGNMENT; BINDING EFFECT; BENEFIT.........................................................68
Section 8.4 ENTIRE AGREEMENT............................................................................68
Section 8.5 AMENDMENTS..................................................................................69
Section 8.6 GOVERNING LAW; WAIVER OF JURY TRIAL.........................................................69
Section 8.7 COUNTERPARTS................................................................................69
Section 8.8 HEADINGS....................................................................................69
Section 8.9 INTERPRETATION..............................................................................69
Section 8.10 WAIVERS.....................................................................................70
Section 8.11 SEVERABILITY................................................................................70
Section 8.12 ENFORCEMENT OF AGREEMENT; LIMITATION ON DAMAGES.............................................70
Section 8.13 OBLIGATION OF MERGER SUB ONE AND MERGER SUB TWO.............................................71
Section 8.14 EXTENSION; WAIVER...........................................................................71
Section 8.15 DEFINITIONS.................................................................................71
Section 8.16 DISCLOSURE LETTERS..........................................................................74
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EXHIBITS
Exhibit A PARENT CHARTER............................................................................A-1
Exhibit B PARENT BYLAWS.............................................................................B-1
Exhibit C FORM OF XXXXX XXXXXX SUPPORT AGREEMENT....................................................C-1
Exhibit D FORM OF FRONTIER AFFILIATE'S SUPPORT AGREEMENT............................................D-1
Exhibit E FORM OF XXXXX AFFILIATE'S RULE 145 AGREEMENT..............................................E-1
Exhibit F FORM OF REGISTRATION RIGHTS AGREEMENT.....................................................F-1
Exhibit G FORM OF FRONTIER AFFILIATE'S RULE 145 AGREEMENT...........................................G-1
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This AGREEMENT AND PLAN OF MERGER (including the Exhibits hereto, this
"Agreement"), dated as of March 30, 2003, is among FRONTIER OIL CORPORATION, a
Wyoming corporation ("Frontier"), FRONT RANGE HIMALAYA CORPORATION, a Wyoming
corporation ("Parent"), FRONT RANGE MERGER CORPORATION, a
Delaware corporation
and direct wholly owned subsidiary of Parent ("Merger Sub One"), HIMALAYA MERGER
CORPORATION, a
Delaware corporation and direct wholly owned subsidiary of Parent
("Merger Sub Two"), and XXXXX CORPORATION, a
Delaware corporation ("Xxxxx").
RECITALS
WHEREAS, the respective Boards of Directors of each of Frontier,
Parent, Merger Sub One, Merger Sub Two and Xxxxx xxxx it advisable, fair to and
in the best interests of their respective corporations and stockholders that
Frontier and Xxxxx engage in a business combination in order to advance the long
term strategic business interests of Frontier and Xxxxx;
WHEREAS, upon the terms and subject to the conditions set forth herein,
(i) Merger Sub One will merge with and into Frontier with Frontier as the
surviving corporation (the "Frontier Merger") and (ii) Merger Sub Two will merge
with and into Xxxxx with Xxxxx as the surviving corporation (the "Xxxxx Merger"
and together with the Frontier Merger, the "Mergers");
WHEREAS, upon consummation of the Mergers, (i) each of Frontier and
Xxxxx will become a wholly owned subsidiary of Parent, which has been formed by
Frontier and Xxxxx solely for the purpose of the transactions contemplated by
this Agreement and (ii) Parent will be renamed Frontier Oil Corporation;
WHEREAS, for federal income tax purposes, it is intended that each of
the Frontier Merger and the Xxxxx Merger qualify as a reorganization within the
meaning of section 368(a) of the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder (the "Code"), and/or, taken
together, the Mergers qualify as an exchange described in section 351 of the
Code;
WHEREAS, the Board of Directors of Xxxxx has approved this Agreement
and the Xxxxx Merger and has determined that the Xxxxx Merger is advisable, fair
to and in the best interests of the holders of shares of common stock, par value
$.01 per share, of Xxxxx ("Xxxxx Common Stock") and resolved to recommend
approval and adoption of this Agreement and the Xxxxx Merger by the stockholders
of Xxxxx; and
WHEREAS, the Board of Directors of Frontier has approved this Agreement
and the Frontier Merger and has determined that the Frontier Merger is
advisable, fair to and in the best interests of the holders of shares of common
stock, without par value, of Frontier ("Frontier Common Stock") and resolved to
recommend approval and adoption of this Agreement and the Frontier Merger by the
stockholders of Frontier; and
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
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ARTICLE 1
FORMATION OF PARENT; THE MERGERS
SECTION 1.1 FORMATION OF PARENT; MERGER SUBS.
(a) PARENT. Frontier and Xxxxx have caused Parent to be organized under
the laws of the State of Wyoming, and each owns 50% of the outstanding capital
stock of Parent. The authorized capital stock of Parent consists of 100 shares
of common stock, par value $.01 per share (the "Parent Common Stock"), of which
one share has been issued to Frontier and one share has been issued to Xxxxx.
Frontier and Xxxxx shall take, and shall cause Parent to take, all requisite
action to cause the articles of incorporation of Parent to be in the form of
Exhibit A (the "Parent Charter") and the bylaws of Parent to be in the form of
Exhibit B (the "Parent Bylaws"), in each case, at the Effective Time (as defined
below).
(b) MERGER SUBS. Frontier and Xxxxx have caused Parent to organize, and
Parent has organized, Merger Sub One and Merger Sub Two under the laws of the
State of
Delaware. The authorized capital stock of Merger Sub One consists of
100 shares of common stock, par value $.01 per share (the "Merger Sub One Common
Stock"), all of which are validly issued, fully paid and nonassessable, and are
owned by Parent free and clear of any liens, pledges, charges, encumbrances and
security interests whatsoever ("Liens"). The authorized capital stock of Merger
Sub Two consists of 100 shares of common stock, par value $.01 per share (the
"Merger Sub Two Common Stock"), all of which are validly issued, fully paid and
nonassessable, and are owned by Parent free and clear of any Liens.
SECTION 1.2 THE MERGERS. Upon the terms and subject to the conditions
hereof, in accordance with the
Delaware General Corporation Law (the "DGCL") and
the Wyoming Business Corporation Act (the "WBCA"), as applicable, at the
Effective Time:
(a) THE FRONTIER MERGER. Merger Sub One shall merge with and into
Frontier, with Frontier continuing as the surviving corporation in the Frontier
Merger ("Frontier Surviving Corporation") and the separate corporate existence
of Merger Sub One shall cease. The Frontier Merger shall have the effects
specified in the WBCA and the DGCL. As a result of the Frontier Merger, Frontier
will become a wholly owned subsidiary of Parent.
(b) THE XXXXX MERGER. Merger Sub Two shall merge with and into Xxxxx,
with Xxxxx continuing as the surviving corporation in the Xxxxx Merger ("Xxxxx
Surviving Corporation") and the separate corporate existence of Merger Sub Two
shall cease. The Xxxxx Merger shall have the effects specified in the DGCL. As a
result of the Xxxxx Merger, Xxxxx will become a wholly owned subsidiary of
Parent.
SECTION 1.3 CLOSING; EFFECTIVE TIME.
(a) THE CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the Mergers (the "Closing") shall take place (i) at the offices
of Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, at 4:00
p.m., local time, on the second business day immediately following the day on
which the last to be fulfilled or waived of the conditions set forth in Article
6 (other than those conditions that by their nature are to be satisfied at the
Closing, but subject to fulfillment or waiver of those conditions) shall be
fulfilled or waived in
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accordance herewith or (ii) at such other time, date or place as Frontier and
Xxxxx may agree in writing. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
(b) EFFECTIVE TIME OF THE MERGERS. As soon as practicable on the
Closing Date, Frontier shall file with the Secretary of State of the State of
Wyoming (the "Wyoming Secretary") articles of merger and with the Secretary of
State of the State of
Delaware (the "
Delaware Secretary") a certificate of
merger with respect to the Frontier Merger (such articles of merger and
certificate of merger, together, the "Frontier Certificate of Merger") and Xxxxx
shall file with the
Delaware Secretary a certificate of merger with respect to
the Xxxxx Merger (the "Xxxxx Certificate of Merger," together with the Frontier
Certificate of Merger, the "Certificates of Merger"), which Certificates of
Merger shall be in such form as is required by, and executed and acknowledged in
accordance with, the WBCA and the DGCL, as applicable. The Mergers shall become
effective at such date and time as Frontier and Xxxxx shall mutually agree and
shall be specified in the Certificates of Merger; provided that (i) such date
and time shall be after the time of filing of the Certificates of Merger and
(ii) both Mergers shall become effective at the same date and time. As used in
this Agreement, the term "Effective Time" shall mean the date and time when the
Mergers become effective.
SECTION 1.4 CERTIFICATES OF INCORPORATION.
(a) At the Effective Time, the articles of incorporation of Frontier
shall be the articles of incorporation of Frontier Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
(b) At the Effective Time, the certificate of incorporation of Xxxxx
shall be the certificate of incorporation of Xxxxx Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.5 BYLAWS. At the Effective Time, the bylaws of Merger Sub One
shall be the bylaws of Frontier Surviving Corporation and the bylaws of Merger
Sub Two shall be the bylaws of Xxxxx Surviving Corporation.
SECTION 1.6 DIRECTORS AND EXECUTIVE OFFICERS.
(a) The directors and executive officers of Parent at the Effective
Time shall be as provided in Section 5.16.
(b) The directors of Merger Sub One immediately prior to the Effective
Time shall be the directors of Frontier Surviving Corporation and the officers
of Frontier immediately prior to the Effective Time shall be the officers of
Frontier Surviving Corporation, in each case, until their respective successors
are duly elected and qualified.
(c) The directors of Merger Sub Two immediately prior to the Effective
Time shall be the directors of Xxxxx Surviving Corporation and the officers of
Xxxxx immediately prior to the Effective Time shall be the officers of Xxxxx
Surviving Corporation, in each case, until their respective successors are duly
elected and qualified.
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SECTION 1.7 ACTIONS OF FRONTIER AND XXXXX. Frontier and Xxxxx, in their
capacity as the holders of all the outstanding shares of Parent Common Stock, by
their execution and delivery hereof, unanimously consent to Parent's entering
into and performing this Agreement and the transactions contemplated hereby; and
Parent, in its capacity as the sole stockholder of each of Merger Sub One and
Merger Sub Two, by its execution and delivery hereof, consents to each of such
corporation's entering into and performing this Agreement and the transactions
contemplated hereby. Each of Frontier and Xxxxx shall take all actions necessary
to cause Parent, Merger Sub One and Merger Sub Two to take any actions necessary
in order to consummate the Mergers and the other transactions contemplated
hereby.
SECTION 1.8 ACTIONS OF PARENT. Parent shall cause Merger Sub One and
Merger Sub Two, as applicable, to take all actions necessary to consummate the
Mergers and the other transactions contemplated hereby.
ARTICLE 2
CONVERSION OF SECURITIES
SECTION 2.1 EFFECT ON CAPITAL STOCK OF FRONTIER AND MERGER SUB ONE. At
the Effective Time, by virtue of the Frontier Merger and without any action on
the part of Frontier, Parent, Merger Sub One or any holder of any shares of
Frontier Common Stock:
(a) All shares of Frontier Common Stock that are held by Frontier as
treasury stock or that are owned by Parent, Frontier, Xxxxx Merger Sub One,
Merger Sub Two, any direct or indirect wholly owned Frontier Subsidiary, any
direct or indirect wholly owned Xxxxx Subsidiary or any direct or indirect
wholly owned Parent Subsidiary immediately prior to the Effective Time shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist and no consideration shall be delivered in exchange therefor.
(b) Except as provided in Section 2.1(a), and except for Frontier
Dissenting Shares (as defined in Section 2.1(e)), each outstanding share of
Frontier Common Stock issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive one fully paid and
nonassessable share of Parent Common Stock (the "Frontier Merger
Consideration"). All shares of Parent Common Stock issued pursuant to this
Section 2.1(b) shall be duly authorized and validly issued and free of
preemptive rights, with no personal liability attaching to the ownership
thereof.
(c) All of the shares of Frontier Common Stock converted into the right
to receive shares of Parent Common Stock pursuant to this Section 2.1 shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist and, as of the Effective Time, the holders of shares of Frontier Common
Stock shall be deemed to have received shares of Parent Common Stock (without
the requirement for the surrender of any certificate previously representing any
such shares of Frontier Common Stock or issuance of new certificates
representing Parent Common Stock), with each certificate representing shares of
Frontier Common Stock prior to the Effective Time (a "Frontier Certificate")
being deemed to represent automatically an equivalent number of shares of Parent
Common Stock.
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(d) Each share of Merger Sub One Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of Frontier Surviving Corporation.
(e) "Frontier Dissenting Shares" are shares of Frontier Common Stock
outstanding immediately prior to the Effective Time and held by a stockholder
who shall not have voted in favor of the Frontier Merger and who shall have
demanded payment for such shares in accordance with Article 13 of the WBCA.
Frontier Dissenting Shares shall not be converted into a right to receive the
Frontier Merger Consideration, unless such stockholder fails to perfect,
withdraws or otherwise loses its right to demand payment. If, after the
Effective Time, such stockholder fails to perfect, withdraws or loses its right
to demand payment, such shares shall be treated as if they had been converted as
of the Effective Time into the right to receive the Frontier Merger
Consideration. Frontier shall give Xxxxx and Parent prompt notice of any demands
received by Frontier for payment for shares of Frontier Common Stock. Except as
required by applicable law or with the prior written consent of Xxxxx or Parent,
Frontier shall not make any payment with respect to, or settle or offer to
settle, any such demands. At the Effective Time, each Frontier Certificate,
other than Frontier Certificates representing Frontier Dissenting Shares and the
shares to be canceled pursuant to Section 2.1(a), shall thereafter represent
only the right to receive the Frontier Merger Consideration and the right to
receive any distributions or dividends pursuant to Section 2.8.
SECTION 2.2 EFFECT ON CAPITAL STOCK OF XXXXX AND MERGER SUB TWO. At the
Effective Time, by virtue of the Xxxxx Merger and without any action on the part
of Xxxxx, Parent, Merger Sub Two or any holder of any shares of Xxxxx Common
Stock:
(a) All shares of Xxxxx Common Stock that are held by Xxxxx as treasury
stock or that are owned by Parent, Frontier, Xxxxx, Merger Sub One, Merger Sub
Two, any direct or indirect wholly owned Xxxxx Subsidiary, any direct or
indirect wholly owned Frontier Subsidiary or any direct or indirect wholly owned
Parent Subsidiary immediately prior to the Effective Time shall cease to be
outstanding and shall be canceled and retired and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(b) Except as provided in Section 2.2(a) and Section 2.10 and except
for Xxxxx Dissenting Shares (as defined in Section 2.2(c)), each outstanding
share of Xxxxx Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive the following:
(i) one fully paid and nonassessable share of Parent Common
Stock (the "Stock Consideration");
(ii) an amount of cash (the "Cash Consideration") equal to the
quotient of (A) $172,500,000 divided by (B) the Total Xxxxx Common
Stock Number (as hereinafter defined) determined immediately prior to
the Effective Time and certified in the Total Xxxxx Common Stock Number
Certificate delivered pursuant to Section 5.18 and Section 6.3(c)
hereof; and
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(iii) one contingent value right (a "CVR"), which shall
represent the right to receive an amount of cash equal to the quotient
of (A) the sum of (v) the aggregate amount of all compensation,
payments, penalties, interest and other damages recovered by the Xxxxx
Subsidiaries and their affiliates in the lawsuit filed by the Xxxxx
Subsidiaries against the United States in the United States Court of
Federal Claims relating to jet fuel sales by the Xxxxx Subsidiaries to
the Defense Fuel Supply Center, the claims filed against the Department
of Defense under the Contract Disputes Act and any similar future
lawsuits, claims or appeals brought by Parent or any Xxxxx Subsidiary
related to the sale of jet fuel by Xxxxx or any Xxxxx Subsidiary to the
United States prior to the date hereof (collectively and as such
pending lawsuit and claims are more particularly described in Schedule
2.2(b) to the Xxxxx Disclosure Letter, the "Jet Fuel Claims"), whether
such compensation, penalties, interest or other damages are recovered
at trial, upon appeal or in settlement (the "Recovery"), minus (w) two
times the direct costs and expenses ("Claim Expenses") incurred by
Parent, the Xxxxx Subsidiaries and their affiliates in prosecuting the
Jet Fuel Claims from and after the date hereof, including the
compensation of the Representatives (as defined in Section 5.19), minus
(x) any income tax including any state and local franchise tax imposed
on net income ("Income Tax") liability to Parent and its affiliates
(based on an assumed highest statutory rate of federal, state and local
income and franchise tax applicable to corporations in each year in
which a payment of any portion of the Recovery is made (the "Assumed
Tax Rate"), net of any federal income tax benefit of such state and
local income and franchise taxes calculated at such Assumed Tax Rate)
of the Recovery, plus (y) any Income Tax benefit to Parent and its
affiliates (based on the Assumed Tax Rate during the year of payment)
of the incurrence of Claim Expenses and payments made to holders of the
CVRs minus (z) an amount equal to 10% of the remainder of (v) minus
(w), divided by (B) the total number of CVRs (which number shall equal
the sum of the total number of CVRs issued under this Section
2.2(b)(iii) and Section 2.5(f)).
(c) The consideration provided for in Section 2.2(b), together with the
consideration provided for in Section 2.10, is referred to herein as the "Xxxxx
Merger Consideration." "Xxxxx Dissenting Shares" are shares of Xxxxx Common
Stock outstanding immediately prior to the Effective Time and held by a holder
who neither shall have voted in favor of the Xxxxx Merger nor shall have
consented thereto in writing and who shall have demanded appraisal for such
shares in accordance with the DGCL. Xxxxx Dissenting Shares shall not be
converted into a right to receive the Xxxxx Merger Consideration, unless such
holder fails to perfect, withdraws or otherwise loses its right to appraisal.
If, after the Effective Time, such holder fails to perfect, withdraws or loses
its right to appraisal, such shares shall be treated as if they had been
converted at the Effective Time into the right to receive the Xxxxx Merger
Consideration. Xxxxx shall give Frontier and Parent prompt notice of any demands
received by Xxxxx for appraisal of shares of Xxxxx Common Stock. Except as
required by applicable law or with the prior written consent of Frontier or
Parent, Xxxxx shall not make any payment with respect to, or settle or offer to
settle, any such demands. At the Effective Time, each certificate (a "Xxxxx
Certificate") formerly representing any shares of Xxxxx Common Stock, other than
Xxxxx Certificates representing Xxxxx Dissenting Shares and the shares to be
canceled pursuant to Section 2.2(a), shall thereafter represent only the right
to receive the Xxxxx Merger Consideration and the right to receive any
distribution or dividends pursuant to Section 2.8.
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(d) All of such shares of Parent Common Stock issued pursuant to this
Section 2.2 shall be duly authorized and validly issued and free of preemptive
rights, with no personal liability attaching to the ownership thereof. All
shares of Xxxxx Common Stock shall cease to be outstanding and shall be canceled
and retired and shall cease to exist, and each holder of a Xxxxx Certificate
that immediately prior to the Effective Time represented any shares of Xxxxx
Common Stock shall thereafter cease to have any rights with respect to such
shares of Xxxxx Common Stock, except as provided in Section 2.9 the right to
receive the Xxxxx Merger Consideration to be issued in consideration therefor,
including any cash in lieu of fractional shares of applicable Parent Common
Stock with respect thereto to be issued in consideration therefor, and any
dividends or other distributions to which holders of Xxxxx Common Stock become
entitled, all in accordance with this Article 2 (and subject, in the case of
Xxxxx Dissenting Shares, to Section 2.2(c)) upon the surrender of such Xxxxx
Certificate.
(e) If, between the date of this Agreement and the Effective Time,
there is declared or effected a reorganization, reclassification,
recapitalization, stock split, split-up, stock dividend or stock distribution
(including any dividend or distribution of securities convertible into Xxxxx
Common Stock or Frontier Common Stock), combination or exchange of shares with
respect to, or rights issued in respect of, Xxxxx Common Stock or Frontier
Common Stock, the Xxxxx Merger Consideration and/or Frontier Merger
Consideration, as appropriate, shall be adjusted accordingly to provide to the
holders of Xxxxx Common Stock and Frontier Common Stock the same economic effect
as contemplated by this Agreement prior to such event.
(f) Each share of Merger Sub Two Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of Xxxxx Surviving Corporation.
SECTION 2.3 EFFECT ON PARENT COMMON STOCK. At the Effective Time, each
share of the capital stock of Parent issued and outstanding immediately prior to
the Effective Time shall remain outstanding. Immediately following the Effective
Time, shares of the capital stock of Parent owned by Frontier Surviving
Corporation or Xxxxx Surviving Corporation shall be canceled by Parent without
payment therefor.
SECTION 2.4 SURRENDER OF XXXXX SHARES.
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company to act as agent for the holders of shares of Xxxxx Common Stock in
connection with the Xxxxx Merger (the "Exchange Agent") to receive the Xxxxx
Merger Consideration to which holders of such shares shall become entitled
pursuant to Section 2.2. Promptly after the Effective Time, but in no event
later than three business days following the Closing Date, Parent will deposit
with the Exchange Agent certificates representing Parent Common Stock and cash
sufficient to make all payments pursuant to Section 2.2 and Section 2.10 and,
when and as needed, Frontier or Parent will deposit with the Exchange Agent cash
sufficient to make all payments pursuant to Section 2.8 (such funds, the
"Exchange Fund").
(b) Promptly after the Effective Time, but in no event later than three
business days following the Closing Date, Parent shall cause to be mailed to
each record holder, at the Effective Time, of an outstanding Xxxxx Certificate,
a form of letter of transmittal (which shall
7
specify that delivery shall be effected, and risk of loss and title to the Xxxxx
Certificates shall pass, only upon proper delivery of the Xxxxx Certificate to
the Exchange Agent) and instructions for use in effecting the surrender of the
Xxxxx Certificate for payment of the Xxxxx Merger Consideration therefor. Within
three business days after surrender to the Exchange Agent of a Xxxxx
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
Xxxxx Certificate shall be entitled to receive in exchange therefor the Xxxxx
Merger Consideration for each share formerly represented by such Xxxxx
Certificate and such Xxxxx Certificate shall then be canceled. Notwithstanding
the foregoing, Xxxxx Certificates surrendered for exchange by any Xxxxx Rule 145
Affiliate (as determined pursuant to Section 5.10) shall not be exchanged until
Parent has received a written agreement from such Person as provided in Section
5.10. No interest shall be paid or accrued for the benefit of holders of Xxxxx
Certificates on the Xxxxx Merger Consideration payable upon the surrender of
Xxxxx Certificates (including, without limitation, any cash payable pursuant to
Section 2.8 or Section 2.10). If payment of the Xxxxx Merger Consideration is to
be made to a person other than the person in whose name the surrendered Xxxxx
Certificate is registered, it shall be a condition of payment that the Xxxxx
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the person requesting such payment shall have
paid any transfer and other taxes required by reason of the payment of the Xxxxx
Merger Consideration to a person other than the registered holder of the Xxxxx
Certificate surrendered or shall have established to the satisfaction of Xxxxx
Surviving Corporation that such tax either has been paid or is not applicable.
SECTION 2.5 XXXXX STOCK OPTIONS AND OTHER STOCK-BASED AWARDS.
(a) As used in this Agreement, a "Stock Plan" shall be any plan or
agreement pursuant to which an option ("Stock Option") has been or may be
granted to any employee, director, independent contractor or former employee,
director or independent contractor to acquire shares of Xxxxx Common Stock,
Frontier Common Stock, or Parent Common Stock, as the case may be. "Stock Plan"
shall also include any plan or agreement pursuant to which any stock
appreciation rights, phantom stock, restricted stock, restricted stock units,
deferred stock units, dividend equivalents or other equity-based compensation
("Stock-Based Awards") has been or may be granted to any employee, director,
independent contractor or former employee, director or independent contractor.
As used in this Section 2.5, "Option Exchange Ratio" shall mean the quotient of
(i) the sum of the Average Price plus the Cash Consideration divided by (ii) the
Average Price. The "Average Price" shall mean the average of the volume weighted
sales prices per share of the Frontier Common Stock on the New York Stock
Exchange, Inc. (the "NYSE"), as reported by Bloomberg Financial Markets (or, if
not reported thereby, by any other authoritative source as Frontier and Xxxxx
shall agree in writing) for the five consecutive full trading days in which such
shares are traded on the NYSE ending on the third full trading day prior to, but
not including, the day on which the Effective Time occurs. The Average Price
shall be calculated to the nearest one-hundredth of one cent, and the Option
Exchange Ratio shall be calculated to the nearest ten-thousandth.
(b) Each option to purchase shares of Xxxxx Common Stock (a "Xxxxx
Stock Option") granted under the Xxxxx Stock Plans, whether vested or unvested,
that is outstanding immediately
8
prior to the Effective Time shall cease to represent a right to acquire shares
of Xxxxx Common Stock and shall be converted, at the Effective Time, into an
option to purchase shares of Parent Common Stock (a "Parent Stock Option"), on
the same terms and conditions as were applicable under such Xxxxx Stock Option
(but taking into account any changes thereto, including the acceleration
thereof, provided for in the Xxxxx Stock Plans, in any award agreement or in
such Xxxxx Stock Option by reason of this Agreement or the transactions
contemplated hereby). The number of shares of Parent Common Stock which shall be
subject to each such Parent Stock Option shall be the number of shares of Xxxxx
Common Stock subject to each such Xxxxx Stock Option multiplied by the Option
Exchange Ratio, rounded, if necessary, to the nearest whole share of Parent
Common Stock, and such Parent Stock Option shall have an exercise price per
share of Parent Common Stock (rounded to the nearest one hundredth of a cent)
equal to the exercise price per share of Xxxxx Common Stock for such Xxxxx Stock
Option divided by the Option Exchange Ratio; provided, however, that, in the
case of any Xxxxx Stock Option to which Section 421 of the Code as of the
Effective Time (after taking into account the effect of any accelerated vesting
thereof) applies by reason of its qualification under Section 422 of the Code,
the exercise price, the number of shares of Parent Common Stock subject to such
option and the terms and conditions of exercise of such option shall be
determined in a manner consistent with the requirements of Section 424(a) of the
Code. For purposes of this Section 2.5(b) and Section 2.5(c), the number of
shares and the exercise price per share under each Xxxxx Stock Option or Xxxxx
Stock-Based Award shall be adjusted appropriately upon the occurrence of any of
the events contemplated in Section 2.2(e) hereof to provide the holders of Xxxxx
Stock Options and Xxxxx Stock-Based Awards the same economic effect as
contemplated by this Agreement prior to the occurrence of such event.
(c) At the Effective Time, each right of any kind, contingent or
accrued, to receive shares of Xxxxx Common Stock or benefits measured by the
value of a number of shares of Xxxxx Common Stock, and each award of any kind
consisting of shares of Xxxxx Common Stock, granted under the Xxxxx Stock Plans,
other than Xxxxx Stock Options (each, a "Xxxxx Stock-Based Award"), whether
vested or unvested, which is outstanding immediately prior to the Effective Time
shall cease to represent a right or award with respect to shares of Xxxxx Common
Stock and shall be canceled in consideration for a cash payment (i) computed
according to the relevant terms of each Xxxxx Stock-Based Award or (ii) if
consented to by the holder of the Xxxxx Stock-Based Award, at a per-share price
equal to the average of the volume weighted sales prices per share of the Xxxxx
Common Stock on the American Stock Exchange, Inc. ("AMEX"), as reported by
Bloomberg Financial Markets (or, if not reported thereby, by any other
authoritative source as Frontier and Xxxxx shall agree in writing) for the five
consecutive full trading days in which such shares are traded on AMEX ending on
the third full trading day prior to, but not including, the day on which the
Effective Time occurs. This price shall be calculated to the nearest
one-hundredth of one cent.
(d) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Xxxxx Stock Options appropriate notices setting forth
such holders' rights pursuant to the respective Xxxxx Stock Plans and agreements
evidencing the grants of such Xxxxx Stock Options, and stating that such Xxxxx
Stock Options and agreements have been assumed by Parent and shall continue in
effect on the same terms and conditions (subject to the adjustments required by
this Section 2.5 after giving effect to the Mergers and the terms of the Xxxxx
Stock Plans) pursuant to the Parent Stock Plan.
9
(e) Prior to the Effective Time, Xxxxx shall take all necessary action
for the adjustment of Xxxxx Stock Options and the cancellation and cash out of
Xxxxx Stock-Based Awards under this Section 2.5 and for the adoption by Parent
of a Stock Plan.
(f) Each holder of a Xxxxx Stock Option that is outstanding immediately
prior to the Effective Time (whether vested or unvested) and converted into a
Parent Stock Option pursuant to Section 2.5(b) shall, upon exercise of such
Parent Stock Option, receive one CVR for each share of Xxxxx Common Stock into
which such Xxxxx Stock Option was exercisable immediately prior to the Effective
Time. No CVRs shall be issued to any such holder of a Parent Stock Option who
does not exercise such Parent Stock Option prior to the first payment date of
any payment to the holders of CVRs.
SECTION 2.6 FRONTIER STOCK OPTIONS.
(a) Each option to purchase shares of Frontier Common Stock (a
"Frontier Stock Option") granted under the Frontier Stock Plans, whether vested
or unvested, that is outstanding immediately prior to the Effective Time shall
cease to represent a right to acquire shares of Frontier Common Stock and shall
be converted, at the Effective Time, into a Parent Stock Option, on the same
terms and conditions as were applicable under such Frontier Stock Option (but
taking into account any changes thereto, including the acceleration thereof,
provided for in the Frontier Stock Plans in any award agreement or in such
Frontier Stock Option by reason of this Agreement or the transactions
contemplated hereby). The number of shares of Parent Common Stock subject to
each such Parent Stock Option shall be equal to the number of shares of Frontier
Common Stock subject to each such Frontier Stock Option and such Parent Stock
Option shall have an exercise price per share equal to the per share exercise
price specified in such Frontier Stock Option. For purposes of this Section
2.6(a), the number of shares and the exercise price per share under each
Frontier Stock Option shall be adjusted appropriately upon the occurrence of any
of the events contemplated in Section 2.2(e) hereof to provide the holders of
Frontier Stock Options the same economic effect as contemplated by this
Agreement prior to the occurrence of such event.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Frontier Stock Options appropriate notices setting
forth such holders' rights pursuant to the respective Frontier Stock Plans and
agreements evidencing the grants of such Frontier Stock Options and stating that
such Frontier Stock Options and agreements have been assumed by Parent and shall
continue in effect on the same terms and conditions (subject to the adjustments
required by this Section 2.6 after giving effect to the Mergers and the terms of
the Frontier Stock Plans) pursuant to the Parent Stock Plan.
(c) Prior to the Effective Time, Frontier shall take all necessary
action for the adjustment of Frontier Stock Options under this Section 2.6 and
for the adoption by Parent of the Parent Stock Plan.
SECTION 2.7 EXCHANGE PROCEDURES.
(a) Promptly after the Effective Time but in no event later than three
business days following the Closing Date, Parent shall cause the Exchange Agent
to mail to each holder of a
10
Xxxxx Certificate in accordance with Section 2.4(b) hereof. Any uncertificated
shares of Xxxxx Common Stock in book-entry form, other than Xxxxx Dissenting
Shares, shall be deemed surrendered to the Exchange Agent at the Effective Time,
and each holder thereof shall be entitled to receive (A) certificates
representing shares of Parent Common Stock representing, in the aggregate, the
whole number of shares of Parent Common Stock that such holder has the right to
receive pursuant to Section 2.2 (after taking into account all shares of Xxxxx
Common Stock then held by such holder) and (B) a check in the amount equal to
the cash that such holder has the right to receive pursuant to the provisions of
this Article 2, including cash in lieu of any fractional shares of Parent Common
Stock that such holder is entitled to receive pursuant to Section 2.10 and
dividends or other distributions that such holder is entitled to receive
pursuant to Section 2.8. The Xxxxx Certificate so surrendered shall forthwith be
canceled. Until such time as a certificate representing Parent Common Stock is
issued to or at the direction of the holder of a surrendered Xxxxx Certificate,
such Parent Common Stock shall be deemed not outstanding and shall not be
entitled to vote on any matter. In the event of a transfer of ownership of Xxxxx
Common Stock that occurred prior to the Effective Time, but is not registered in
the transfer records of Xxxxx, one or more shares of Parent Common Stock
evidencing, in the aggregate, the proper number of shares of Parent Common
Stock, a check in the proper amount of cash that such holder has the right to
receive pursuant to the provisions of this Article 2, including cash in lieu of
any fractional shares of Parent Common Stock pursuant to Section 2.10 and any
dividends or other distributions to which such holder is entitled pursuant to
Section 2.8, may be issued with respect to such Xxxxx Common Stock to such a
transferee if the Xxxxx Certificate is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid. If any
certificate for shares of Parent Common Stock is to be issued in a name other
than that in which the Xxxxx Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the Person requesting
such exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for shares of Parent Common Stock in a name other than
that of the registered holder of the Xxxxx Certificate surrendered, or shall
establish to the reasonable satisfaction of Parent or the Exchange Agent that
such tax has been paid or is not applicable.
(b) Each Frontier Certificate (and each uncertificated share of
Frontier Common Stock in book-entry form, if any, prior to the Effective Time)
shall be deemed to represent an equivalent number of shares of Parent Common
Stock without any action on the part of the holder thereof; provided, however,
that if an exchange of Frontier Certificates for new certificates is required by
law or applicable rule or regulation, or is requested by any holder thereof, the
parties will cause Parent to arrange for such exchange on a
one-share-for-one-share basis.
SECTION 2.8 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED XXXXX SHARES. No
dividends or other distributions with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Xxxxx Certificate with respect
to the shares of Parent Common Stock that such holder would be entitled to
receive upon surrender of such Xxxxx Certificate, and no cash payment in lieu of
fractional shares of Parent Common Stock shall be paid to any such holder
pursuant to Section 2.10 until such holder shall surrender such Xxxxx
Certificate in accordance with Section 2.10. Subject to the effect of applicable
law, following surrender of any such Xxxxx Certificate, there shall be paid to
the record holder thereof without
11
interest, (a) promptly after the time of such surrender, the amount of any cash
payable in lieu of fractional shares of Parent Common Stock to which such holder
is entitled pursuant to Section 2.10 and the amount of any dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Parent Common Stock and (b) at the appropriate
payment date, the amount of any dividends or other distributions with a record
date after the Effective Time and a payment date subsequent to such surrender
payable with respect to such shares of Parent Common Stock.
SECTION 2.9 NO FURTHER OWNERSHIP RIGHTS IN XXXXX COMMON STOCK OR
FRONTIER COMMON STOCK. All shares of Parent Common Stock issued and cash paid
upon conversion of shares of Xxxxx Common Stock or Frontier Common Stock in
accordance with the terms of this Article 2 (including any cash paid pursuant to
Section 2.2, Section 2.8 or Section 2.10) shall be deemed to have been issued or
paid in full satisfaction of all rights pertaining to the shares of Xxxxx Common
Stock or Frontier Common Stock.
SECTION 2.10 NO FRACTIONAL SHARES OF PARENT COMMON STOCK. No
certificates or scrip or shares of Parent Common Stock representing fractional
shares of Parent Common Stock or book-entry credit of the same shall be issued
upon the surrender for exchange of Xxxxx Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to have any rights of a
stockholder of Parent or a holder of shares of Parent Common Stock. For purposes
of this Section 2.10, all fractional shares to which a single record holder
would be entitled shall be aggregated and calculations shall be rounded to three
decimal places. Notwithstanding any other provision of this Agreement, each
holder of Xxxxx Certificates who would otherwise have been entitled to receive a
fraction of a share of Parent Common Stock (determined after taking into account
all Xxxxx Certificates delivered by such holder) shall receive, in lieu thereof,
cash (without interest) in an amount equal to the product of (a) such fractional
part of a share of Parent Common Stock multiplied by (b) the closing price for a
share of Parent Common Stock as reported on the NYSE on the first trading day
following the date on which the Effective Time occurs. As soon as practicable
after the determination of the amount of cash to be paid to such former holders
of Xxxxx Common Stock in lieu of any fractional interests, the Exchange Agent
shall notify Parent, and Parent shall ensure that there is deposited with the
Exchange Agent and shall cause the Exchange Agent to make available in
accordance with this Agreement such amounts to such former holders of Xxxxx
Common Stock.
SECTION 2.11 TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund that remains undistributed to the holders of Xxxxx Certificates six months
after the Effective Time shall, at Parent's request, be delivered to Parent or
otherwise on the instruction of Parent, and any holders of Xxxxx Certificates
who have not theretofore complied with this Article 2 shall after such delivery
look only to Parent for the Xxxxx Merger Consideration with respect to the
shares of Xxxxx Common Stock formerly represented thereby to which such holders
are entitled pursuant to Section 2.2 and Section 2.4, any cash in lieu of
fractional shares of Parent Common Stock to which such holders are entitled
pursuant to Section 2.10 and any dividends or distributions with respect to
shares of Parent Common Stock to which such holders are entitled pursuant to
Section 2.8. Any such portion of the Exchange Fund remaining unclaimed by
holders of shares of Xxxxx Common Stock immediately prior to such time as such
amounts would otherwise escheat to or become property of any governmental entity
12
shall, to the extent permitted by law, become the property of Parent free and
clear of any claims or interest of any Person previously entitled thereto.
SECTION 2.12 NO LIABILITY. None of Frontier, Parent, Merger Sub One,
Merger Sub Two, Xxxxx or the Exchange Agent shall be liable to any Person in
respect of any Xxxxx Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
SECTION 2.13 INVESTMENT OF THE EXCHANGE FUND. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Parent, on a daily
basis, provided that no such investment or loss thereon shall affect the amounts
payable or the timing of the amounts payable to Xxxxx stockholders pursuant to
Section 2.2 and the other provisions of this Article 2. Any interest and other
income resulting from such investments shall promptly be paid to Parent. The
Exchange Fund shall be invested by the Exchange Agent as directed by Parent,
provided that such investments shall be in obligations of or guaranteed by the
United States of America, in commercial paper obligations rated A-1 or P-1 or
better by Xxxxx'x Investors Services, Inc. or Standard & Poor's Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker's acceptances of commercial banks with capital exceeding $500 million.
SECTION 2.14 LOST CERTIFICATES. If any Xxxxx Certificate or Frontier
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Xxxxx Certificate or Frontier
Certificate to be lost, stolen or destroyed and, if required by Parent, the
posting by such Person of a bond in such reasonable amount as Parent may direct
as indemnity against any claim that may be made against it with respect to such
Xxxxx Certificate or Frontier Certificate, the Exchange Agent will deliver in
exchange for such lost, stolen or destroyed Xxxxx Certificate or Frontier
Certificate, the Xxxxx Merger Consideration or Frontier Merger Consideration, as
applicable, with respect to the shares of Xxxxx Common Stock or Frontier Common
Stock formerly represented thereby, any cash in lieu of fractional shares of
Parent Common Stock, and unpaid dividends and distributions on shares of Parent
Common Stock deliverable in respect thereof, pursuant to this Agreement.
SECTION 2.15 WITHHOLDING RIGHTS. Parent shall be entitled to deduct and
withhold, or cause to be deducted or withheld, from the consideration otherwise
payable pursuant to this Agreement such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld or paid over to or deposited with the relevant governmental entity by
Parent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction
and withholding was made by Parent.
SECTION 2.16 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of Parent, Frontier Surviving Corporation or Xxxxx
Surviving Corporation, as applicable, shall be authorized to execute and
deliver, in the name and on behalf of Frontier Surviving Corporation, Merger Sub
One or Frontier, or Xxxxx Surviving Corporation, Merger Sub Two or Xxxxx, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of Frontier Surviving Corporation, Merger Sub One or Frontier, or
Xxxxx
13
Surviving Corporation, Merger Sub Two or Xxxxx, any other actions and things
necessary to vest, perfect or confirm of record or otherwise in Parent, Frontier
Surviving Corporation or Xxxxx Surviving Corporation any and all right, title
and interest in, to and under any of the rights, properties or assets acquired
or to be acquired by Parent, Frontier Surviving Corporation or Xxxxx Surviving
Corporation, as applicable, as a result of, or in connection with, the Mergers.
SECTION 2.17 STOCK TRANSFER BOOKS. The stock transfer books of Frontier
and Xxxxx shall be closed immediately upon the Effective Time, and there shall
be no further registration of transfers of shares of Xxxxx Common Stock or
Frontier Common Stock thereafter on the records of Xxxxx or Frontier. At or
after the Effective Time, any Xxxxx Certificates or Frontier Certificates
presented to the Exchange Agent, Parent, Frontier Surviving Corporation or Xxxxx
Surviving Corporation for any reason shall be converted into the right to
receive the Xxxxx Merger Consideration or Frontier Merger Consideration, as
applicable, with respect to the shares of Xxxxx Common Stock or Frontier Common
Stock formerly represented thereby (including any cash in lieu of fractional
shares of Parent Common Stock to which the holders thereof are entitled pursuant
to Section 2.10 and any dividends or other distributions to which the holders
thereof are entitled pursuant to Section 2.8). From and after the Effective
Time, the holders of Xxxxx Certificates or Frontier Certificates evidencing
ownership of shares outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares except as otherwise
provided for herein or by applicable law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXX
Except as set forth in the disclosure letter delivered to Frontier
concurrently with the execution hereof (the "Xxxxx Disclosure Letter") in
accordance with Section 8.16 or as disclosed with reasonable specificity in the
Xxxxx Reports (as defined in Section 3.7), Xxxxx represents and warrants to
Frontier that:
SECTION 3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Xxxxx is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of
Delaware. Xxxxx is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
in which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary, except
where the failure to be so qualified would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect (as defined in Section 8.9). Xxxxx
has all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now conducted. The copies of Holly's
certificate of incorporation and bylaws previously made available to Frontier
are true and correct and contain all amendments as of the date hereof.
SECTION 3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Xxxxx has
the requisite corporate power and authority to execute and deliver this
Agreement and all other agreements and documents contemplated hereby to which it
is a party. The consummation by Xxxxx of the transactions contemplated hereby
has been duly authorized by all requisite corporate action, other than, with
respect to the Xxxxx Merger, the approval and adoption of this Agreement by
Holly's stockholders. This Agreement constitutes
14
the valid and legally binding obligation of Xxxxx, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
SECTION 3.3 CAPITALIZATION. The authorized capital stock of Xxxxx
consists of 20,000,000 shares of Xxxxx Common Stock, and 1,000,000 shares of
preferred stock, par value of $1.00 per share (the "Xxxxx Preferred Stock"). As
of March 28, 2003, there were (a) 15,492,428 shares of Xxxxx Common Stock issued
and outstanding, (b) no shares of Xxxxx Preferred Stock issued and outstanding,
(c) 1,388,800 shares of Xxxxx Common Stock issuable pursuant to options granted
under the stock option plans of Xxxxx described in the Xxxxx Disclosure Letter
(the "Xxxxx Stock Plans"), of which the weighted average exercise price was
approximately $10.20 per share and (d) no restricted shares of Xxxxx Common
Stock issued under the Xxxxx Stock Plans. All issued and outstanding shares of
Xxxxx Common Stock (i) are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights, (ii) were not issued in violation
of the terms of any agreement or other understanding binding upon Xxxxx and
(iii) were issued in compliance with all applicable charter documents of Xxxxx
and all applicable federal and state securities laws, rules and regulations.
Except (i) as set forth in this Section 3.3, (ii) for any shares of Xxxxx Common
Stock issued pursuant to the exercise of the options or other awards referred to
in subsection (c) above, and (iii) for shares of Xxxxx Common Stock issuable
pursuant to the exercise of such options, there are no outstanding shares of
capital stock and there are no options, warrants, calls, subscriptions,
stockholder rights plans or similar instruments, convertible securities, or
other rights, agreements or commitments which obligate Xxxxx or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
voting securities of Xxxxx or any of its Subsidiaries. Xxxxx has no outstanding
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the stockholders of Xxxxx on any matter.
SECTION 3.4 SUBSIDIARIES. Each of Holly's Subsidiaries is a
corporation, limited liability company or partnership duly organized, validly
existing and in good standing (where applicable) under the laws of its
jurisdiction of incorporation or organization, has the corporate, limited
liability company or partnership power and authority to own, operate and lease
its properties and to carry on its business as it is now being conducted, and is
duly qualified to do business and is in good standing (where applicable) in each
jurisdiction in which the ownership, operation or lease of its property or the
conduct of its business requires such qualification, except for jurisdictions in
which such failure to be so qualified or to be in good standing would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect. All of the
outstanding shares of capital stock of, or other ownership interests in, each of
Holly's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by Xxxxx free and clear of
all Liens. Schedule 3.4 of the Xxxxx Disclosure Letter sets forth for each
Subsidiary of Xxxxx, its name and jurisdiction of incorporation or organization.
SECTION 3.5 NO VIOLATION. Neither Xxxxx nor any of its Subsidiaries is,
or has received notice that it would be with the passage of time, in violation
of any term, condition or provision of (a) its charter documents or bylaws, (b)
any loan or credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license or other instrument or (c) any order of any court,
governmental authority or arbitration board or tribunal, or any law, ordinance,
governmental rule or regulation to which Xxxxx or any of its Subsidiaries or any
of their
15
respective properties or assets is subject, or is delinquent with respect to any
report required to be filed with any governmental entity, except, in the case of
matters described in clause (b) or (c), as would not have, individually or in
the aggregate, a Xxxxx Material Adverse Effect. Except as would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect, (i) Xxxxx and
its Subsidiaries hold all permits, licenses, variances, exemptions, orders,
franchises and approvals of all governmental authorities necessary for the
lawful conduct of their respective businesses (the "Xxxxx Permits") and (ii)
Xxxxx and its Subsidiaries are in compliance with the terms of the Xxxxx
Permits. No investigation by any governmental authority with respect to Xxxxx or
any of its Subsidiaries is pending or, to the knowledge of Xxxxx, threatened,
other than those that would not have, individually or in the aggregate, a Xxxxx
Material Adverse Effect.
SECTION 3.6 NO CONFLICT.
(a) Neither the execution and delivery by Xxxxx of this Agreement nor
the consummation by Xxxxx of the transactions contemplated hereby in accordance
with the terms hereof will: (i) conflict with or result in a breach of any
provisions of the charter documents or bylaws of Xxxxx; (ii) violate, or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or give rise to a right of purchase under, or
accelerate the performance required by, or result in the creation of any Lien
upon, any of the properties of Xxxxx or its Subsidiaries under, or result in
being declared void, voidable, or without further binding effect, or otherwise
result in a detriment to Xxxxx or any of its Subsidiaries under any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture, deed of
trust, Xxxxx Permit, lease, contract, agreement, joint venture or other
instrument or obligation to which Xxxxx or any of its Subsidiaries is a party,
or by which Xxxxx or any of its Subsidiaries or any of their properties is bound
or affected; or (iii) contravene or conflict with or constitute a violation of
any provision of any law, rule, regulation, judgment, order or decree binding
upon or applicable to Xxxxx or any of its Subsidiaries, except, in the case of
matters described in clause (ii) or (iii), as would not have or reasonably be
expected to have, individually or in the aggregate, a Xxxxx Material Adverse
Effect.
(b) Neither the execution and delivery by Xxxxx of this Agreement nor
the consummation by Xxxxx of the transactions contemplated hereby in accordance
with the terms hereof will require any consent, approval or authorization of, or
filing or registration with, any governmental or regulatory authority, other
than (i) the filings provided for in Article 1, (ii) filings required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act of 1933, as amended (the "Securities Act"), and applicable state
securities and "Blue Sky" laws, (iii) filings required by the Federal Energy
Regulatory Commission and any state energy regulatory commissions with respect
to interstate and intrastate petroleum pipelines, and (iv) filings required by
the Federal Communications Commission with respect to microwave transmitter
licenses ((i), (ii), (iii) and (iv) collectively, the "Regulatory Filings"),
except for any consent, approval or authorization the failure of which to obtain
and for any filing or registration the failure of which to make would not have
or reasonably be expected to have, individually or in the aggregate, a Xxxxx
Material Adverse Effect.
16
(c) Other than as contemplated by Section 3.6(b), no consents,
assignments, waivers, authorizations or other certificates are necessary in
connection with the transactions contemplated hereby to provide for the
continuation in full force and effect of all of the Xxxxx Material Contracts (as
hereinafter defined) or for Xxxxx to consummate the transactions contemplated
hereby, except where the failure to receive such consents or other certificates
would not have or reasonably be expected to have, individually or in the
aggregate, a Xxxxx Material Adverse Effect.
(d) Other than as contemplated by Section 5.13(d), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) result in or constitute the
satisfaction of a condition to (whether or not there be any additional condition
to) any payment from Xxxxx or its Subsidiaries (including severance,
unemployment compensation, parachute payment, bonus or otherwise) becoming due
to any director, employee or independent contractor of Xxxxx or any of its
Subsidiaries under any Xxxxx Plan (as defined in Section 3.11) or otherwise;
(ii) increase any benefits otherwise payable under any Xxxxx Plan or otherwise;
or (iii) result in the acceleration of the time of payment or vesting of any
such benefits.
SECTION 3.7 SEC DOCUMENTS. Xxxxx has made available to Frontier each
registration statement, report, proxy statement or information statement (other
than preliminary materials) filed by Xxxxx with the Securities and Exchange
Commission ("SEC") since July 31, 2000, each in the form (including exhibits and
any amendments thereto) filed with the SEC prior to the date hereof
(collectively, the "Xxxxx Reports"), and Xxxxx has filed all forms, reports and
documents required to be filed by it with the SEC pursuant to relevant
securities statutes, regulations, policies and rules since such time. As of
their respective dates, the Xxxxx Reports (i) were prepared in accordance with
the applicable requirements of the Securities Act, the Exchange Act, and the
rules and regulations thereunder and complied with the then applicable
accounting requirements and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading except for such statements, if any,
as have been modified or superseded by subsequent filings with the SEC prior to
the date hereof. Each of the consolidated balance sheets included in or
incorporated by reference into the Xxxxx Reports (including the related notes
and schedules) fairly presents in all material respects the consolidated
financial position of Xxxxx and its Subsidiaries as of its date and each of the
consolidated statements of operations, cash flows and stockholders' equity
included in or incorporated by reference into the Xxxxx Reports (including any
related notes and schedules) fairly presents in all material respects the
results of operations, cash flows or changes in stockholders' equity, as the
case may be, of Xxxxx and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to such exceptions as may be
permitted by Form 10-Q of the SEC), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein, and except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
SECTION 3.8 LITIGATION AND LIABILITIES. There are no actions, suits or
proceedings pending against Xxxxx or any of its Subsidiaries or, to Holly's
knowledge, threatened against Xxxxx or any of its Subsidiaries, at law or in
equity, or before or by any
17
federal, state or foreign commission, court, board, bureau, agency or
instrumentality, other than those that would not have or reasonably be expected
to have, individually or in the aggregate, a Xxxxx Material Adverse Effect.
There are no outstanding judgments, decrees, injunctions, awards or orders
against Xxxxx or any of its Subsidiaries, other than those that would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect. There are no
obligations or liabilities of any nature, whether accrued, absolute, contingent
or otherwise, of Xxxxx or any of its Subsidiaries, other than those liabilities
and obligations (a) that are disclosed in the Xxxxx Reports, (b) that have been
incurred in the ordinary course of business since January 31, 2003, (c) related
to expenses associated with the transactions contemplated by this Agreement or
(d) that would not have or reasonably be expected to have, individually or in
the aggregate, a Xxxxx Material Adverse Effect.
SECTION 3.9 ABSENCE OF CERTAIN CHANGES. Since July 31, 2002, Xxxxx has
conducted its business only in the ordinary and usual course of business, and
during such period there has not been (i) any event, condition, action or
occurrence that has had or would reasonably be expected to have, individually or
in the aggregate, a Xxxxx Material Adverse Effect; (ii) through the date hereof,
any material change by Xxxxx or any of its Subsidiaries (viewed on a
consolidated basis) in any of its accounting methods, principles or practices or
any of its tax methods, practices or elections, except for changes required by
generally accepted accounting principles; (iii) any material damage,
destruction, or loss to the business or properties of Xxxxx and its
Subsidiaries, taken as a whole, not covered by insurance; (iv) through the date
hereof, any declaration, setting aside or payment of any dividend (other than
ordinary quarterly dividends of $0.11 per share on Xxxxx Common Stock) or other
distribution in respect of the capital stock of Xxxxx, or any direct or indirect
redemption, purchase or any other acquisition by Xxxxx of any such stock; (v)
through the date hereof, any change in the capital stock or in the number of
shares or classes of Holly's authorized or outstanding capital stock (other than
as a result of issuances under Xxxxx Stock Plans or exercises of options to
purchase shares of Xxxxx Common Stock outstanding or issued as permitted
hereunder pursuant to Section 5.1(a)(vi)); (vi) through the date hereof, any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option, stock purchase
or other employee benefit plan, except in the ordinary course of business; or
(vii) through the date hereof, any event, condition, action or occurrence that
is prohibited on or after the date of this Agreement under Section 5.1(a)(viii),
(ix), (x), (xii), (xiii), (xv), (xvi), or (xx) of this Agreement.
SECTION 3.10 TAXES.
(a) Each of Xxxxx and its Subsidiaries and each affiliated,
consolidated, combined, unitary or similar group of which any such corporation
is or, since January 1, 1991, was a member has (i) duly filed (or there has been
filed on its behalf) on a timely basis (taking into account any extensions of
time to file before the date hereof) with appropriate governmental authorities
all Tax Returns (as defined below) required to be filed by or with respect to
it, except to the extent that any failure to file would not have, individually
or in the aggregate, a Xxxxx Material Adverse Effect, and (ii) duly paid or
deposited in full on a timely basis or made adequate provisions in accordance
with generally accepted accounting principles (or there has been paid or
deposited or adequate provision has been made on its behalf) for the payment of
all Taxes (as defined below) required to be paid by it other than those being
contested in good faith by Xxxxx or a Subsidiary of Xxxxx and adequately
provided for on the financial statements
18
contained in the Xxxxx Reports and except to the extent that any failure to pay
or deposit or make adequate provision for the payment of such Taxes would not
have, individually or in the aggregate, a Xxxxx Material Adverse Effect.
(b) Except for matters that would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect and for matters disclosed on Schedule
3.10(b) of the Xxxxx Disclosure Letter, (i) the federal income tax returns of
Xxxxx and each of its Subsidiaries have been examined by the Internal Revenue
Service (the "IRS") (or the applicable statutes of limitation for the assessment
of federal income taxes for such periods have expired) for all periods; (ii) all
deficiencies asserted as a result of any examinations of Xxxxx and its
Subsidiaries by any taxing authority have been paid fully, settled or adequately
provided for in the financial statements contained in the Xxxxx Reports; (iii)
as of the date hereof, neither Xxxxx nor any of its Subsidiaries has granted any
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the filing of any Tax Return or the assessment of any
Taxes of Xxxxx or any of its Subsidiaries that will be outstanding as of the
Effective Time; (iv) neither Xxxxx nor any of its Subsidiaries is a party to, is
bound by or has any obligation under any tax sharing, allocation or indemnity
agreement or any similar agreement or arrangement; (v) there are no Tax liens on
any assets of Xxxxx or its Subsidiaries except for (A) Taxes not yet currently
due and (B) matters being contested by Xxxxx or its Subsidiaries in good faith
for which adequate reserves are reflected in the financial statements contained
in the Xxxxx Reports; and (vi) neither Xxxxx nor any of its Subsidiaries is a
party to an agreement that provides for the payment of any amount that could
constitute a "parachute payment" within the meaning of section 280G of the Code.
(c) Except as disclosed on Schedule 3.10(c) of the Xxxxx Disclosure
Letter, neither Xxxxx nor any of its Subsidiaries has participated, directly or
indirectly, in any (i) reportable transaction within the meaning of Treas. Reg.
Section 1.6011-4T(b), or (ii) tax shelter required to be registered under
Section 6111 of the Code.
(d) For purposes of this Agreement, (i) "Tax" or "Taxes" means all
federal, state, county, local, foreign or other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, accumulated earnings, personal
holding, excess profits, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, disability,
capital stock, or windfall profits taxes, customs duties or other taxes, fees,
assessments or governmental charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign), and (ii) "Tax Return" means any
return, report, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
SECTION 3.11 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section 3.11, the term Subsidiaries as applied
to Xxxxx shall include any entity, whether or not incorporated, which, with
Xxxxx, forms or formed a controlled group of corporations, a group of trades or
business under common control or an affiliated service group, within the meaning
of section 414(b), (c) or (m) of the Code, within the six full calendar years
prior to the Closing Date.
19
(b) All employee benefit plans, programs, arrangements and agreements,
including but not limited to pension, retirement, disability, medical, dental or
other health insurance plans; life insurance or other death benefit plans;
profit sharing, deferred compensation, stock option, bonus or other incentive
plans; vacation benefit plans or policies; severance or redundancy plans;
individual employee agreements; and foreign plans not subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (whether or not
described in Section 3(3) of ERISA, whether or not funded, whether or not
written or oral and whether or not legally enforceable in whole or in part) (i)
to which Xxxxx or any Subsidiary is a party or by which it is bound, (ii) with
respect to which Xxxxx or any Subsidiary has made any payments or contributions,
or (iii) to which Xxxxx or any Subsidiary may otherwise have any liability, are
listed on Schedule 3.11(b) of the Xxxxx Disclosure Letter (the "Xxxxx Plans").
(c) Xxxxx has made available to Frontier a true, correct and complete
copy of each of the Xxxxx Plans, and all contracts relating thereto, or to the
funding thereof, including, without limitation, all trust agreements, insurance
contracts, administration contracts, investment management agreements,
subscription and participation agreements, and record-keeping agreements, each
as in effect on the date hereof. In the case of any Xxxxx Plan that is not in
written form, Frontier has been supplied with an accurate description of such
Xxxxx Plan as in effect on the date hereof. A true, correct and complete copy of
the most recent annual report, actuarial report, accountant's opinion of the
plan's financial statements, summary plan description and IRS determination
letter with respect to each Xxxxx Plan, to the extent applicable, and a current
schedule of assets (and the fair market value thereof assuming liquidation of
any asset which is not readily tradable) held with respect to any funded Xxxxx
Plan have been made available to Frontier. There have been no changes in the
financial condition of the respective plans from that stated in the annual
reports and actuarial reports supplied that would have, individually or in the
aggregate, a Xxxxx Material Adverse Effect.
(d) All Xxxxx Plans comply in form and have been administered in
operation in compliance in all material respects with all applicable
requirements of law, excluding any deficiencies that would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect, no event has
occurred which will or could cause any such Xxxxx Plan to fail to comply with
such requirements, excluding any deficiencies that would not have, individually
or in the aggregate, a Xxxxx Material Adverse Effect, and no notice has been
issued by any governmental authority questioning or challenging such compliance,
and no inquiry or audit has been initiated with respect thereto by any
governmental authority.
(e) All required employer contributions under any such plans have been
made and the applicable funds have been funded in accordance with the terms
thereof, excluding any deficiencies that would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect.
(f) To the extent applicable, the Xxxxx Plans comply, in all material
respects, with the requirements of ERISA, the Code and any other applicable tax
act and other laws, and any Xxxxx Plan intended to be qualified under section
401(a) of the Code has been determined by the IRS to be so qualified (or an
application for qualification is pending before the IRS) under the currently
applicable provisions of the Code, and nothing has occurred or is anticipated to
occur to cause the loss of such qualified status.
20
(g) Except as specifically set forth on Schedule 3.11(g) of the Xxxxx
Disclosure Letter, Xxxxx does not sponsor, maintain, participate in or
contribute to, and has not at any time sponsored, maintained, participated in or
contributed to (and never has been required to contribute to) any (i) employee
pension benefit plan (as such term is defined in Section 3(1) of ERISA ("Pension
Plan") that is or was subject to minimum funding standards of the Code or ERISA;
(ii) "multiemployer plan" as that term is defined in Section 414(f) of the Code
or Section 4001(a)(3) of ERISA; (iii) foreign benefit plans; or (iv) voluntary
employee benefit associations intended to be exempt from federal income tax
under Section 501(c)(9) of the Code.
(h) Except as specifically set forth on Schedule 3.11(h) of the Xxxxx
Disclosure Letter: (i) Xxxxx has paid all premiums (including any applicable
interest, charges and penalties for late payment) due the Pension Benefit
Guaranty Corporation (the "PBGC") with respect to each Pension Plan for which
premiums to the PBGC are required; (ii) no Pension Plan had, as of the most
recent actuarial report, an "unfunded benefit liability" (as such term is
defined in Section 4001(a)(18) of ERISA) or has an "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA or Section 412 of
the Code), whether or not waived; (iii) no Pension Plan has a "liquidity
shortfall" as defined in Section 412(m)(5) of the Code; (iv) no notice has been
required under Section 4011 of ERISA with respect to any Pension Plan; (v) no
event described in Section 401(a)(29) of the Code has occurred or can reasonably
be expected to occur with respect to any Pension Plan; (vi) no "reportable
event" (as that term is defined in Section 4043 of ERISA and for which the
30-day notice requirement has not been waived) has occurred with respect to any
Pension Plan; (vii) each Pension Plan uses a funding method permissible under
ERISA and the actuarial assumptions used in connection therewith are reasonable
individually and in the aggregate; and (viii) the fair market value of the
assets of each Pension Plan will exceed or equal the "projected benefit
obligation" (as defined in Statement of Financial Accounting Standard No. 87).
(i) Except as specifically set forth on Schedule 3.11(i) of the Xxxxx
Disclosure Letter, the execution of this Agreement or the consummation of the
Mergers will not give rise to or trigger any change of control, accelerated
vesting, severance or other similar provisions in any Xxxxx Plan.
(j) Excluding claims for benefits incurred in the ordinary course of
the Xxxxx Plan activities, there are no pending or anticipated claims against or
otherwise involving any of the Xxxxx Plans and no suit, action or other
litigation has been brought against or with respect to any Xxxxx Plan or any
fiduciary of any Xxxxx Plan.
(k) Neither Xxxxx nor any of its Subsidiaries has incurred or
reasonably expects to incur any liability under subtitle E of Title IV of ERISA
with respect to any "multiemployer plan," within the meaning of section
4001(a)(3) of ERISA.
(l) Except as described in Schedule 3.11(l) of the Xxxxx Disclosure
Letter, none of the assets of any Xxxxx Plan is invested in employer securities
(as defined in section 407(d)(1) of ERISA) or employer real property (as defined
in section 407(d)(2) of ERISA).
21
(m) There have been no "prohibited transactions" (as described in
section 406 of ERISA or section 4975 of the Code) with respect to any Xxxxx Plan
that would have, individually or in the aggregate, a Xxxxx Material Adverse
Effect.
(n) There have been no acts or omissions by Xxxxx or any of its
Subsidiaries which have given rise to or may give rise to fines, penalties,
taxes or related charges under section 502 of ERISA or Chapters 43, 47, 68 or
100 of the Code for which Xxxxx or any of its Subsidiaries are or may be liable
that would result in a Xxxxx Material Adverse Effect.
(o) Each Xxxxx Plan which constitutes a "group health plan" (as defined
in section 607(1) of ERISA or section 4980B(g)(2) of the Code), including any
plans of current and former affiliates which must be taken into account under
sections 4980B and 414(t) of the Code or section 601 of ERISA, has been operated
in material compliance with applicable law, including continuation coverage
requirements of section 4980B of the Code, Chapter 100 of the Code and section
601 of ERISA to the extent such requirements are applicable, and each such plan
(including any such plan covering retirees or other former employees) may be
amended (including, without limitation, to prospectively curtail or discontinue
benefits and/or increase participant contribution requirements) or terminated
without liability (other than with respect to welfare benefits in the ordinary
course) to Xxxxx, its Subsidiaries or successors.
(p) Except as listed and identified on Schedule 3.11(p) of the Xxxxx
Disclosure Letter, neither Xxxxx nor any of its Subsidiaries has any liability
or contingent liability for providing, under any Xxxxx Plan or otherwise, any
post-retirement medical or life insurance benefits, other than statutory
liability for providing group health plan continuation coverage under Part 6 of
Title I of ERISA and section 4980B of the Code.
(q) Obligations under or relating to the Xxxxx Plans are properly
reflected in the financial statements of Xxxxx in accordance with generally
accepted accounting principles.
(r) There has been no act or omission that would impair the ability of
Parent, Frontier or any of its Subsidiaries (or any successor thereto) to
unilaterally amend or terminate any Xxxxx Plan to the full extent permitted
under applicable law.
SECTION 3.12 LABOR MATTERS.
(a) Schedule 3.12(a) of the Xxxxx Disclosure Letter lists each of the
collective bargaining or other labor union contracts applicable to any employees
of Xxxxx or any of its Subsidiaries to which Xxxxx or any of its Subsidiaries is
a party or is otherwise subject (the "Xxxxx Bargaining Agreements"). To Holly's
knowledge, Xxxxx and each of its Subsidiaries, as applicable, is in compliance
with the Xxxxx Bargaining Agreements. As of the date of this Agreement, there is
no pending or, to Holly's knowledge, threatened labor dispute, strike, or work
stoppage against Xxxxx or any of its Subsidiaries that that would have,
individually or in the aggregate, a Xxxxx Material Adverse Effect.
(b) Xxxxx has provided Frontier with true, complete and correct copies
of (i) the Xxxxx Bargaining Agreements, including any amendments thereto, (ii)
the Xxxxx Plans covering the employees represented by the Xxxxx Bargaining
Agreements (the "Xxxxx Represented Employees"), including any amendments
thereto, and (iii) summaries of the Xxxxx Plans
22
covering the Xxxxx Represented Employees. There are no "employee pension
benefit plans" (as defined in Section 3(2) of ERISA), "employee welfare benefit
plans" (as defined in Section 3(l) of ERISA), or other programs, plans or
arrangements, maintained in whole or in part, contributed to, or required to be
contributed to, in whole or in part, by Xxxxx or any of its Subsidiaries
relating to the Xxxxx Represented Employees other than as disclosed to Frontier
pursuant to this paragraph.
SECTION 3.13 ENVIRONMENTAL MATTERS.
(a) As used in this Agreement:
(i) "Environmental Laws" means any and all applicable laws,
statutes, regulations, rules, orders, ordinances, legally enforceable
directives, and rules of common law of any governmental entity
pertaining to protection of human health (to the extent arising from
exposure to Hazardous Materials) or the environment (including, without
limitation, any natural resource damages or any generation, use,
storage, treatment, disposal, release, threatened release, discharge,
or emission of Hazardous Materials into the indoor or outdoor
environment) in effect at the time of Closing;
(ii) "Hazardous Materials" means any (1) chemical, product,
substance, waste, pollutant, or contaminant that is defined or listed
as hazardous or toxic or that is otherwise regulated under any
Environmental Law; (2) asbestos containing materials, whether in a
friable or non-friable condition, polychlorinated biphenyls, naturally
occurring radioactive materials or radon; and (3) any petroleum
hydrocarbons, petroleum products, petroleum substances, crude oil,
natural gas, and any components, fractions, or derivatives thereof;
(iii) "Environmental Permits" means any and all permits,
registrations, licenses, consents, exemptions, variances,
authorizations, and similar approvals required under Environmental
Laws;
(iv) "Release" means any depositing, spilling, leaking,
pumping, pouring, placing, emitting, discarding, abandoning, emptying,
discharging, migrating, injecting, escaping, leaching, dumping, or
disposing;
(v) "Xxxxx Real Properties" means those real properties owned,
leased, or otherwise operated by Xxxxx or its Subsidiaries in
connection with the performance of their respective businesses; and
(vi) "Offsite Non-Xxxxx Real Properties" means any real
properties other than the Xxxxx Real Properties.
(b) Except as would not have, individually or in the aggregate, a Xxxxx
Material Adverse Effect:
(i) Xxxxx and its Subsidiaries and their respective
operations, assets, businesses and Xxxxx Real Properties are in
compliance with all Environmental Laws and Environmental Permits;
23
(ii) All Environmental Permits required under Environmental
Laws for operating Holly's and its Subsidiaries' assets, businesses,
and Xxxxx Real Properties as they are currently being operated have
been obtained and are currently in full force and effect and, to
Holly's knowledge, there are no conditions or circumstances that would
limit or preclude it or its Subsidiaries from renewing such
Environmental Permits;
(iii) Xxxxx and its Subsidiaries are not subject to any
pending or, to Holly's knowledge, threatened claims, actions, suits,
investigations, inquiries or proceedings under Environmental Laws and
neither Xxxxx nor its Subsidiaries have received written notice of
alleged violations under applicable Environmental Laws with respect to
their respective operations, assets, businesses, or Xxxxx Real
Properties;
(iv) There have been no Releases of Hazardous Materials on,
under or from the Xxxxx Real Properties and there are no
investigations, remediations, removals or monitorings of Hazardous
Materials required under Environmental Laws at such properties;
(v) Neither Xxxxx nor its Subsidiaries has received any
written notice asserting an alleged liability or obligation under any
Environmental Laws with respect to the investigation, remediation,
removal, or monitoring of any Hazardous Materials at, under, or
Released or threatened to be Released from any Offsite Non-Xxxxx Real
Properties and, to the knowledge of Xxxxx, there are no conditions or
circumstances that would reasonably be expected to result in the
receipt of such written notice; and
(vi) Xxxxx and its Subsidiaries have made available to
Frontier complete and correct copies of all material environmental site
assessment reports, studies, and correspondence on environmental
matters (in each instance relevant to Xxxxx or its Subsidiaries) that
are in Holly's or its Subsidiaries' possession and relating to their
respective operations, assets, businesses, or the Xxxxx Real
Properties.
Neither Xxxxx nor its Subsidiaries makes any representation or warranty
regarding compliance or failure to comply with, or any actual or contingent
liability under, any Environmental Law, except as expressly set forth in this
Section 3.13.
SECTION 3.14 INTELLECTUAL PROPERTY. Xxxxx and its Subsidiaries own or
possess all necessary licenses or other valid rights to use all patents, patent
rights, trademarks, trademark rights and proprietary information used or held
for use in connection with their respective businesses as currently being
conducted, free and clear of material Liens, except where the failure to own or
possess such licenses and other rights would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect, and there are no assertions or
claims challenging the validity of any of the foregoing which would have,
individually or in the aggregate, a Xxxxx Material Adverse Effect. Except in the
ordinary course of business, neither Xxxxx nor any of its Subsidiaries has
granted to any other person any license to use any of the foregoing. The conduct
of Holly's and its Subsidiaries' respective businesses as currently conducted
does not conflict with any patents, patent rights, licenses, trademarks,
trademark rights, trade names, trade name rights or copyrights of others in a
way which would have, individually or in the aggregate, a Xxxxx Material Adverse
Effect. There is no infringement of
24
any proprietary right owned by or licensed by or to Xxxxx or any of its
Subsidiaries in a way which would have, individually or in the aggregate, a
Xxxxx Material Adverse Effect.
SECTION 3.15 TITLE TO PROPERTIES; CONDITION OF ASSETS.
(a) Except for goods and other property sold, used or otherwise
disposed of since January 31, 2003 in the ordinary course of business for fair
value, as of the date hereof, Xxxxx and its Subsidiaries have good and
indefeasible title to, or hold valid leasehold interests in, or valid rights of
way, easements or licenses over, under and across, all their respective
properties, interests in properties and assets, real and personal, reflected in
Holly's January 31, 2003 financial statements included in the Xxxxx Reports,
free and clear of any Lien, except: (a) Liens reflected in the balance sheet of
Xxxxx as of January 31, 2003 included in the Xxxxx Reports; (b) Liens for
current taxes, assessments or other governmental charges not yet due and
payable; (c) Liens of mechanics, materialmen, workmen and operators arising by
operation of law in the ordinary course of business, or by written agreement
existing as of the date hereof, for sums not yet due or being contested in good
faith by appropriate proceedings; and (d) such imperfections of title, minor
encumbrances, easements and Liens that would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect. All leases and other agreements
pursuant to which Xxxxx or any of its Subsidiaries leases, subleases or
otherwise acquires or obtains operating rights affecting any real or personal
property are valid, binding and enforceable in accordance with their terms,
except where the failure to be valid, binding and enforceable would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect; and there is
not, under any such leases, any existing or prospective default or event of
default or event which with notice or lapse of time, or both, would constitute a
default by Xxxxx or any of its Subsidiaries that would have, individually or in
the aggregate, a Xxxxx Material Adverse Effect. No consents or other approvals
of any lessor, or its lender, are required under any material lease as a result
of the consummation of the transactions contemplated by this Agreement.
(b) The tangible assets, including without limitation, refinery
improvements, terminal improvements, pipelines and equipment of Xxxxx and its
Subsidiaries (i) are in good operating condition and repair, subject to ordinary
wear and tear, and have been maintained in accordance with standard industry
practice, (ii) are adequate for the purpose for which they are being used and
are capable of being used in the business as presently conducted without present
need for replacement or repair, except in the ordinary course of business, (iii)
conform in all material respects with all applicable legal requirements, and
(iv) in the aggregate provide the capacity to engage in their respective
businesses on a continuous basis, subject to routine maintenance.
SECTION 3.16 INSURANCE. Xxxxx and its Subsidiaries maintain insurance
coverage adequate in the industry for the operation of their respective
businesses (taking into account the cost and availability of such insurance).
SECTION 3.17 NO BROKERS. Xxxxx has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Parent, Frontier, Merger Sub One, Merger Sub Two or Xxxxx to pay
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that Xxxxx has retained Credit
Suisse First Boston LLC to act as its financial advisor in connection with the
25
Xxxxx Merger and render the opinion referred to in Section 3.18, a copy of the
engagement letter for which and the terms of which (including the fees owed by
Xxxxx in connection therewith) have been disclosed in writing to Frontier prior
to the date hereof.
SECTION 3.18 OPINION OF FINANCIAL ADVISOR. The Board of Directors of
Xxxxx has received the opinion of Credit Suisse First Boston LLC to the effect
that the Xxxxx Merger Consideration is fair, from a financial point of view, to
the holders of shares of Xxxxx Common Stock, it being understood and
acknowledged by Frontier that such opinion has been rendered for the benefit of
the Board of Directors of Xxxxx, and is not intended to, and may not, be relied
upon by Frontier, its affiliates or their respective Subsidiaries.
SECTION 3.19 CONTRACTS; DEBT INSTRUMENTS.
(a) Except for documents filed or listed as exhibits to the Xxxxx
Reports filed since July 31, 2002 ("Xxxxx Material Contracts"), there are no
contracts or leases that are material to the business, properties, assets,
financial condition or results of operations of Xxxxx and its Subsidiaries taken
as a whole. Neither Xxxxx nor any of its Subsidiaries is in violation of or in
default under (nor does there exist any condition which with the passage of time
or the giving of notice or both would cause such a violation of or default
under) any Xxxxx Material Contract to which it is a party or by which it or any
of its properties or assets is bound, except for violations or defaults that
would not have, individually or in the aggregate, a Xxxxx Material Adverse
Effect. Each Xxxxx Material Contract is in full force and effect, and is a
legal, valid and binding obligation of Xxxxx or one of its Subsidiaries and, to
the knowledge of Xxxxx, each of the other parties thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity and except where the failure of any
Xxxxx Material Contract to be in full force and effect or a legal, valid and
binding obligation and enforceable in accordance with its terms would not have,
individually or in the aggregate, a Xxxxx Material Adverse Effect. No condition
exists or event has occurred which (whether with or without notice or lapse of
time or both) would constitute a default by Xxxxx or one of its Subsidiaries or,
to the knowledge of Xxxxx, any other party thereto under any Xxxxx Material
Contract or result in a right of termination of any Xxxxx Material Contract,
except for any condition or event that would not have, individually or in the
aggregate, a Xxxxx Material Adverse Effect.
(b) Set forth in Schedule 3.19(b) of the Xxxxx Disclosure Letter is, as
of the date hereof, (i) a list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant to which any
indebtedness of Xxxxx or its Subsidiaries in an aggregate principal amount in
excess of $1,000,000 is outstanding or may be incurred, (ii) the respective
principal amounts outstanding thereunder as of the date hereof and (iii) the
approximate amount of consolidated cash and cash equivalents of Xxxxx and its
Subsidiaries as of the date hereof.
(c) Neither Xxxxx nor any of its Subsidiaries has entered into any
contract, and there is no commitment, judgment, injunction, order or decree to
which Xxxxx or any of its Subsidiaries is a party or subject to, that has or
would reasonably be expected to have the effect of prohibiting or impairing the
conduct of business by Xxxxx or any of its Subsidiaries (or of Parent or any of
its other Subsidiaries after the Mergers) or any contract that may be terminable
26
as a result of Frontier's status as a competitor of any party to such contract,
except, in each case, for any prohibition, impairment or termination right that
would not have, individually or in the aggregate, a Xxxxx Material Adverse
Effect.
SECTION 3.20 RECOMMENDATION; VOTE REQUIRED. The Board of Directors of
Xxxxx, at a meeting duly called and held, has by unanimous vote of those
directors present, (i) determined that this Agreement and the transactions
contemplated hereby are advisable, fair to and in the best interests of Xxxxx
stockholders, (ii) approved this Agreement and the transactions contemplated
hereby and (iii) recommended that this Agreement and the transactions
contemplated hereby be approved and adopted by the holders of Xxxxx Common
Stock. The affirmative vote of the holders of a majority of the outstanding
shares of Xxxxx Common Stock is the only vote of any class or series of Xxxxx
capital stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby (the "Xxxxx Requisite Vote").
SECTION 3.21 CERTAIN APPROVALS. Holly's Board of Directors has taken
any and all necessary and appropriate action to render inapplicable to the
Mergers and the transactions contemplated by this Agreement the restrictions
contained in Section 203 of the DGCL and any other "fair price," "moratorium,"
control share acquisition, interested stockholder or other similar antitakeover
provision or regulation and any restrictive provision of any antitakeover
provision in the certificate of incorporation or bylaws of Xxxxx.
SECTION 3.22 CERTAIN CONTRACTS. Neither Xxxxx nor any of its
Subsidiaries is a party to or bound by (i) any non-competition agreement or any
other agreement or obligation which purports to limit the manner in which, or
the localities in which, the current business of Xxxxx and its Subsidiaries,
taken as a whole, or (to the knowledge of Xxxxx) Frontier and its Subsidiaries,
taken as a whole, is conducted or (ii) any executory agreement or obligation
which pertains to the acquisition or disposition of any asset, or which provides
any third party any lien, claim or preferential right with regard thereto,
except, in the case of this clause (ii), for such agreements or obligations that
would not have, individually or in the aggregate, a Xxxxx Material Adverse
Effect.
SECTION 3.23 NO RIGHTS PLAN OR AGREEMENT. Xxxxx has not adopted any
so-called "poison pill" rights plan or agreement.
SECTION 3.24 SUPPORT AGREEMENTS. Effective contemporaneously with
Holly's entering into this Agreement, Xxxxx has delivered to Frontier a Xxxxx
Xxxxxx Support Agreement in the form attached hereto as Exhibit C, duly executed
by each person identified in Schedule 3.24 to the Xxxxx Disclosure Letter; and
each such Xxxxx Xxxxxx Support Agreement is enforceable by Frontier in
accordance with its terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
FRONTIER
Except as set forth in the disclosure letter delivered to Xxxxx
concurrently with the execution hereof (the "Frontier Disclosure Letter") in
accordance with Section 8.16 or as
27
disclosed with reasonable specificity in the Frontier Reports (as defined in
Section 4.7), Frontier represents and warrants to Xxxxx that:
SECTION 4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Frontier is
a corporation duly incorporated, validly existing and in good standing under the
laws of its state of incorporation. Frontier is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not have,
individually or in the aggregate, a Frontier Material Adverse Effect (as defined
in Section 8.9). Frontier has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now
conducted. The copies of Frontier's articles of incorporation and bylaws
previously made available to Xxxxx are true and correct and contain all
amendments as of the date hereof.
SECTION 4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Frontier
has the requisite corporate power and authority to execute and deliver this
Agreement and all other agreements and documents contemplated hereby to which it
is a party. The consummation by Frontier of the transactions contemplated hereby
has been duly authorized by all requisite corporate action, other than the
approval of the Frontier Merger by Frontier's stockholders. This Agreement
constitutes the valid and legally binding obligation of Frontier, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
SECTION 4.3 CAPITALIZATION. The authorized capital stock of Frontier
consists of 50,000,000 shares of Frontier Common Stock and 500,000 shares of
Frontier's preferred stock, par value $1.00 per share ("Frontier Preferred
Stock"). As of March 17, 2003, there were (a) 25,925,383 shares of Frontier
Common Stock issued and outstanding (exclusive of unvested restricted shares),
(b) no shares of Frontier Preferred Stock issued and outstanding, (c) 3,408,125
shares of Frontier Common Stock issuable pursuant to options granted under the
stock options plans of Frontier described in Schedule 4.3 of the Frontier
Disclosure Letter (the "Frontier Stock Plans"), of which the weighted average
exercise price was approximately $12.55 per share, and (d) 205,632 unvested
restricted shares of Frontier Common Stock issued under the Frontier Stock
Plans. All issued and outstanding shares of Frontier Common Stock and Frontier
Preferred Stock (i) are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights, (ii) were not issued in violation
of the terms of any agreement or other understanding binding upon Frontier and
(iii) were issued in compliance with all applicable charter documents of
Frontier and all applicable federal and state securities laws, rules and
regulations. Except (i) as set forth in this Section 4.3, (ii) for any shares of
Frontier Common Stock issued pursuant to the exercise of options or other awards
referred to in subsection (c) above, and (iii) for shares of Frontier Common
Stock issuable pursuant to the exercise of such options, there are no
outstanding shares of capital stock and there are no options, warrants, calls,
subscriptions, stockholder rights plans or similar instruments, convertible
securities, or other rights, agreements or commitments which obligate Frontier
or any of its Subsidiaries to issue, transfer or sell any shares of capital
stock or other voting securities of Frontier or any of its Subsidiaries.
Frontier has no outstanding bonds, debentures, notes or other obligations the
holders of which have the
28
right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the stockholders of Frontier on any matter.
SECTION 4.4 SUBSIDIARIES. (a) Each of Frontier's Subsidiaries is a
corporation, limited liability company or partnership duly organized, validly
existing and in good standing (where applicable) under the laws of its
jurisdiction of incorporation or organization, has the corporate, limited
liability company or partnership power and authority to own, operate and lease
its properties and to carry on its business as it is now being conducted, and is
duly qualified to do business and is in good standing (where applicable) in each
jurisdiction in which the ownership, operation or lease of its property or the
conduct of its business requires such qualification, except for jurisdictions in
which such failure to be so qualified or to be in good standing would not have,
individually or in the aggregate, a Frontier Material Adverse Effect. All of the
outstanding shares of capital stock of, or other ownership interests in, each of
Frontier's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by Frontier free and clear
of all Liens. Schedule 4.4 of the Frontier Disclosure Letter sets forth for each
Subsidiary of Frontier its name and jurisdiction of incorporation or
organization.
SECTION 4.5 NO VIOLATION. Neither Frontier nor any of its Subsidiaries
is, or has received notice that it would be with the passage of time, in
violation of any term, condition or provision of (a) its charter documents or
bylaws, (b) any loan or credit agreement, note, bond, mortgage, indenture,
contract, agreement, lease, license or other instrument or (c) any order of any
court, governmental authority or arbitration board or tribunal, or any law,
ordinance, governmental rule or regulation to which Frontier or any of its
Subsidiaries or any of their respective properties or assets is subject, or is
delinquent with respect to any report required to be filed with any governmental
entity, except, in the case of matters described in clause (b) or (c), as would
not have, individually or in the aggregate, a Frontier Material Adverse Effect.
Except as would not have, individually or in the aggregate, a Frontier Material
Adverse Effect, (i) Frontier and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders, franchises and approvals of all governmental
authorities necessary for the lawful conduct of their respective businesses (the
"Frontier Permits") and (ii) Frontier and its Subsidiaries are in compliance
with the terms of the Frontier Permits. No investigation by any governmental
authority with respect to Frontier or any of its Subsidiaries is pending or, to
the knowledge of Frontier, threatened, other than those that would not have,
individually or in the aggregate, a Frontier Material Adverse Effect.
SECTION 4.6 NO CONFLICT.
(a) Neither the execution and delivery by Frontier of this Agreement
nor the consummation by Frontier of the transactions contemplated hereby in
accordance with the terms hereof will: (i) conflict with or result in a breach
of any provisions of the charter documents or bylaws of Frontier; (ii) violate,
or conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or give rise to a right of purchase under, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties of Frontier or its Subsidiaries under, or result in
being declared void, voidable, or without further binding effect, or otherwise
result in a detriment to Frontier or any of its Subsidiaries under, any of the
terms, conditions or provisions
29
of, any note, bond, mortgage, indenture, deed of trust, Frontier Permit, lease,
contract, agreement, joint venture or other instrument or obligation to which
Frontier or any of its Subsidiaries is a party, or by which Frontier or any of
its Subsidiaries or any of their properties is bound or affected; or (iii)
contravene or conflict with or constitute a violation of any provision of any
law, rule, regulation, judgment, order or decree binding upon or applicable to
Frontier or any of its Subsidiaries, except, in the case of matters described in
clause (ii) or (iii), as would not have or reasonably be expected to have,
individually or in the aggregate, a Frontier Material Adverse Effect.
(b) Neither the execution and delivery by Frontier of this Agreement
nor the consummation by Frontier of the transactions contemplated hereby in
accordance with the terms hereof will require any consent, approval or
authorization of, or filing or registration with, any governmental or regulatory
authority, other than Regulatory Filings, except for any consent, approval or
authorization the failure of which to obtain and for any filing or registration
the failure of which to make would not have or reasonably be expected to have,
individually or in the aggregate, a Frontier Material Adverse Effect.
(c) Other than as contemplated by Section 4.6(b), no consents,
assignments, waivers, authorizations or other certificates are necessary in
connection with the transactions contemplated hereby to provide for the
continuation in full force and effect of all of the Frontier Material Contracts
(as hereinafter defined) or for Frontier to consummate the transactions
contemplated hereby, except where the failure to receive such consents or other
certificates would not have or reasonably be expected to have, individually or
in the aggregate, a Frontier Material Adverse Effect.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) result in or
constitute the satisfaction of a condition to (whether or not there be any
additional condition to) any payment from Frontier or its Subsidiaries
(including severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any director, employee or independent contractor of
Frontier or any of its Subsidiaries under any Frontier Plan (as defined in
Section 4.11) or otherwise; (ii) increase any benefits otherwise payable under
any Frontier Plan or otherwise; or (iii) result in the acceleration of the time
of payment or vesting of any such benefits.
SECTION 4.7 SEC DOCUMENTS. Frontier has made available to Xxxxx each
registration statement, report, proxy statement or information statement (other
than preliminary materials) filed by Frontier with the SEC since December 31,
2000, each in the form (including exhibits and any amendments thereto) filed
with the SEC prior to the date hereof (collectively, the "Frontier Reports"),
and Frontier has filed all forms, reports and documents required to be filed by
it with the SEC pursuant to relevant securities statutes, regulations, policies
and rules since such time. As of their respective dates, the Frontier Reports
(i) were prepared in accordance with the applicable requirements of the
Securities Act, the Exchange Act, and the rules and regulations thereunder and
complied with the then applicable accounting requirements and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading
except for such statements, if any, as have been modified or superseded by
subsequent filings with the SEC prior to the date hereof.
30
Each of the consolidated balance sheets included in or incorporated by reference
into the Frontier Reports (including the related notes and schedules) fairly
presents in all material respects the consolidated financial position of
Frontier and its Subsidiaries as of its date and each of the consolidated
statements of operations, cash flows and stockholders' equity included in or
incorporated by reference into the Frontier Reports (including any related notes
and schedules) fairly presents in all material respects the results of
operations, cash flows or changes in stockholders' equity, as the case may be,
of Frontier and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to such exceptions as may be permitted by Form
10-Q of the SEC), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein, and except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount or effect.
SECTION 4.8 LITIGATION AND LIABILITIES. Except as set forth on Schedule
4.8 of the Frontier Disclosure Letter, there are no actions, suits or
proceedings pending against Frontier or any of its Subsidiaries or, to
Frontier's knowledge, threatened against Frontier or any of its Subsidiaries, at
law or in equity, or before or by any federal, state or foreign commission,
court, board, bureau, agency or instrumentality, other than those that would not
have or reasonably be expected to have, individually or in the aggregate, a
Frontier Material Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against Frontier or any of its Subsidiaries, other
than those that would not have, individually or in the aggregate, a Frontier
Material Adverse Effect. There are no obligations or liabilities of any nature,
whether accrued, absolute, contingent or otherwise, of Frontier or any of its
Subsidiaries, other than those liabilities and obligations (a) that are
disclosed in the Frontier Reports, (b) that have been incurred in the ordinary
course of business since December 31, 2002, (c) related to expenses associated
with the transactions contemplated by this Agreement or (d) that would not have
or reasonably be expected to have, individually or in the aggregate, a Frontier
Material Adverse Effect.
SECTION 4.9 ABSENCE OF CERTAIN CHANGES. Since December 31, 2002,
Frontier has conducted its business only in the ordinary and usual course of
business and during such period there has not been any (i) event, condition,
action or occurrence that has had or would reasonably be expected to have,
individually or in the aggregate, a Frontier Material Adverse Effect; (ii)
through the date hereof, any material change by Frontier or any of its
Subsidiaries (viewed on a consolidated basis) in any of its accounting methods,
principles or practices or any of its tax methods, practices or elections,
except for changes required by generally accepted accounting principles; (iii)
any material damage, destruction, or loss to the business or properties of
Frontier and its Subsidiaries, taken as a whole, not covered by insurance; (iv)
through the date hereof, any declaration, setting aside or payment of any
dividend (other than ordinary dividends on the Frontier Common Stock at a rate
not greater than $0.05 per share in any quarter) or other distribution in
respect of the capital stock of Frontier, or any direct or indirect redemption,
purchase or any other acquisition by Frontier of any such stock; (v) through the
date hereof, any change in the capital stock or in the number of shares or
classes of Frontier's authorized or outstanding capital stock (other than as a
result of issuances under the Frontier Stock Plans, exercises of options to
purchase the Frontier Common Stock outstanding or issued, or such other
issuances of capital stock, in each case, as permitted hereunder pursuant to
Section 5.1(b)(vi)); (vi) any increase in or establishment of any bonus,
insurance, severance,
31
deferred compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business; or (vii) through the date hereof, any event, condition, action or
occurrence that is prohibited on or after the date of this Agreement under
Section 5.1(b)(viii), (ix), (x), (xii), (xiii), (xv), (xvi), or (xx) of this
Agreement.
SECTION 4.10 TAXES.
(a) Each of Frontier and its Subsidiaries and each affiliated,
consolidated, combined, unitary or similar group of which any such corporation
is or, since January 1, 1991, was a member has (i) duly filed (or there has been
filed on its behalf) on a timely basis (taking into account any extensions of
time to file before the date hereof) with appropriate governmental authorities
all Tax Returns required to be filed by or with respect to it, except to the
extent that any failure to file would not have, individually or in the
aggregate, a Frontier Material Adverse Effect, and (ii) duly paid or deposited
in full on a timely basis or made adequate provisions in accordance with
generally accepted accounting principles (or there has been paid or deposited or
adequate provision has been made on its behalf) for the payment of all Taxes
required to be paid by it other than those being contested in good faith by
Frontier or a Subsidiary of Frontier and adequately provided for on the
financial statements contained in the Frontier Reports and except to the extent
that any failure to pay or deposit or make adequate provision for the payment of
such Taxes would not have, individually or in the aggregate, a Frontier Material
Adverse Effect.
(b) Except for matters that would not have, individually or in the
aggregate, a Frontier Material Adverse Effect, and matters disclosed on Schedule
4.10(b) of the Frontier Disclosure Letter, (i) the federal income tax returns of
Frontier and each of its Subsidiaries have been examined by the IRS (or the
applicable statutes of limitation for the assessment of federal income taxes for
such periods have expired) for all periods; (ii) all deficiencies asserted as a
result of any examinations of Frontier and its Subsidiaries by any taxing
authority have been paid fully, settled or adequately provided for in the
financial statements contained in the Frontier Reports; (iii) as of the date
hereof, neither Frontier nor any of its Subsidiaries has granted any requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the filing of any Tax Return or the assessment of any Taxes of
Frontier or any of its Subsidiaries that will be outstanding as of the Effective
Time; (iv) neither Frontier nor any of its Subsidiaries is a party to, is bound
by or has any obligation under any tax sharing, allocation or indemnity
agreement or any similar agreement or arrangement; (v) there are no Tax liens on
any assets of Frontier or its Subsidiaries except for (A) Taxes not yet
currently due and (B) matters being contested by Frontier or its Subsidiaries in
good faith for which adequate reserves are reflected in the financial statements
contained in the Frontier Reports; and (vi) neither Frontier nor any of its
Subsidiaries is a party to an agreement that provides for the payment of any
amount that could constitute a "parachute payment" within the meaning of section
280G of the Code.
(c) Except as disclosed on Schedule 4.10(c) of the Frontier Disclosure
Letter, neither Frontier nor any of its Subsidiaries has participated, directly
or indirectly, in any (i) reportable transaction within the meaning of Treas.
Reg. Section 1.6011-4T(b), or (ii) tax shelter required to be registered under
Section 6111 of the Code.
32
SECTION 4.11 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section 4.11, the term Subsidiaries as applied
to Frontier shall include any entity, whether or not incorporated, which, with
Frontier, forms or formed a controlled group of corporations, a group of trades
or business under common control or an affiliated service group, within the
meaning of section 414(b), (c) or (m) of the Code, within the six full calendar
years prior to the Closing Date.
(b) All employee benefit plans, programs, arrangements and agreements,
including but not limited to pension, retirement, disability, medical, dental or
other health insurance plans; life insurance or other death benefit plans;
profit sharing, deferred compensation, stock option, bonus or other incentive
plans; vacation benefit plans or policies; severance or redundancy plans;
individual employee agreements; and foreign plans not subject to ERISA (whether
or not described in Section 3(3) of ERISA, whether or not funded, whether or not
written or oral and whether or not legally enforceable, in whole or in part) (i)
to which Frontier or any Subsidiary is a party or by which it is bound, (ii)
with respect to which Frontier or any Subsidiary has made any payments or
contributions, or (iii) to which Frontier or any Subsidiary may otherwise have
any liability, are listed on Schedule 4.11(b) of the Frontier Disclosure Letter
(the "Frontier Plans").
(c) Frontier has made available to Xxxxx a true, correct and complete
copy of each of the Frontier Plans, and all contracts relating thereto, or to
the funding thereof, including, without limitation, all trust agreements,
insurance contracts, administration contracts, investment management agreements,
subscription and participation agreements, and record-keeping agreements, each
as in effect on the date hereof. In the case of any Frontier Plan that is not in
written form, Xxxxx has been supplied with an accurate description of such
Frontier Plan as in effect on the date hereof. A true, correct and complete copy
of the most recent annual report, actuarial report, accountant's opinion of the
plan's financial statements, summary plan description and IRS determination
letter with respect to each Frontier Plan, to the extent applicable, and a
current schedule of assets (and the fair market value thereof assuming
liquidation of any asset which is not readily tradable) held with respect to any
funded Frontier Plan have been made available to Xxxxx. There have been no
changes in the financial condition of the respective plans from that stated in
the annual reports and actuarial reports supplied that would have, individually
or in the aggregate, a Frontier Material Adverse Effect.
(d) All Frontier Plans comply in form and have been administered in
operation in compliance in all material respects with all applicable
requirements of law, excluding any deficiencies that would not have,
individually or in the aggregate, a Frontier Material Adverse Effect, no event
has occurred which will or could cause any such Frontier Plan to fail to comply
with such requirements, excluding any deficiencies that would not have,
individually or in the aggregate, a Frontier Material Adverse Effect, and no
notice has been issued by any governmental authority questioning or challenging
such compliance, and no inquiry or audit has been initiated with respect thereto
by any governmental authority.
(e) All required employer contributions under any such plans have been
made and the applicable funds have been funded in accordance with the terms
thereof, excluding any
33
deficiencies that would not have, individually or in the aggregate, a Frontier
Material Adverse Effect.
(f) To the extent applicable, the Frontier Plans comply, in all
material respects, with the requirements of ERISA, the Code and any other
applicable tax act and other laws, and any Frontier Plan intended to be
qualified under section 401(a) of the Code has been determined by the IRS to be
so qualified (or an application for qualification is pending before the IRS)
under the currently applicable provisions of the Code, and nothing has occurred
or is anticipated to occur to cause the loss of such qualified status.
(g) Except as specifically set forth on Schedule 4.11(g) of the
Frontier Disclosure Letter, Frontier does not sponsor, maintain, participate in
or contribute to, and has not at any time sponsored, maintained, participated in
or contributed to (and never has been required to contribute to) any (i) Pension
Plan that is or was subject to minimum funding standards of the Code or ERISA;
(ii) "multiemployer plan" as that term is defined in Section 414(f) of the Code
or Section 4001(a)(3) of ERISA; (iii) foreign benefit plans; or (iv) voluntary
employee benefit associations intended to be exempt from federal income tax
under Section 501(c)(9) of the Code.
(h) Except as specifically set forth on Schedule 4.11(h) of the
Frontier Disclosure Letter: (i) Frontier has paid all premiums (including any
applicable interest, charges and penalties for late payment) due the PBGC with
respect to each Pension Plan for which premiums to the PBGC are required; (ii)
no Pension Plan had, as of its most recent actuarial report, an "unfunded
benefit liability" (as such term is defined in Section 4001(a)(18) of ERISA) or
has an "accumulated funding deficiency" (as such term is defined in Section 302
of ERISA or Section 412 of the Code), whether or not waived; (iii) no Pension
Plan has a "liquidity shortfall" as defined in Section 412(m)(5) of the Code;
(iv) no notice has been required under Section 4011 of ERISA with respect to any
Pension Plan; (v) no event described in Section 401(a)(29) of the Code has
occurred or can reasonably be expected to occur with respect to any Pension
Plan; (vi) no "reportable event" (as that term is defined in Section 4043 of
ERISA and for which the 30-day notice requirement has not been waived) has
occurred with respect to any Pension Plan; (vii) each Pension Plan uses a
funding method permissible under ERISA and the actuarial assumptions used in
connection therewith are reasonable individually and in the aggregate; (viii)
the fair market value of the assets of each Pension Plan will exceed or equal
the "projected benefit obligation" (as defined in Statement of Financial
Accounting Standard No. 87).
(i) Except as specifically set forth on Schedule 4.11(i) of the
Frontier Disclosure Letter, the execution of this Agreement or the consummation
of the Mergers will not give rise to or trigger any change of control,
accelerated vesting, severance or other similar provisions in any Frontier Plan.
(j) Excluding claims for benefits incurred in the ordinary course of
the Frontier Plan activities, there are no pending or anticipated claims against
or otherwise involving any of the Frontier Plans and no suit, action or other
litigation has been brought against or with respect to any Frontier Plan or any
fiduciary of any Frontier Plan.
34
(k) Neither Frontier nor any of its Subsidiaries has incurred or
reasonably expects to incur any liability under subtitle E of Title IV of ERISA
with respect to any "multiemployer plan," within the meaning of section
4001(a)(3) of ERISA.
(l) Except as described in Schedule 4.11(l) of the Frontier Disclosure
Letter, none of the assets of any Frontier Plan is invested in employer
securities (as defined in section 407(d)(1) of ERISA) or employer real property
(as defined in section 407(d)(2) of ERISA).
(m) There have been no "prohibited transactions" (as described in
section 406 of ERISA or section 4975 of the Code) with respect to any Frontier
Plan that would have, individually or in the aggregate, a Frontier Material
Adverse Effect.
(n) There have been no acts or omissions by Frontier or any of its
Subsidiaries which have given rise to or may give rise to fines, penalties,
taxes or related charges under section 502 of ERISA or Chapters 43, 47, 68 or
100 of the Code for which Frontier or any of its Subsidiaries are or may be
liable that would result in a Frontier Material Adverse Effect.
(o) Each Frontier Plan which constitutes a "group health plan" (as
defined in section 607(1) of ERISA or section 4980B(g)(2) of the Code),
including any plans of current and former affiliates which must be taken into
account under sections 4980B and 414(t) of the Code or section 601 of ERISA, has
been operated in material compliance with applicable law, including continuation
coverage requirements of section 4980B of the Code, Chapter 100 of the Code and
section 601 of ERISA to the extent such requirements are applicable, and each
such plan (including any such plan covering retirees or other former employees)
may be amended (including, without limitation, to prospectively curtail or
discontinue benefits and/or increase participant contribution requirements), or
terminated without liability (other than with respect to welfare benefits in the
ordinary course) to Frontier, its Subsidiaries or successors.
(p) Except as listed and identified on Schedule 4.11(p) of the Frontier
Disclosure Letter, neither Frontier nor any of its Subsidiaries has any
liability or contingent liability for providing, under any Frontier Plan or
otherwise, any post-retirement medical or life insurance benefits, other than
statutory liability for providing group health plan continuation coverage under
Part 6 of Title I of ERISA and section 4980B of the Code.
(q) Obligations under or relating to the Frontier Plans are properly
reflected in the financial statements of Frontier in accordance with generally
accepted accounting principles.
(r) There has been no act or omission that would impair the ability of
Frontier or any of its Subsidiaries (or any successor thereto) to unilaterally
amend or terminate any Frontier Plan to the full extent permitted under
applicable law.
SECTION 4.12 LABOR MATTERS.
(a) Schedule 4.12(a) of the Frontier Disclosure Letter lists all
collective bargaining or other labor union contracts applicable to any employee
of Frontier or any of its Subsidiaries to which Frontier or any of its
Subsidiaries is a party or is otherwise subject (the "Frontier Bargaining
Agreements"). To Frontier's knowledge, Frontier and each of its Subsidiaries are
in compliance with the Frontier Bargaining Agreements. As of the date of this
Agreement, there is
35
no pending or, to Frontier's knowledge, threatened labor dispute, strike, or
work stoppage against Frontier or any of its Subsidiaries that that would have,
individually or in the aggregate, a Frontier Material Adverse Effect.
(b) Frontier has provided Xxxxx with true, complete and correct copies
of (i) the Frontier Bargaining Agreements, including any amendments thereto,
(ii) the Frontier Plans covering the employees represented by the Frontier
Bargaining Agreements (the "Frontier Represented Employees"), including any
amendments thereto, and (iii) summaries of the Frontier Plans covering the
Frontier Represented Employees. There are no "employee pension benefit plans"
(as defined in Section 3(2) of ERISA), "employee welfare benefit plans" (as
defined in Section 3(l) of ERISA), or other programs, plans or arrangements,
maintained in whole or in part, contributed to, or required to be contributed
to, in whole or in part, by Frontier or any of its Subsidiaries relating to the
Frontier Represented Employees other than as disclosed to Xxxxx in Schedule
4.11(g) of the Frontier Disclosure Letter.
SECTION 4.13 ENVIRONMENTAL MATTERS.
(a) As used in this Agreement:
(i) "Frontier Real Properties" means those real properties
owned, leased, or otherwise operated by Frontier or its Subsidiaries in
connection with the performance of any of their respective businesses;
and
(ii) "Offsite Non-Frontier Real Properties" means any real
properties other than the Frontier Real Properties.
(b) Except as would not have, individually or in the aggregate, a
Frontier Material Adverse Effect:
(i) Frontier and its Subsidiaries and any of their respective
operations, assets, businesses and Frontier Real Properties are in
compliance with all Environmental Laws and Environmental Permits;
(ii) All Environmental Permits required under Environmental
Laws for operating Frontier's and its Subsidiaries' assets, businesses,
and Frontier Real Properties as they are currently being operated have
been obtained and are currently in full force and effect and, to
Frontier's knowledge, there are no conditions or circumstances that
would limit or preclude it or its Subsidiaries from renewing such
Environmental Permits;
(iii) Frontier and its Subsidiaries are not subject to any
pending or, to Frontier's knowledge, threatened claims, actions, suits,
investigations, inquiries or proceedings under Environmental Laws and
none of Frontier or its Subsidiaries have received written notice of
alleged violations under applicable Environmental Laws with respect to
their respective operations, assets, businesses, or Frontier Real
Properties;
(iv) There have been no Releases of Hazardous Materials on,
under or from the Frontier Real Properties and there are no
investigations, remediations, removals or
36
monitorings of Hazardous Materials required under Environmental Laws at
such properties;
(v) None of Frontier or its Subsidiaries has received any
written notice asserting an alleged liability or obligation under any
Environmental Laws with respect to the investigation, remediation,
removal, or monitoring of any Hazardous Materials at, under, or
Released or threatened to be Released from any Offsite Non-Frontier
Real Properties and, to the knowledge of Frontier, there are no
conditions or circumstances that would reasonably be expected to result
in the receipt of such written notice; and
(vi) Frontier and its Subsidiaries have made available to
Xxxxx complete and correct copies of all material environmental site
assessment reports, studies, and correspondence on environmental
matters (in each instance relevant to Frontier or its Subsidiaries)
that are in Frontier's or its Subsidiaries' possession and relating to
their respective operations, assets, businesses or Frontier Real
Properties.
None of Frontier or its Subsidiaries makes any representation or
warranty regarding compliance or failure to comply with, or any actual or
contingent liability under, any Environmental Law, except as expressly set forth
in this Section 4.13.
SECTION 4.14 INTELLECTUAL PROPERTY. Frontier and its Subsidiaries own
or possess all necessary licenses or other valid rights to use all patents,
patent rights, trademarks, trademark rights and proprietary information used or
held for use in connection with their respective businesses as currently being
conducted, free and clear of material Liens, except where the failure to own or
possess such licenses and other rights would not have, individually or in the
aggregate, a Frontier Material Adverse Effect, and there are no assertions or
claims challenging the validity of any of the foregoing which would have,
individually or in the aggregate, a Frontier Material Adverse Effect. Except in
the ordinary course of business, neither Frontier nor any of its Subsidiaries
has granted to any other person any license to use any of the foregoing. The
conduct of Frontier's and its Subsidiaries' respective businesses as currently
conducted does not conflict with any patents, patent rights, licenses,
trademarks, trademark rights, trade names, trade name rights or copyrights of
others in a way which would have, individually or in the aggregate, a Frontier
Material Adverse Effect. There is no infringement of any proprietary right owned
by or licensed by or to Frontier or any of its Subsidiaries in a way which would
have, individually or in the aggregate, a Frontier Material Adverse Effect.
SECTION 4.15 TITLE TO PROPERTIES; CONDITION OF ASSETS.
(a) Except for goods and other property sold, used or otherwise
disposed of since December 31, 2002 in the ordinary course of business for fair
value, as of the date hereof, Frontier and its Subsidiaries have good and
indefeasible title to, or hold valid leasehold interests in, or valid rights of
way, easements or licenses over, under and across, all their respective
properties, interests in properties and assets, real and personal, reflected in
Frontier's December 31, 2002 financial statements included in the Frontier
Reports, free and clear of any Lien, except: (a) Liens reflected in the balance
sheet of Frontier as of December 31, 2002 included in the Frontier Reports; (b)
Liens for current taxes, assessments or other governmental charges not yet due
and payable; (c) Liens of mechanics, materialmen and operators arising by
37
operation of law in the ordinary course of business, or by written agreement
existing as of the date hereof, for sums not yet due or being contested in good
faith by appropriate proceedings; and (d) such imperfections of title, minor
encumbrances easements and Liens that would not have, individually or in the
aggregate, a Frontier Material Adverse Effect. All leases, subleases and other
agreements pursuant to which Frontier or any of its Subsidiaries leases or
otherwise acquires or obtains operating rights affecting any real or personal
property are valid, binding and enforceable in accordance with their terms,
except where the failure to be valid, binding and enforceable would not have,
individually or in the aggregate, a Frontier Material Adverse Effect; and there
is not, under any such leases, any existing or prospective default or event of
default or event which with notice or lapse of time, or both, would constitute a
default by Frontier or any of its Subsidiaries that would have, individually or
in the aggregate, a Frontier Material Adverse Effect. No consents or other
approvals of any lessor, or its lender, are required under any material lease as
a result of the consummation of the transactions contemplated by this Agreement.
(b) The tangible assets, including without limitation, refinery
improvements, terminal improvements, pipelines and equipment of Frontier and its
Subsidiaries (i) are in good operating condition and repair, subject to ordinary
wear and tear, and have been maintained in accordance with standard industry
practice, (ii) are adequate for the purpose for which they are being used and
are capable of being used in the business as presently conducted without present
need for replacement or repair, except in the ordinary course of business, (iii)
conform in all material respects with all applicable legal requirements, and
(iv) in the aggregate provide the capacity to engage in their respective
businesses on a continuous basis, subject to routine maintenance.
SECTION 4.16 INSURANCE. Frontier and its Subsidiaries maintain
insurance coverage adequate in the industry for the operation of their
respective businesses (taking into account the cost and availability of such
insurance).
SECTION 4.17 NO BROKERS. Frontier has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Parent, Xxxxx, Frontier, Merger Sub One or Merger Sub Two to pay
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that Frontier has retained
Xxxxxx Xxxxxxx & Co., Inc. to act as its financial advisor in connection with
the Frontier Merger and render the opinion referred to in Section 4.18, the
terms of which (including the fees owed by Frontier in connection therewith)
have been disclosed in writing to Xxxxx prior to the date hereof.
SECTION 4.18 OPINION OF FINANCIAL ADVISOR. The Board of Directors of
Frontier has received the opinion of Xxxxxx Xxxxxxx & Co., Inc. to the effect
that the Frontier Merger Consideration is fair, from a financial point of view,
to the holders of shares of Frontier Common Stock; it being understood and
acknowledged by Frontier that such opinion has been rendered for the benefit of
the Board of Directors of Frontier, and is not intended to, and may not, be
relied upon by Xxxxx, its affiliates or their respective Subsidiaries.
38
SECTION 4.19 CONTRACTS; DEBT INSTRUMENTS.
(a) Except for documents filed or listed as exhibits to the Frontier
Reports filed since December 31, 2002 ("Frontier Material Contracts"), as of the
date hereof, there are no contracts or leases that are material to the business,
properties, assets, financial condition or results of operations of Frontier and
its Subsidiaries taken as a whole. Neither Frontier nor any of its Subsidiaries
is in violation of or in default under (nor does there exist any condition which
with the passage of time or the giving of notice or both would cause such a
violation of or default under) any Frontier Material Contract to which it is a
party or by which it or any of its properties or assets is bound, except for
violations or defaults that would not have, individually or in the aggregate, a
Frontier Material Adverse Effect. Each Frontier Material Contract is in full
force and effect, and is a legal, valid and binding obligation of Frontier or
one of its Subsidiaries and, to the knowledge of Frontier, each of the other
parties thereto, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity and
except where the failure of any Frontier Material Contract to be in full force
and effect or a legal, valid and binding obligation and enforceable in
accordance with its terms would not have, individually or in the aggregate, a
Frontier Material Adverse Effect. No condition exists or event has occurred
which (whether with or without notice or lapse of time or both) would constitute
a default by Frontier or one of its Subsidiaries or, to the knowledge of
Frontier, any other party thereto under any Frontier Material Contract or result
in a right of termination of any Frontier Material Contract, except for any
condition or event that would not have, individually or in the aggregate, a
Frontier Material Adverse Effect.
(b) Set forth in Schedule 4.19(b) of the Frontier Disclosure Letter is,
as of the date hereof, (i) a list of all loan or credit agreements, notes,
bonds, mortgages, indentures and other agreements and instruments pursuant to
which any indebtedness of Frontier or its Subsidiaries in an aggregate principal
amount in excess of $1,000,000 is outstanding or may be incurred, (ii) the
respective principal amounts outstanding thereunder as of the date hereof and
(iii) the approximate amount of consolidated cash and cash equivalents of
Frontier and its Subsidiaries as of the date hereof.
(c) Neither Frontier nor any of its Subsidiaries has entered into any
contract, and there is no commitment, judgment, injunction, order or decree to
which Frontier or any of its Subsidiaries is a party or subject to, that has or
would reasonably be expected to have the effect of prohibiting or impairing the
conduct of business by Frontier or any of its Subsidiaries (or of Parent or any
of its other Subsidiaries after the Mergers) or any contract that may be
terminable as a result of Holly's status as a competitor of any party to such
contract, except, in each case, for any prohibition, impairment or termination
right that would not have, individually or in the aggregate, a Frontier Material
Adverse Effect.
SECTION 4.20 RECOMMENDATION; VOTE REQUIRED. The Board of Directors of
Frontier, at a meeting duly called and held, has by unanimous vote of those
directors present, (i) determined that this Agreement and the transactions
contemplated hereby are advisable, fair to and in the best interests of Frontier
stockholders, (ii) adopted this Agreement and the transactions contemplated
hereby and (iii) recommended that this Agreement and the transactions
contemplated hereby be approved by the holders of Frontier Common Stock. The
39
affirmative vote of the holders of a majority of the outstanding shares of
Frontier Common Stock is the only vote of the holders of any class or series of
Frontier capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby (the "Frontier Requisite Vote").
SECTION 4.21 CERTAIN APPROVALS. Frontier's Board of Directors has taken
any and all necessary and appropriate action to render inapplicable to the
Mergers and the transactions contemplated by this Agreement the restrictions
contained in the Wyoming Management Stability Act and any other "fair price,"
"moratorium," control share acquisition, interested stockholder or similar
antitakeover provision or regulation and any restrictive provision of any
antitakeover provision in the articles of incorporation or bylaws of Frontier.
SECTION 4.22 CERTAIN CONTRACTS. Neither Frontier nor any of its
Subsidiaries is a party to or bound by (i) any non-competition agreement or any
other agreement or obligation which purports to limit the manner in which, or
the localities in which, the current business of Frontier and its Subsidiaries,
taken as a whole, or (to the knowledge of Frontier) Xxxxx and its Subsidiaries,
taken as a whole, is conducted or (ii) any executory agreement or obligation
which pertains to the acquisition or disposition of any asset, or which provides
any third party any lien, claim or preferential right with regard thereto,
except, in the case of this clause (ii), for such agreements or obligations that
would not have, individually or in the aggregate, a Frontier Material Adverse
Effect.
SECTION 4.23 NO RIGHTS PLAN OR AGREEMENT. Frontier has not adopted any
so-called "poison pill" rights plan or agreement.
SECTION 4.24 SUPPORT AGREEMENTS. Effective contemporaneously with
Frontier's entering into this Agreement, Frontier has delivered to Xxxxx a
Frontier Affiliate's Support Agreement in the form attached hereto as Exhibit D,
duly executed by each person identified in Schedule 4.24 to the Frontier
Disclosure Letter; and each such Frontier Affiliate's Support Agreement is
enforceable by Xxxxx in accordance with its terms.
ARTICLE 5
COVENANTS
SECTION 5.1 CONDUCT OF BUSINESS.
(a) Prior to the Effective Time, except as set forth in the Xxxxx
Disclosure Letter or as expressly contemplated by this Agreement, including
Section 5.13, or as consented to in writing by Frontier, Xxxxx:
(i) shall, and shall cause each of its Subsidiaries to,
conduct its operations according to their usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable best efforts, and shall cause
each of its Subsidiaries to use its reasonable best efforts, to
preserve intact their business organizations and goodwill, keep
available the services of their respective officers and employees and
40
maintain satisfactory relationships with those persons having business
relationships with them;
(iii) shall not amend its certificate of incorporation or
bylaws;
(iv) shall promptly notify Frontier of any material adverse
change in its financial condition or business or any termination,
cancellation, repudiation or material breach of any Xxxxx Material
Contract (or communications expressly indicating the same may be
contemplated), or the institution of any material litigation or
material governmental complaints, investigations or hearings (or
communications in writing indicating the same may be contemplated), or
the breach in any material respect of any representation or warranty
contained herein;
(v) shall promptly make available (in paper form or via the
Internet) to Frontier true and correct copies of any report, statement
or schedule filed with the SEC subsequent to the date of this
Agreement;
(vi) shall not (A) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on
the date hereof and disclosed in the Xxxxx Disclosure Letter, issue any
shares of its capital stock, effect any stock split or otherwise change
its capitalization as it existed on the date hereof; (B) grant, confer
or award any option, warrant, conversion right or other right not
existing on the date hereof to acquire any shares of its capital stock
except pursuant to contractual commitments existing on the date of this
Agreement and disclosed in the Xxxxx Disclosure Letter; (C) except as
provided in Section 5.13(a)(ii) and 5.13(d), increase any compensation
or benefits of any officer, director, employee or agent of Xxxxx or any
of its Subsidiaries or enter into or amend any employment agreement or
severance agreement with any of its present or future officers; or (D)
adopt any new employee benefit plan (including any stock option, stock
benefit or stock purchase plan) or amend (except as required by law)
any existing employee benefit plan in any material respect;
(vii) shall not, and, in the case of clause (B) below, shall
not permit any of its Subsidiaries to (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any
shares of its capital stock (other than Holly's ordinary quarterly
dividends payable with respect to the shares of Xxxxx Common Stock of
$0.11 per share in accordance with Section 5.15), or (B) redeem,
purchase or otherwise acquire any shares of its capital stock or
capital stock of any of its Subsidiaries or any option, warrant,
conversion right or other right to acquire such shares, or make any
commitment for any such action;
(viii) shall not, and shall not permit any of its Subsidiaries
to, sell, lease or otherwise dispose of any of its assets (including
capital stock of Subsidiaries) for an amount in excess of $1,000,000,
individually or in the aggregate, except in the ordinary course of
business and for fair value;
(ix) shall not, and shall not permit any of its Subsidiaries
to, except pursuant to contractual commitments in effect on the date
hereof and disclosed in the Xxxxx
41
Disclosure Letter and except for amounts that in the aggregate do not
exceed $1,000,000, authorize, propose, agree to, enter into or
consummate any merger, consolidation or business combination
transaction (other than the Xxxxx Merger) or acquire or agree to
acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial amount of the assets
of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof;
(x) shall not, except as may be required as a result of a
change in law or in generally accepted accounting principles, change
any of the accounting principles or practices used by it;
(xi) shall, and shall cause each of its Subsidiaries to, use
reasonable best efforts to maintain with financially responsible
insurance companies insurance in such amounts and against such risks
and losses as are customary for such party;
(xii) shall not, and shall not permit any of its Subsidiaries
to, except where it would not have, individually or in the aggregate, a
Xxxxx Material Adverse Effect, (A) make or rescind any express or
deemed election relating to Taxes, including elections for any and all
joint ventures, partnerships, limited liability companies, working
interests or other investments where it has the capacity to make such
binding election, (B) settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, or (C) change in any respect any of its
methods of reporting any item for federal income tax purposes from
those employed in the preparation of its federal income Tax Return for
the most recent taxable year for which a return has been filed, except
as may be required by applicable law;
(xiii) shall not, nor shall it permit any of its Subsidiaries
to, (A) incur any indebtedness for borrowed money (except under credit
lines in existence as of the date of this Agreement and disclosed in
the Xxxxx Disclosure Letter or disclosed with reasonable specificity in
the Xxxxx Reports) or guarantee any such indebtedness or issue or sell
any debt securities or warrants or rights to acquire any debt
securities of such party or any of its Subsidiaries or guarantee any
debt securities of others, (B) except in the ordinary course of
business, enter into or materially extend or amend any material lease
(whether such lease is an operating or capital lease) or create or
materially extend any material mortgages, liens, security interests or
other encumbrances on the property of Xxxxx or Frontier or any of their
Subsidiaries in connection with any indebtedness thereof or (C) make or
commit to make aggregate capital expenditures in excess of those set
forth in Schedule 5.1(a)(xiii) of the Xxxxx Disclosure Letter;
(xiv) subject to Section 5.5, shall not take any action that
is likely to delay materially or adversely affect the ability of any of
the parties hereto to obtain any consent, authorization, order or
approval of any governmental commission, board or other regulatory body
or the expiration of any applicable waiting period required to
consummate the Mergers;
(xv) unless in the good faith opinion of its Board of
Directors after consultation with its outside legal counsel complying
with the following provisions would be
42
inconsistent with the fiduciary duties of such Board of Directors and
only then if taking such actions would not violate any of the other
terms of this Agreement, shall not, and shall not permit any of its
Subsidiaries to, terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its
Subsidiaries is a party; and during such period shall enforce, to the
fullest extent permitted under applicable law, the provisions of such
agreement, including by obtaining injunctions to prevent any breaches
of such agreements and to enforce specifically the terms and provisions
thereof in any court of the United States of America or any state
having jurisdiction;
(xvi) shall not enter into or amend any agreement with any
holder of Xxxxx capital stock with respect to holding, voting or
disposing of shares of Xxxxx Common Stock;
(xvii) shall not by resolution of its Board of Directors cause
the acceleration of rights, benefits or payments under any Xxxxx Plans
except as provided in Section 2.5(c);
(xviii) other than in the ordinary course of business
consistent with past practices, enter into, amend or terminate any
hedge contracts;
(xix) shall not split, combine, subdivide or reclassify its
outstanding shares of capital stock;
(xx) shall not purchase any Frontier Common Stock or any other
debt, equity or other securities of Frontier;
(xxi) shall not, and shall not permit any of its Subsidiaries
to, (A) do business in any country in which Xxxxx or any of its
Subsidiaries is not doing business as of the date hereof or (B) enter
into any joint venture, partnership or other joint business venture
with any person; and
(xxii) shall not, nor shall it permit any of its Subsidiaries
to, agree in writing or otherwise to take any of the foregoing actions.
(b) Prior to the Effective Time, except as set forth in the Frontier
Disclosure Letter or as expressly contemplated by this Agreement, including
Section 5.13, or as consented to in writing by Xxxxx, Frontier:
(i) shall, and shall cause each of its Subsidiaries to,
conduct its operations according to their usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable best efforts, and shall cause
each of its Subsidiaries to use its reasonable best efforts, to
preserve intact their business organizations and goodwill, keep
available the services of their respective officers and employees and
maintain satisfactory relationships with those persons having business
relationships with them;
43
(iii) shall not amend its articles of incorporation or bylaws;
(iv) shall promptly notify Xxxxx of any material adverse
change in its financial condition or business or any termination,
cancellation, repudiation or material breach of any Frontier Material
Contract (or communications expressly indicating the same may be
contemplated), or the institution of any material litigation or
material governmental complaints, investigations or hearings (or
communications in writing indicating the same may be contemplated), or
the breach in any material respect of any representation or warranty
contained herein;
(v) shall promptly make available (in paper form or via the
Internet) to Xxxxx true and correct copies of any report, statement or
schedule filed with the SEC subsequent to the date of this Agreement;
(vi) except as set forth on Schedule 5.1(b)(vi) of the
Frontier Disclosure Letter, shall not (A) except pursuant to the
exercise of options, warrants, conversion rights and other contractual
rights existing on the date hereof and disclosed in the Frontier
Disclosure Letter, issue any shares of its capital stock, effect any
stock split or otherwise change its capitalization as it existed on the
date hereof; (B) grant, confer or award any option, warrant, conversion
right or other right not existing on the date hereof to acquire any
shares of its capital stock except pursuant to contractual commitments
existing on the date of this Agreement and disclosed in the Frontier
Disclosure Letter; (C) increase any compensation or benefits of any
officer, director, employee or agent of the Frontier or any of its
Subsidiaries or enter into or amend any employment agreement or
severance agreement with any of its present or future officers,
directors or employees, or (D) except as contemplated in Section 5.4
and Section 5.13 adopt any new employee benefit plan (including any
stock option, stock benefit or stock purchase plan) or amend (except as
required by law) any existing employee benefit plan in any material
respect;
(vii) shall not, and, in the case of clause (B) below, shall
not permit any of its Subsidiaries to (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any
shares of its capital stock (other than ordinary dividends on the
Frontier Common Stock at a rate not greater than $0.05 per share in any
quarter in accordance with Section 5.15) or (B) redeem, purchase or
otherwise acquire any shares of its capital stock or capital stock of
any of its Subsidiaries or any option, warrant, conversion right or
other right to acquire such shares, or make any commitment for any such
action;
(viii) shall not, and shall not permit any of its Subsidiaries
to, sell, lease or otherwise dispose of any of its assets (including
capital stock of Subsidiaries) for an amount in excess of $1,000,000,
individually or in the aggregate, except in the ordinary course of
business and for fair value;
(ix) shall not, and shall not permit any of its Subsidiaries
to, except pursuant to contractual commitments in effect on the date
hereof and disclosed in Schedule 5.1(b)(ix) of the Frontier Disclosure
Letter and except for amounts that in the aggregate do not exceed
$1,000,000 authorize, propose, agree to, enter into or consummate any
merger,
44
consolidation or business combination transaction (other than the
Frontier Merger) or acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in
or a substantial amount of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof;
(x) shall not, except as may be required as a result of a
change in law or in generally accepted accounting principles, change
any of the accounting principles or practices used by it;
(xi) shall, and shall cause each of its Subsidiaries to, use
reasonable best efforts to maintain with financially responsible
insurance companies insurance in such amounts and against such risks
and losses as are customary for such party;
(xii) shall not, and shall not permit any of its Subsidiaries
to, except where it would not have, individually or in the aggregate, a
Frontier Material Adverse Effect, (A) make or rescind any express or
deemed election relating to Taxes, including elections for any and all
joint ventures, partnerships, limited liability companies, working
interests or other investments where it has the capacity to make such
binding election, (B) settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, or (C) change in any respect any of its
methods of reporting any item for federal income tax purposes from
those employed in the preparation of its federal income Tax Return for
the most recent taxable year for which a return has been filed, except
as may be required by applicable law;
(xiii) shall not, nor shall it permit any of its Subsidiaries
to, (A) incur any indebtedness for borrowed money (except under credit
lines in existence as of the date of this Agreement and disclosed in
Schedule 5.1(b)(xiii) of the Frontier Disclosure Letter or disclosed
with reasonable specificity in the Frontier Reports) or guarantee any
such indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of such party or any of its
Subsidiaries or guarantee any debt securities of others, (B) except in
the ordinary course of business, enter into or materially extend or
amend any material lease (whether such lease is an operating or capital
lease) or create or materially extend any material mortgages, liens,
security interests or other encumbrances on the property of Xxxxx or
Frontier or any of their Subsidiaries in connection with any
indebtedness thereof or (C) make or commit to make aggregate capital
expenditures in excess of those set forth in Schedule 5.1(b)(xiii) of
the Frontier Disclosure Letter;
(xiv) subject to Section 5.5, shall not take any action that
is likely to delay materially or adversely affect the ability of any of
the parties hereto to obtain any consent, authorization, order or
approval of any governmental commission, board or other regulatory body
or the expiration of any applicable waiting period required to
consummate the Mergers;
(xv) unless in the good faith opinion of its Board of
Directors after consultation with its outside legal counsel complying
with the following provisions would be inconsistent with the fiduciary
duties of such Board of Directors and only then if taking
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such actions would not violate any of the other terms of this
Agreement, shall not, and shall not permit any of its Subsidiaries to,
terminate, amend, modify or waive any provision of any confidentiality
or standstill agreement to which it or any of its Subsidiaries is a
party; and during such period shall enforce, to the fullest extent
permitted under applicable law, the provisions of such agreement,
including by obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof
in any court of the United States of America or any state having
jurisdiction;
(xvi) shall not enter into or amend any agreement with any
holder of Frontier capital stock with respect to holding, voting or
disposing of shares of Frontier Common Stock;
(xvii) shall not by resolution of its Board of Directors cause
the acceleration of rights, benefits or payments under any Frontier
Plans;
(xviii) other than in the ordinary course of business
consistent with past practice, enter into, amend or terminate any hedge
contracts;
(xix) shall not split, combine, subdivide or reclassify its
outstanding shares of capital stock;
(xx) shall not purchase any Xxxxx Common Stock or any other
debt, equity or other securities of Xxxxx;
(xxi) shall not, and shall not permit any of its Subsidiaries
to, (A) do business in any country in which Frontier or any of its
Subsidiaries is not doing business as of the date hereof or (B) enter
into any joint venture, partnership or other joint business venture
with any person; and
(xxii) shall not, nor shall it permit any of its Subsidiaries
to, agree in writing or otherwise to take any of the foregoing actions.
SECTION 5.2 NO SOLICITATION BY XXXXX.
(a) Xxxxx agrees that it and its Subsidiaries: (i) will not (and Xxxxx
will not permit its or its Subsidiaries' officers, directors, employees, agents
or representatives, including any investment banker, attorney or accountant
retained by Xxxxx or any of its Subsidiaries, to) solicit, initiate or encourage
(including by way of furnishing non-public information) any inquiry, proposal or
offer (including any proposal or offer to its stockholders) with respect to a
third party tender offer, merger, consolidation, business combination or similar
transaction involving any assets or class of capital stock of Xxxxx, or any
acquisition of capital stock of Xxxxx (other than upon exercise of Xxxxx Stock
Options that are outstanding as of the date hereof) or a business or assets
(exclusive of sales of current assets in the ordinary course of business) with a
value of $1,000,000 or more in the aggregate, in a single transaction or a
series of related transactions, or any combination of the foregoing (any such
proposal, offer or transaction being hereinafter referred to as a "Xxxxx
Acquisition Proposal") or participate or engage in any discussions or
negotiations concerning a Xxxxx Acquisition Proposal; and (ii) will immediately
cease and cause
46
to be terminated any existing discussions or negotiations with any third parties
conducted heretofore with respect to any Xxxxx Acquisition Proposal; provided
that, subject to Section 5.4(b), nothing contained in this Agreement shall
prevent Xxxxx or its Board of Directors from (A) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a Xxxxx Acquisition Proposal,
(B) making any disclosure to the holders of shares of Xxxxx Common Stock if in
the good faith judgment of Holly's Board of Directors failure to make such
disclosure would be inconsistent with its fiduciary duties under applicable law
or the rules of the AMEX or (C) providing information (pursuant to a
confidentiality agreement in reasonably customary form and which does not
contain terms that prevent Xxxxx from complying with its obligations under this
Section 5.2) to or engaging in any negotiations or discussions with any person
or group who has made an unsolicited bona fide Xxxxx Acquisition Proposal if,
with respect to the actions set forth in clause (C), (x) in the good faith
judgment of Holly's Board of Directors, taking into account all legal,
financial, regulatory and other aspects of the Xxxxx Acquisition Proposal and
the likelihood of consummation and after consultation with its financial
advisors, such Xxxxx Acquisition Proposal is reasonably likely to result in a
transaction more favorable to the holders of the shares of Xxxxx Common Stock
from a financial point of view than the Mergers (a "Xxxxx Superior Proposal")
and (y) the Board of Directors of Xxxxx, after consultation with its outside
legal counsel, determines in good faith that the failure to do so would be
inconsistent with the fiduciary obligations of the Board of Directors of Xxxxx
under applicable law.
(b) Xxxxx agrees that it will notify Frontier promptly (and in any
event within 24 hours) if any proposal or offer relating to or constituting a
Xxxxx Acquisition Proposal is received by, any information is requested from, or
any discussions or negotiations are sought to be initiated or continued with,
Xxxxx or any of its officers, directors, employees, agents or representatives.
In connection with such notice, Xxxxx shall indicate the identity of the person
or group making such request or inquiry or engaging in such negotiations or
discussions and the material terms and conditions of any Xxxxx Acquisition
Proposal. Thereafter, Xxxxx shall keep Frontier fully informed on a prompt basis
(and in any event within 24 hours) of any material changes, additions or
adjustments to the terms or conditions of any such proposal or offer. Prior to
taking any action referred to in clause (C) of the proviso of Section 5.2(a), if
Xxxxx intends to participate in any such discussions or negotiations or provide
any such information to any such third party, Xxxxx shall give notice to
Frontier including the identity of the relevant person or group.
(c) Nothing in this Section 5.2 shall permit Xxxxx to enter into any
agreement with respect to a Xxxxx Acquisition Proposal during the term of this
Agreement, it being agreed that, during the term of this Agreement, Xxxxx shall
not enter into any agreement with any person that provides for, or in any way
facilitates, a Xxxxx Acquisition Proposal, other than a confidentiality
agreement and/or standstill agreement permitted under Section 5.2(a) that is in
reasonably customary form and that does not contain terms that prevent Xxxxx
from complying with its obligations under this Section 5.2.
SECTION 5.3 NO SOLICITATION BY FRONTIER.
(a) Frontier agrees that it and its Subsidiaries: (i) will not (and
Frontier will not permit its or its Subsidiaries' officers, directors,
employees, agents or representatives, including any investment banker, attorney
or accountant retained by Frontier or any of its Subsidiaries, to)
47
solicit, initiate or encourage (including by way of furnishing non-public
information) any inquiry, proposal or offer (including any proposal or offer to
its stockholders) with respect to a third party tender offer, merger,
consolidation, business combination or similar transaction involving any assets
or class of capital stock of Frontier, or any acquisition of capital stock of
Frontier (other than upon exercise of Frontier Stock Options that are
outstanding as of the date hereof) or a business or assets (exclusive of sales
of current assets in the ordinary course of business) with a value of $1,000,000
or more in the aggregate, in a single transaction or a series of related
transactions, or any combination of the foregoing (any such proposal, offer or
transaction being hereinafter referred to as a "Frontier Acquisition Proposal")
or participate or engage in any discussions or negotiations concerning a
Frontier Acquisition Proposal; and (ii) will immediately cease and cause to be
terminated any existing discussions or negotiations with any third parties
conducted heretofore with respect to any Frontier Acquisition Proposal; provided
that, subject to Section 5.4(b), nothing contained in this Agreement shall
prevent Frontier or its Board of Directors from (A) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a Frontier Acquisition
Proposal, (B) making any disclosure to the holders of Frontier Common Stock if
in the good faith judgment of Frontier's Board of Directors failure to make such
disclosure would be inconsistent with its fiduciary duties under applicable law
or the rules of the NYSE or (C) providing information (pursuant to a
confidentiality agreement in reasonably customary form and which does not
contain terms that prevent Frontier from complying with its obligations under
this Section 5.3) to or engaging in any negotiations or discussions with any
person or group who has made an unsolicited bona fide Frontier Acquisition
Proposal if, with respect to the actions set forth in clause (C), (x) in the
good faith judgment of Frontier's Board of Directors, taking into account all
legal, financial, regulatory and other aspects of the Acquisition Proposal and
the likelihood of consummation and after consultation with its financial
advisors, such Frontier Acquisition Proposal is reasonably likely to result in a
transaction more favorable to the holders of the Frontier Common Stock from a
financial point of view than the Mergers (a "Frontier Superior Proposal") and
(y) the Board of Directors of Frontier, after consultation with its outside
legal counsel, determines in good faith that the failure to do so would be
inconsistent with the fiduciary obligations of the Board of Directors of
Frontier under applicable law.
(b) Frontier agrees that it will notify Xxxxx promptly (and in any
event within 24 hours) if any proposal or offer relating to or constituting a
Frontier Acquisition Proposal is received by, any information is requested from,
or any discussions or negotiations are sought to be initiated or continued with,
Frontier or any of its officers, directors, employees, agents or
representatives. In connection with such notice, Frontier shall indicate the
identity of the person or group making such request or inquiry or engaging in
such negotiations or discussions and the material terms and conditions of any
Frontier Acquisition Proposal. Thereafter, Frontier shall keep Xxxxx fully
informed on a prompt basis (and in any event within 24 hours) of any material
changes, additions or adjustments to the terms or conditions of any such
proposal or offer. Prior to taking any action referred to in clause (C) of the
proviso of Section 5.3(a), if Frontier intends to participate in any such
discussions or negotiations or provide any such information to any such third
party, Frontier shall give notice to Xxxxx, including the identity of the
relevant person or group.
(c) Nothing in this Section 5.3 shall permit Frontier to enter into any
agreement with respect to a Frontier Acquisition Proposal during the term of
this Agreement, it being agreed
48
that, during the term of this Agreement, Frontier shall not enter into any
agreement with any person that provides for, or in any way facilitates, a
Frontier Acquisition Proposal, other than a confidentiality agreement and/or
standstill agreement permitted under Section 5.3(a) that is in reasonably
customary form and that does not contain terms that prevent Frontier from
complying with its obligations under this Section 5.3, including the identity of
the relevant person or group.
SECTION 5.4 MEETINGS OF STOCKHOLDERS.
(a) Xxxxx will take all action necessary in accordance with applicable
law and its certificate of incorporation and bylaws to convene as promptly as
practicable a meeting of its stockholders for purposes of obtaining the Xxxxx
Requisite Vote. Frontier will take all action necessary in accordance with
applicable law and its articles of incorporation and bylaws to convene as
promptly as practicable a meeting of its stockholders for purposes of obtaining
the Frontier Requisite Vote. Frontier and Xxxxx shall each use their reasonable
best efforts to hold their respective stockholders meetings on the same day.
(b) Except as otherwise permitted by this Section 5.4, Xxxxx and
Frontier, through their respective Boards of Directors, shall (i) recommend
approval of the matters described in Section 5.4(a) to be submitted to, and
adoption of the applicable plan of merger contained in this Agreement by, their
respective stockholders, (ii) not withdraw, withhold, modify, or change such
recommendation in a manner adverse to the other party, (iii) not recommend or
declare advisable any Xxxxx Superior Proposal or Frontier Superior Proposal, as
the case may be, and (iv) unless such recommendation has been withdrawn,
withheld, modified or changed as permitted by this Section 5.4(b), use their
reasonable best efforts to solicit the Xxxxx Requisite Vote (in the case of
Xxxxx) and the Frontier Requisite Vote (in the case of Frontier). The Board of
Directors of Xxxxx or Frontier, as applicable (the "Withdrawing Party," the
other party being the "Non-Withdrawing Party"), may at any time prior to
obtaining the Xxxxx Requisite Vote or Frontier Requisite Vote, as applicable,
(A) withdraw, withhold, modify, or change, in a manner adverse to the
Non-Withdrawing Party, any approval or recommendation regarding this Agreement
or the transactions contemplated hereby or (B) approve and be prepared to enter
into or recommend and declare advisable any Xxxxx Superior Proposal or Frontier
Superior Proposal, as the case may be, if its Board of Directors determines in
good faith after consultation with its outside legal counsel that the failure to
take the action in question would be inconsistent with the fiduciary obligations
of such Board of Directors under applicable law. Xxxxx and Frontier shall each
be required to comply with its obligations under Section 5.4(a) whether or not
its Board of Directors withdraws, modifies, withholds or changes its
recommendation or declaration regarding this Agreement or the transactions
contemplated hereby or recommends or declares the advisability of any other
offer or proposal.
SECTION 5.5 FILINGS; REASONABLE BEST EFFORTS.
(a) Subject to the terms and conditions herein provided, Xxxxx and
Frontier shall:
(i) promptly (but in any event within 15 business days from
the date hereof) make their respective filings under the HSR Act with
respect to the Mergers and thereafter shall promptly make any other
required submissions under the HSR Act;
49
(ii) use their reasonable best efforts to satisfy the
conditions to closing in Article 6 (including, in the case of Xxxxx,
obtaining the opinion described in Section 6.2(b) and, in the case of
Frontier, obtaining the opinion described in Section 6.3(b)) as
promptly as practicable and to cooperate with one another in (1)
determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time
from, governmental or regulatory authorities of the United States, the
several states, and foreign jurisdictions in connection with the
execution and delivery of this Agreement and the consummation of the
Mergers and the transactions contemplated hereby; and (2) timely making
all such filings and timely seeking all such consents, approvals,
permits or authorizations;
(iii) promptly notify each other of any communication
concerning this Agreement or the Mergers to that party from any
governmental authority and permit the other party to review in advance
any proposed communication concerning this Agreement or the Mergers to
any governmental entity;
(iv) not agree to participate in any meeting or discussion
with any governmental authority in respect of any filings,
investigation or other inquiry concerning this Agreement or the Mergers
unless it consults with the other party in advance and, to the extent
permitted by such governmental authority, gives the other party the
opportunity to attend and participate thereat;
(v) furnish the other party with copies of all correspondence,
filings and communications (and memoranda setting forth the substance
thereof) between them and their affiliates and their respective
representatives on the one hand, and any government or regulatory
authority or members or their respective staffs on the other hand, with
respect to this Agreement and the Mergers; and
(vi) furnish the other party with such necessary information
and reasonable assistance as such other parties and their respective
affiliates may reasonably request in connection with their preparation
of necessary filings, registrations or submissions of information to
any governmental or regulatory authorities, including any filings
necessary or appropriate under the provisions of the HSR Act.
(b) Without limiting Section 5.5(a) and subject to Section 5.5(c),
Frontier and Xxxxx shall:
(i) each use its reasonable best efforts to avoid the entry
of, or to have vacated or terminated, any decree, order or judgment
that would restrain, prevent or delay the Closing, including defending
through litigation on the merits any claim asserted in any court by any
party; and
(ii) each use its reasonable best efforts to avoid or
eliminate each and every impediment under any antitrust, competition or
trade regulation law that may be asserted by any governmental entity
with respect to the Mergers so as to enable the Closing to occur as
soon as reasonably possible.
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(c) Neither Frontier nor Xxxxx shall, without the other party's prior
written consent, commit to any divestitures, licenses, hold separate
arrangements or similar matters, including covenants affecting business
operating practices (or allow its Subsidiaries to commit to any divestitures,
licenses, hold separate arrangements or similar matters) in connection with the
transactions contemplated under this Agreement, but the parties shall commit or
consent to, and shall use reasonable efforts to effect (and shall cause their
Subsidiaries to commit or consent to and use reasonable efforts to effect), any
such divestitures, licenses, hold separate arrangements or similar matters as
any governmental entity shall request if such divestitures, licenses, hold
separate arrangements or similar matters are required by any such governmental
entity as a condition to resolving such governmental entity's objections to
either or both the Merger or obtaining its approval of either or both the
Mergers and are contingent upon consummation of either or both the Mergers;
provided that, notwithstanding anything to the contrary in this Section 5.5(c)
or the remainder of this Agreement, neither Frontier, Xxxxx nor any of their
respective Subsidiaries shall be required to agree (with respect to (x) Frontier
or its Subsidiaries or (y) Xxxxx or its Subsidiaries) to any divestitures,
licenses, hold separate arrangements or similar matters, including covenants
affecting business operating practices, if such divestitures, licenses,
arrangements or similar matters, individually or in the aggregate, would have a
Frontier Material Adverse Effect or a Xxxxx Material Adverse Effect.
SECTION 5.6 INSPECTION. From the date hereof to the Effective Time,
Xxxxx and Frontier shall allow all designated officers, attorneys, accountants
and other representatives of the other party reasonable access at all reasonable
times upon reasonable notice to the records and files, correspondence, audits
and properties, as well as to all information relating to commitments,
contracts, titles and financial position, or otherwise pertaining to the
business and affairs of Xxxxx and its Subsidiaries or Frontier and its
Subsidiaries, including inspection of such properties; provided that no
investigation pursuant to this Section 5.6 shall affect any representation or
warranty given by any party hereunder, and provided further that notwithstanding
the provision of information or investigation by any party, no party shall be
deemed to make any representation or warranty except as expressly set forth in
this Agreement. Notwithstanding the foregoing, no party shall be required to
provide any information which it reasonably believes it may not provide to any
other party by reason of applicable law, rules or regulations, which that party
reasonably believes constitutes information protected by attorney/client
privilege, or which it is required to keep confidential by reason of contract or
agreement with third parties. The parties hereto will make reasonable and
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply. Xxxxx and Frontier agree that they
will not, and will cause their representatives not to, use any information
obtained pursuant to this Section 5.6 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. All nonpublic
information obtained pursuant to this Section 5.6 shall be governed by the
Mutual Confidentiality Agreement dated March 7, 2003 between Frontier and Xxxxx
(the "Confidentiality Agreement").
SECTION 5.7 PUBLICITY. Xxxxx and Frontier will consult with each other
and will mutually agree upon any press releases or public announcements
pertaining to this Agreement or the transactions contemplated hereby and shall
not issue any such press releases or make any such public announcements prior to
such consultation and agreement, except as may be required by applicable law or
by obligations pursuant to any listing agreement with any national securities
exchange, in which case the party proposing to issue such press release or make
such public
51
announcement shall use its reasonable best efforts to consult in good faith with
the other party before issuing any such press releases or making any such public
announcements.
SECTION 5.8 REGISTRATION STATEMENT. As promptly as reasonably
practicable following the date hereof, Frontier and Xxxxx shall cooperate in
preparing and each shall cause to be filed with the SEC mutually acceptable
joint proxy materials (the "Proxy Statement/Prospectus") and Frontier and Xxxxx
shall prepare, and Parent shall file with the SEC, a Registration Statement on
Form S-4 under the Securities Act (the "Registration Statement"). The Proxy
Statement/Prospectus will be included as a prospectus in and will constitute a
part of the Registration Statement as Parent's prospectus. Each of Frontier,
Xxxxx and Parent shall use reasonable best efforts to have the Proxy
Statement/Prospectus cleared by the SEC and the Registration Statement declared
effective by the SEC and to keep the Registration Statement effective as long as
is necessary to consummate the Mergers and the transactions contemplated hereby.
Each of Frontier, Xxxxx and Parent shall, as promptly as practicable after
receipt thereof, provide the other parties with copies of any written comments,
and advise each other of any oral comments, with respect to the Proxy
Statement/Prospectus or Registration Statement received from the SEC. Frontier,
Xxxxx and Parent shall cooperate and provide the other parties with a reasonable
opportunity to review and comment on any amendment or supplement to the Proxy
Statement/Prospectus and the Registration Statement prior to filing such with
the SEC, and each will provide each other party with a copy of all such filings
made with the SEC. Notwithstanding any other provision herein to the contrary,
no amendment or supplement (including by incorporation by reference) to the
Proxy Statement/Prospectus or the Registration Statement shall be made without
the approval of both Frontier and Xxxxx, which approval shall not be
unreasonably withheld or delayed; provided that, with respect to documents filed
by a party hereto that are incorporated by reference in the Registration
Statement or Proxy Statement/Prospectus, this right of approval shall apply only
with respect to information relating to the other party or its business,
financial condition or results of operations; and provided, further, that
Frontier, in connection with a change in the recommendation of its Board of
Directors as to the Mergers, and Xxxxx, in connection with a change in the
recommendation of its Board of Directors as to the Mergers, may amend or
supplement the Proxy Statement/Prospectus or Registration Statement (including
by incorporation by reference) to effect such a change, and in such event, this
right of approval shall apply only with respect to information relating to the
other party or its business, financial condition or results of operations, and
shall be subject to the right of each party to have its Board of Directors'
deliberations and conclusions accurately described. Frontier will use reasonable
best efforts to cause the Proxy Statement/Prospectus to be mailed to Frontier
stockholders, and Xxxxx will use reasonable best efforts to cause the Proxy
Statement/Prospectus to be mailed to Xxxxx stockholders, in each case, as
promptly as practicable after the Registration Statement is declared effective
under the Securities Act. Each of Frontier, Xxxxx and Parent shall advise the
other parties, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective, the issuance of any stop order, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Mergers for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement/Prospectus or the
Registration Statement. If, at any time prior to the Effective Time, any
information relating to Frontier or Xxxxx, or any of their respective
affiliates, officers or directors, is discovered by Frontier or Xxxxx and such
information should be set forth in an amendment or supplement to any of the
Registration Statement or the Proxy Statement/Prospectus so that any of such
documents would not include any misstatement of a
52
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party hereto discovering such information shall promptly
notify the other parties and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and disseminated to the stockholders of
Frontier and Xxxxx.
SECTION 5.9 LISTING APPLICATION. Parent shall use its reasonable best
efforts to cause the Parent Common Stock to be issued in the Mergers to be
approved for listing on the NYSE prior to the Effective Time, subject to
official notice of issuance. Parent shall promptly prepare and submit to the
NYSE a listing application covering the shares of Parent Common Stock issuable
in the Mergers and shares issuable pursuant to Parent Stock Options.
SECTION 5.10 AGREEMENTS OF RULE 145 AFFILIATES. (a) Prior to the
Effective Time, Xxxxx shall cause to be prepared and delivered to Parent and
Frontier a list identifying all persons who, at the time of the meeting of
Holly's stockholders pursuant to Section 5.4, Xxxxx believes may be deemed to be
"affiliates" of Xxxxx, as that term is used in paragraphs (c) and (d) of Rule
145 under the Securities Act (the "Xxxxx Rule 145 Affiliates"). Xxxxx shall use
its reasonable best efforts to cause each person who is identified as a Xxxxx
Rule 145 Affiliate in such list to execute and deliver to Parent, at or prior to
the Effective Time, a written agreement in substantially the form attached
hereto as Exhibit E (a "Xxxxx Rule 145 Agreement"). As an inducement to such
Xxxxx Rule 145 Agreements, Parent shall enter into a written registration rights
agreement with such Xxxxx Rule 145 Affiliates in substantially the form attached
hereto as Exhibit F (the "Registration Rights Agreement").
(b) Prior to the Effective Time, Frontier shall cause to be prepared
and delivered to Parent and Xxxxx a list identifying all persons who, at the
time of the meeting of Frontier's stockholders pursuant to Section 5.4, Frontier
believes may be deemed to be "affiliates" of Frontier, as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act (the "Frontier Rule
145 Affiliates"). Parent shall be entitled to place restrictive legends on any
shares of Parent Common Stock received by such Frontier Rule 145 Affiliates.
Frontier shall use its reasonable best efforts to cause each person who is
identified as a Frontier Rule 145 Affiliate in such list to execute and deliver
to Parent, at or prior to the Effective Time, a written agreement in
substantially the form attached hereto as Exhibit G (a "Frontier Rule 145
Agreement," the Xxxxx Rule 145 Agreements and the Frontier Rule 145 Agreements
each a "Rule 145 Agreement" and collectively the "Rule 145 Agreements"). As an
inducement to such Frontier Rule 145 Agreements, Parent shall enter into the
Registration Rights Agreement with such Frontier Rule 145 Affiliates.
SECTION 5.11 EXPENSES. Whether or not the Mergers are consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except (a) that Frontier and Xxxxx shall each pay and bear one-half of
each regulatory filing, notification, registration or similar fee required to be
paid by any party in connection with this Agreement and the transactions
contemplated hereby under the HSR Act, the Securities Act, the Exchange Act and
other applicable laws, rules and regulations of any governmental authority and
(b) as expressly provided in Section 7.5.
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SECTION 5.12 INDEMNIFICATION AND INSURANCE.
(a) From and after the Effective Time, Parent shall as provided in this
Section 5.12 cause each of Frontier Surviving Corporation and Xxxxx Surviving
Corporation to indemnify, defend and hold harmless to the fullest extent
permitted under applicable law each person who is immediately prior to the
Effective Time, or has been at any time prior to the Effective Time, an officer
or director of Frontier or Xxxxx, respectively (or any Subsidiary or division
thereof), and each person who immediately prior to the Effective Time is serving
or prior to the Effective Time has served at the request of Frontier or Xxxxx,
respectively, as a director, officer, trustee or fiduciary of another
corporation, partnership, joint venture, trust, pension or other employee
benefit plan or enterprise (individually, an "Indemnified Party" and,
collectively, the "Indemnified Parties") against all losses, claims, damages,
liabilities, costs or expenses (including attorneys' fees), judgments, fines,
penalties and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation arising out of or pertaining to acts or
omissions, or alleged acts or omissions, by them in their capacities as such,
whether commenced, asserted or claimed before or after the Effective Time, to
the fullest extent such indemnification by Frontier Surviving Corporation or
Xxxxx Surviving Corporation, as applicable, is permitted under applicable law.
In the event of any such claim, action, suit, proceeding or investigation (an
"Action"), (i) Parent shall cause each of Frontier Surviving Corporation and
Xxxxx Surviving Corporation, as applicable, to pay, as incurred, the fees and
expenses of counsel selected by the Indemnified Party, which counsel shall be
reasonably acceptable to Parent, in advance of the final disposition of any such
Action to the fullest extent permitted by applicable law, and, if required, upon
receipt of any undertaking required by applicable law, and (ii) Parent will, and
will cause each of Frontier Surviving Corporation and Xxxxx Surviving
Corporation, as applicable, to, cooperate in the defense of any such matter;
provided, however, none of Parent, Frontier Surviving Corporation or Xxxxx
Surviving Corporation shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld or delayed),
and provided further that none of Parent, Frontier Surviving Corporation or
Xxxxx Surviving Corporation shall be obligated pursuant to this Section 5.12(a)
to pay the fees and disbursements of more than one counsel, except for one local
counsel, for all Indemnified Parties in any single Action, unless, in the good
faith judgment of any of the Indemnified Parties, there is or may be a conflict
of interests between two or more of such Indemnified Parties, in which case
there may be separate counsel for each similarly situated group. With respect to
any determination of whether an Indemnified Party is entitled to indemnification
by Xxxxx Surviving Corporation or Frontier Surviving Corporation under this
Section 5.12, the Indemnified Party shall have the right, as contemplated by the
DGCL, to require that such determination be made by special, independent legal
counsel selected by the Indemnified Party and approved by Xxxxx Surviving
Corporation or Frontier Surviving Corporation, as applicable (which approval
shall not be unreasonably withheld), and who has not otherwise performed
material services for Frontier, Xxxxx or the Indemnified Party within the last
three (3) years.
(b) The rights to indemnification hereunder, including provisions
relating to advances of expenses incurred in defense of any action or suit, in
the certificate of incorporation or articles of incorporation, bylaws and any
indemnification agreement of Frontier, Xxxxx and their respective Subsidiaries
with respect to matters occurring through the Effective Time, shall survive the
Mergers and shall continue in full force and effect.
54
(c) For a period of six years after the Effective Time, Parent shall,
or shall cause each of Frontier Surviving Corporation and Xxxxx Surviving
Corporation to, maintain officers' and directors' liability insurance covering
the Indemnified Parties who are or at any time prior to the Effective Time were
covered by their respective officers' and directors' liability insurance ("D&O
Insurance") policies on terms substantially no less advantageous to the
Indemnified Parties than such existing insurance with respect to acts or
omissions, or alleged acts or omissions, prior to the Effective Time (whether
claims, actions or other proceedings relating thereto are commenced, asserted or
claimed before or after the Effective Time); provided that, after the Effective
Time, neither Frontier Surviving Corporation nor Xxxxx Surviving Corporation
shall be required to pay annual premiums in excess of 250% of the annual premium
amount payable by Frontier or Xxxxx, as applicable, for the policy year
including the date hereof (the amount of which premiums are set forth in
Schedule 5.12(c) of the respective Disclosure Letters), but in such case shall
purchase as much coverage as reasonably practicable for such amount. Parent
shall have the right to cause coverage to be extended under the D&O Insurance of
Frontier or Xxxxx by obtaining a six-year "tail" policy on terms and conditions
substantially no less advantageous than Frontier's or Holly's respective
existing D&O Insurance, and such "tail" policy shall satisfy the provisions of
this Section 5.12(c).
(d) The rights of each Indemnified Party hereunder shall be in addition
to any other rights such Indemnified Party may have under the certificate of
incorporation, articles of incorporation or bylaws of Frontier or Xxxxx, as
applicable, or any of their respective Subsidiaries, under the DGCL or WBCA, or
otherwise. The provisions of this Section 5.12 shall survive the consummation of
the Mergers, are expressly intended to benefit each of the Indemnified Parties,
and may not be amended or terminated after the Effective Time in a manner
contrary to the interest of an Indemnified Party without the consent of such
Indemnified Party.
(e) Notwithstanding any other provisions hereof, the obligations of
Frontier, Xxxxx, Frontier Surviving Corporation, Xxxxx Surviving Corporation and
Parent contained in this Section 5.12 shall be binding upon the successors and
assigns of Parent, Frontier Surviving Corporation and Xxxxx Surviving
Corporation. In the event Frontier, Xxxxx, Frontier Surviving Corporation, Xxxxx
Surviving Corporation or Parent or any of their respective successors or assigns
(i) consolidates with or merges into any other person or (ii) transfers all or
substantially all of its properties and assets to any person, then and in each
such case, proper provision shall be made so that the successors and assigns of
Frontier, Xxxxx, Frontier Surviving Corporation, Xxxxx Surviving Corporation or
Parent, as the case may be, shall assume and honor the obligations set forth in
this Section 5.12.
SECTION 5.13 EMPLOYEE BENEFITS.
(a) After the Effective Time, Frontier and Xxxxx shall cause Parent to
honor, and to cause its Subsidiaries to honor, (i) all employee benefit plans,
contracts, agreements and commitments of Frontier, Xxxxx or any of their
respective Subsidiaries maintained or entered into by Frontier, Xxxxx or any of
their respective Subsidiaries prior to the date hereof that apply to any current
or former employee or current or former director of Frontier, Xxxxx or any of
their respective Subsidiaries, as applicable and (ii) such severance agreements
and indemnification agreements as Xxxxx may enter into with its officers and
directors in accordance with this Agreement; provided, however, that, except as
otherwise expressly provided in this Section 5.13,
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Parent reserves the right to modify, and to cause any of its Subsidiaries to
modify, any such plan, contract, agreement or commitment in accordance with its
terms.
(b) Notwithstanding the provisions of Section 5.13(a):
(i) Except as provided in Sections 2.5, 2.6 and 5.1
(pertaining to Xxxxx Stock Plans and Frontier Stock Plans), Frontier
and Xxxxx agree that for the period beginning at the Effective Time and
ending December 31, 2003 (or such later date as may be determined by
Parent), (A) Xxxxx Surviving Corporation shall assume and maintain all
Xxxxx Plans as in effect immediately prior to the Effective Time, and
shall not amend any such plan to reduce any benefit provided under any
such plan; and (B) Frontier Surviving Corporation shall assume and
maintain all Frontier Plans as in effect immediately prior to the
Effective Time, and shall not amend any such plan to reduce any benefit
provided under any such plan. With respect to any Xxxxx Plan or
Frontier Plan that is a qualified defined contribution plan providing
for discretionary employer contributions, such contributions for 2003
shall be made at approximately the same percentage of compensation (or
employee or salary deferral contribution in the case of a discretionary
matching contribution) of eligible participants as was made to such
plan for 2002. Notwithstanding the foregoing, contributions may be
adjusted to the extent necessary to comply with applicable law and
regulations.
(ii) Each employee of Frontier, Xxxxx or any of their
respective Subsidiaries (and any successor entities to Frontier, Xxxxx
or any of their respective Subsidiaries) who becomes an employee of
Parent, Frontier Surviving Corporation, Xxxxx Surviving Corporation, or
any of their respective Subsidiaries as of the Effective Time without
any gap in employment shall be credited with service with Frontier,
Xxxxx, any of their respective Subsidiaries, or any of their
predecessors, for purposes of eligibility, vesting and benefit
determination under any employee benefit plan or policy of Parent,
Frontier Surviving Corporation or Xxxxx Surviving Corporation.
Notwithstanding the foregoing, this Section 5.13(b)(ii) shall not apply
to the determination of accrual service under any defined benefit
pension plan as defined in Section 3(35) of ERISA (regardless of
whether such plan is qualified under Code Section 401(a)) that did not
cover the employee immediately prior to the Effective Time, and shall
not apply to the determination of the right to receive, or the amount
of, any retiree or other post-retirement medical service (except for
COBRA medical continuation coverage as described in Section 4980B of
the Code or any arrangement covering the employee prior to the
Effective Time).
(iii) Nothing in this Section 5.13(b) shall be construed to
restrict the ability of any entity to modify or terminate any plan (at
or after the Effective Time) with respect to persons employed at
operations outside the United States.
(iv) Nothing in this Section 5.13(b) shall be construed as a
contract of employment, and this Section 5.13(b) shall not give any
employee the right to be retained in the employ of any entity. Nothing
in this Section 5.13(b) shall be construed to require the provision of
coverage or benefits to an employee following termination of employment
except to the extent such coverage or benefits is otherwise required
pursuant to the terms of the applicable plan or arrangement or by
applicable law.
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(v) The parties intend and agree that the employees of any
party on the Closing Date are third party beneficiaries with respect to
the provisions of Section 5.13(b)(i) and (ii) that are applicable to
such employee and shall be entitled to enforce such provisions against
the parties.
(c) Prior to the Effective Time, the parties shall cause Parent's Board
of Directors, or a duly authorized committee of "non-employee" directors
thereof: (i) to approve and adopt a Parent Stock Plan for the purposes described
in Sections 2.5 and 2.6 of this Agreement; (ii) to submit such Parent Stock Plan
to the then stockholders of Parent (Frontier and Xxxxx) for approval; and (iii)
to authorize the conversion of Xxxxx Stock Options and Frontier Stock Options
into Parent Stock Options (and the acquisition of shares of Parent Common Stock
thereunder) at the Effective Time by officers and directors of Frontier and
Xxxxx (including officers and directors of Frontier and Xxxxx who become, prior
to, at, or following the Effective Time of the Mergers, officers or directors of
Parent) as a result of the conversion of shares of Frontier and Xxxxx Common
Stock in the Mergers by Parent at the Effective Time. Such resolution shall set
forth the name of the applicable "insiders" for purposes of Section 16 of the
Exchange Act, the number of securities to be acquired by each individual, and
that the approval is being granted to exempt the transaction under Rule 16b-3 of
the Exchange Act. Frontier and Xxxxx agree to vote their respective shares of
Parent to approve such Parent Stock Plan. The parties shall cause Parent to
reserve for issuance a number of shares of Parent Common Stock at least equal to
the number of shares of Parent Common Stock that will be subject to Parent Stock
Options as a result of the actions contemplated by Section 2.5 and Section 2.6.
As soon as practicable following the Effective Time, Parent shall file a
registration statement on Form S-8 (or any successor form, or if Form S-8 is not
available, other appropriate forms) with respect to the shares of Parent Common
Stock subject to such Parent Stock Options and shall maintain the effectiveness
of such registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such Parent Stock Options remain outstanding.
(d) (i) Xxxxx may make additional arrangements after the date hereof to
provide, to employees it selects, severance payments (the "Severance Payments")
in the case of any termination of any of such employees either prior to the
Closing Date in contemplation of the transaction contemplated in this Agreement
or following the Closing Date and a consulting agreement with Xxxxxxx X. Xxxxxxx
(the "Consulting Agreement"). The total value of the Severance Payments and
Consulting Agreement, including the value of (A) cash paid, (B) property or
assets transferred, (C) employee benefits provided, and (D) acceleration of any
right or payment accelerated shall not exceed $5,000,000 in the aggregate;
provided, however, that the agreements evidencing any Severance Payments and
Consulting Agreement (the "Severance Agreements") or the Consulting Agreement
shall provide that if any payment made in connection with such Severance
Agreements would constitute an excess parachute payment, the employee shall
waive his or her right to receive any Severance Payment or payment under the
Consulting Agreement, as applicable, to the extent that such amount, when added
to any other parachute payments received in connection with the transaction
contemplated in this Agreement, would exceed 2.99 times his or her base amount.
For purposes of this subsection, "excess parachute payment", "parachute
payment", and "base amount" shall have the meanings set forth in section 280G of
the Code and the regulations promulgated pursuant thereto.
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(ii) Xxxxx may make additional arrangements after the date hereof to
enter into, with employees listed on Schedule 5.1(a)(vi), providing for terms of
employment, compensation and severance payments as discussed and consistent with
those applicable to employees of Frontier and its Subsidiaries in similar
positions ("Employee Agreements"). Arrangements entered into pursuant to this
subsection 5.13(d)(ii) shall be neither subject to nor counted towards the
maximum limit provided for payments made and agreements entered into pursuant to
Section 5.13(d)(i), and in no event shall any employee who has entered into an
agreement pursuant to this Section 5.13(d)(ii) be required to waive any portion
of any payment such employee is entitled to pursuant to his Employee Agreement.
(e) Any other provisions hereof to the contrary notwithstanding, the
provisions of this Section 5.13 do not cover, and shall not be deemed for the
benefit of, any employees covered by any Xxxxx Represented Employees or Frontier
Represented Employees.
(f) Frontier shall use its reasonable best efforts to cause each person
(other than those who have already done so at or prior to the date hereof and
are listed in Schedule 5.13(f) of the Frontier Disclosure Letter, which Schedule
5.13(f) includes the number of Frontier Stock Options subject to each such
waiver), whose unvested Frontier Stock Options and/or unvested restricted shares
of Frontier Common Stock would otherwise become vested at the time of initial
filing of the Registration Statement pursuant to Section 5.8 to execute and
deliver to Frontier, prior to the time of such initial filing of the
Registration Statement, a written agreement waiving such accelerated vesting as
a result of such initial filing and as a result of this Agreement, consummation
of the Mergers and/or consummation of the other transactions contemplated by
this Agreement.
SECTION 5.14 TAX QUALIFICATION.
(a) Xxxxx shall use its reasonable best efforts to, and to cause each
of its Subsidiaries to, (i) cause the Xxxxx Merger to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code and/or the
Mergers, taken together, to qualify as an exchange described in Section 351 of
the Code and (ii) obtain the opinion of counsel referred to in Section 6.2(b),
including the execution of the officers' certificates referred to therein and in
Section 6.3(b). Xxxxx shall use its reasonable best efforts not to, and shall
use its reasonable best efforts not to permit any of its Subsidiaries to, take
any action (including any action otherwise permitted by Section 5.1(a)) that
would prevent or impede the Xxxxx Merger or the Frontier Merger from qualifying
as a "reorganization" within the meaning of Section 368(a) of the Code and/or
the Mergers, taken together, from qualifying as an exchange described in Section
351 of the Code.
(b) Frontier shall use its reasonable best efforts to, and to cause
each of its Subsidiaries to, (i) cause the Frontier Merger to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code and/or the
Mergers, taken together, to qualify as an exchange described in Section 351 of
the Code and (ii) obtain the opinion of counsel referred to in Section 6.3(b),
including the execution of the officers' certificates referred to therein and in
Section 6.2(b). Frontier shall use its reasonable best efforts not to, and shall
use its reasonable best efforts not to permit any of its Subsidiaries to, take
any action (including any action otherwise permitted by Section 5.1(b)) that
would prevent or impede the Xxxxx Merger or the Frontier Merger from qualifying
as a "reorganization" within the meaning of Section 368(a) of the Code
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and/or the Mergers, taken together, from qualifying as an exchange described in
Section 351 of the Code.
SECTION 5.15 DIVIDENDS. Xxxxx shall coordinate with Frontier respecting
the declaration, setting of record dates and payment dates of dividends on the
shares of Xxxxx Common Stock so that holders of shares of Xxxxx Common Stock do
not receive dividends on both shares of Xxxxx Common Stock and Parent Common
Stock received in the Xxxxx Merger in respect of any calendar quarter or fail to
receive a dividend on shares of Xxxxx Common Stock or Parent Common Stock
received in the Xxxxx Merger in respect of any calendar quarter.
SECTION 5.16 GOVERNANCE MATTERS; HEADQUARTERS; COMPANY NAME.
(a) Frontier and Xxxxx shall take all requisite action, effective as of
the Effective Time, (i) to cause the size of the Board of Directors of Parent
(the "Parent Board") to be twelve directors and (ii) to cause the directors on
the Parent Board to be comprised of (x) six directors chosen by the current
Frontier directors, of whom only Xxxxx X. Xxxxx shall not be independent, for
purposes of the proposed rules of the NYSE (as the same may be modified and/or
become effective prior to the Effective Time) (the "Frontier Designees"), and
(y) six directors chosen by the current Xxxxx directors, of whom only C. Xxxxx
Xxxxxxxxxx, III shall not be independent, for purposes of the proposed rules of
the NYSE (as the same may be modified and/or become effective prior to the
Effective Time) (the "Xxxxx Designees"), each to serve for a term expiring on
the earlier of his or her death, resignation or removal or the next annual
meeting of shareholders and, despite the expiration of his or her term, until
his or her successor has been elected and qualified or there is a decrease in
the number of directors. If at any time prior to the Effective Time, any such
board designee becomes unable or unwilling to serve as a director of Parent at
the Effective Time, then the party that designated such individual shall
designate another individual to serve in such individual's place.
(b) Frontier and Xxxxx shall take all requisite action, effective as of
the Effective time, to cause each then standing committee of the Parent Board to
be comprised of equal numbers of Frontier Designees and Xxxxx Designees. If at
any time prior to the Effective Time, any such committee designee becomes unable
or unwilling to serve as a director of Parent at the Effective Time, then the
party that designated such individual as a board designee shall designate
another individual to serve in such individual's place on the applicable
committee(s).
(c) Frontier and Xxxxx shall take all requisite action, effective as of
the Effective Time, to cause the executive officers of Parent to include: C.
Xxxxx Xxxxxxxxxx, III, Chairman of the Board; Xxxxx X. Xxxxx, President and
Chief Executive Officer; and Xxxxx Xxxxxxx, Chief Financial Officer. If at any
time prior to the Effective Time, either of the individuals designated to serve
as the Chairman of the Board of Parent and the President and Chief Executive
Officer of Parent becomes unable or unwilling to serve in such capacity at the
Effective Time, then the other of such individual shall serve as the Chairman of
the Board, President and Chief Executive Officer of Parent. If at any time prior
to the Effective Time, both of such individuals designated to serve as the
Chairman of the Board of Parent and the President and Chief Executive Officer of
Parent, or the individual designated as Chief Financial Officer, in this Section
5.16(c) should
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become unable or unwilling to serve in his or her designated capacity at the
Effective Time, then Frontier and Xxxxx shall mutually agree on another
individual to serve in such capacity.
(d) The executive headquarters for Parent shall be located in the
Houston, Texas area.
(e) Immediately upon consummation of the Mergers, Parent shall change
its name to Frontier Oil Corporation.
SECTION 5.17 NO CONTROL OF OTHER PARTY'S BUSINESS. Nothing contained in
this Agreement shall give Xxxxx, directly or indirectly, the right to control or
direct Frontier's operations or give Frontier, directly or indirectly, the right
to control or direct Holly's operations prior to the Effective Time. Prior to
the Effective Time, each of Frontier and Xxxxx shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision
over its respective operations.
SECTION 5.18 TOTAL XXXXX COMMON STOCK NUMBER CERTIFICATE. Xxxxx shall
deliver to Frontier at the Closing a certificate executed by its Chairman of the
Board and Chief Executive Officer or by its Chief Financial Officer (the "Total
Xxxxx Common Stock Number Certificate") setting forth, and showing in reasonable
detail the calculation of: (a) the "Total Xxxxx Common Stock Number", which
shall equal the total number of shares of Xxxxx Common Stock that are issued and
outstanding immediately prior to the Effective Time (but not including any
Excluded Xxxxx Shares); and (b) the total number of shares of Xxxxx Common Stock
that are issuable pursuant to options, warrants, calls, subscriptions,
stockholder rights plans or similar instruments, convertible securities, or
other rights, agreements or commitments which obligate Xxxxx or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
securities of Xxxxx or any of its Subsidiaries. For the avoidance of doubt, the
Total Xxxxx Common Stock Number shall not be affected by the number of Xxxxx
Dissenting Shares, if any.
SECTION 5.19 CONTINGENT VALUE RIGHTS AGREEMENT. As promptly as
reasonably practicable following the date hereof, and prior to the filing of the
Registration Statement pursuant to Section 5.8, Parent, Frontier and Xxxxx shall
enter into a Contingent Value Rights Agreement (the "CVR Agreement") by and
among Parent, Frontier, Xxxxx and the one or more persons hereafter designated
by Xxxxx in the CVR Agreement (the "Representatives"), which CVR Agreement shall
provide, among other terms and conditions, (i) that the Representatives shall be
empowered, subject to any limitations imposed by the Assignment of Claims Act,
to approve the terms and conditions of any settlement of the Jet Fuel Claims
proposed by Parent (provided the Representatives shall have no such approval
right from and after the first date on which the Claims Expenses equal or exceed
$2,500,000 (the "Costs Threshold Date")), (ii) that Parent shall cause the Xxxxx
Subsidiaries to prosecute the Jet Fuel Claims in good faith (it being
understood, however, that Parent shall be entitled to settle the Jet Fuel
Claims, without any approval from the Representatives or any holder of CVRs, at
any time from and after the Costs Threshold Date), (iii) that the Board of
Directors of Parent shall approve any settlement of the Jet Fuel Claims, (iv)
for the reasonable compensation of the Representatives by Parent for their
service as such, (v) that Parent shall indemnify the Representatives from and
against any loss, liability or expense incurred by them arising out of or in
connection with their service as Representatives, (vi) for a procedure to value
any in-kind Recovery and for the payment to the holders of CVRs of such value in
cash, (vii) that CVRs
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shall be nontransferable, except upon death or by operation of law, (viii) for
the appointment of successors to the Representatives if the Representatives
resign or become unable to carry out their obligations and duties under the CVR
Agreement, (ix) that the consent of the holders of a majority of the CVRs shall
be necessary to amend the CVR Agreement or the CVRs after the Effective Time in
any manner adverse to the holders of CVRs, (x) that the amount of the Recovery
shall also be reduced by any offsets or other claims recovered by the United
States against the Xxxxx Subsidiaries arising directly under the contracts that
gave rise to the Jet Fuel Claims, but shall not be reduced for any other offsets
or other claims by the United States against the Xxxxx Subsidiaries or their
affiliates, and (xi) that Parent shall provide each holder of a Parent Stock
Option who was a holder of a Xxxxx Stock Option immediately prior to the
Effective Time with written notice of the payment of any amount to the holders
of CVRs not less than ten days prior to the date that any such payment is made.
ARTICLE 6
CONDITIONS
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGERS. The respective obligations of each party to effect the Mergers shall be
subject to the fulfillment or waiver in writing by mutual agreement of the
parties at or prior to the Closing Date of the following conditions:
(a) (i) The Xxxxx Requisite Vote shall have been obtained and (ii) the
Frontier Requisite Vote shall have been obtained.
(b) (i) The waiting period (and any extension thereof) applicable to
the consummation of the Mergers shall have expired or been terminated under the
HSR Act, and (ii) any mandatory waiting period or required consent under any
other applicable United States federal or state competition or antitrust law or
regulation shall have expired or been obtained except where the failure to
observe such waiting period or obtain a consent referred to in this clause (ii)
would not reasonably be expected to delay or prevent the consummation of either
or both Mergers or have a material adverse effect on the expected benefits of
the transactions contemplated by this Agreement to Parent.
(c) None of the parties hereto shall be subject to any decree, order or
injunction of a United States federal or state court of competent jurisdiction,
which prohibits the consummation of either or both Mergers, and no statute, rule
or regulation shall have been enacted by any governmental authority which
prohibits or makes unlawful the consummation of either or both Mergers.
(d) The Registration Statement shall have become effective and no stop
order with respect thereto shall be in effect and no proceedings for that
purpose shall have been commenced or threatened by the SEC.
(e) The shares of Parent Common Stock to be issued pursuant to the
Mergers and the shares of Parent Common Stock reserved for issuance pursuant to
Parent Stock Options shall have been authorized for listing on the NYSE, subject
to official notice of issuance.
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SECTION 6.2 CONDITIONS TO OBLIGATION OF HOLLY TO EFFECT THE MERGERS.
The obligation of Holly to effect the Mergers shall be subject to the
fulfillment or waiver in writing by Holly at or prior to the Closing Date of the
following conditions:
(a) Frontier shall have performed in all material respects its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date and the representations and warranties of Frontier
contained in this Agreement and in any document delivered in connection herewith
(i) to the extent qualified by Frontier Material Adverse Effect or any other
materiality qualification shall be true and correct and (ii) to the extent not
qualified by Frontier Material Adverse Effect or any other materiality
qualification shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing Date (except for
representations and warranties made as of a specified date, which need be true
and correct only as of the specified date), and Holly shall have received a
certificate of Frontier, executed on its behalf by its Chairman of the Board,
President and Chief Executive Officer, dated the Closing Date, certifying to
such effect.
(b) Holly shall have received the opinion of Vinson & Elkins L.L.P. or
other nationally recognized tax counsel, acting as counsel to Holly, in form and
substance reasonably satisfactory to Holly, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated the Closing
Date, a copy of which shall be furnished to Frontier, to the effect that (i) the
Holly Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and/or the Mergers, taken
together, will constitute an exchange described in Section 351 of the Code, (ii)
no gain or loss will be recognized by Holly, and no gain or loss will be
recognized by the stockholders of Holly as a result of the exchange of Holly
Common Stock for shares of Parent Common Stock pursuant to the Holly Merger,
except that gain, if any, will be recognized on the receipt of cash
consideration in the Holly Merger, the receipt of cash in lieu of Parent Common
Stock and the receipt of CVRs and/or payments thereon. In rendering such
opinion, such counsel shall be entitled to receive and rely upon customary
representations of officers of Parent, Holly, Merger Sub Two, Frontier and
Merger Sub One as to such matters as such counsel may reasonably request.
SECTION 6.3 CONDITIONS TO OBLIGATION OF FRONTIER TO EFFECT THE MERGERS.
The obligations of Frontier to effect the Mergers shall be subject to the
fulfillment or waiver in writing by Frontier at or prior to the Closing Date of
the following conditions:
(a) Holly shall have performed in all material respects its covenants
and agreements contained in this Agreement required to be performed on or prior
to the Closing Date and the representations and warranties of Holly contained in
this Agreement and in any document delivered in connection herewith (i) to the
extent qualified by Holly Material Adverse Effect or any other materiality
qualification shall be true and correct and (ii) to the extent not qualified by
Holly Material Adverse Effect or any other materiality qualification shall be
true and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date (except for representations and warranties
made as of a specified date, which need be true and correct only as of the
specified date), and Frontier shall have received a certificate of Holly,
executed on its behalf by the Chairman of the Board and Chief Executive Officer
of Holly, dated the Closing Date, certifying to such effect.
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(b) Frontier shall have received the opinion of Andrews & Kurth L.L.P.
or other nationally recognized tax counsel, acting as counsel to Frontier, in
form and substance reasonably satisfactory to Frontier, on the basis of certain
facts, representations and assumptions set forth in such opinion, dated the
Closing Date, a copy of which will be furnished to Holly, to the effect that (i)
the Frontier Merger will be treated for federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Code and/or the
Mergers, taken together, will constitute an exchange described in Section 351 of
the Code and (ii) no gain or loss will be recognized by Frontier or the
stockholders of Frontier to the extent they receive Parent Common Stock in
exchange for Frontier Common Stock pursuant to the Frontier Merger. In rendering
such opinion, such counsel shall be entitled to receive and rely upon
representations of officers of Parent, Frontier, Merger Sub One, Holly and
Merger Sub Two as to such matters as such counsel may reasonably request.
(c) Frontier shall have received the Total Holly Common Stock Number
Certificate pursuant to Section 5.18.
(d) Holly shall have completed the acquisition of the Woods Cross
refinery from ConocoPhillips pursuant to, and on substantially the terms and
conditions set forth in, the relevant purchase agreement, as amended, contained
in the Holly Reports.
ARTICLE 7
TERMINATION
SECTION 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the Effective Time by the mutual written
agreement of Holly and Frontier approved by action of their respective Boards of
Directors in their respective discretion for any reason, including due to the
number of Holly Dissenting Shares exceeding 5% of the Total Holly Common Stock
Number or the number of Frontier Dissenting Shares exceeding 5% of the total
number of shares of Frontier Common Stock outstanding immediately prior to the
Effective Time.
SECTION 7.2 TERMINATION BY FRONTIER OR HOLLY. At any time prior to the
Effective Time, this Agreement may be terminated by Holly or Frontier, in either
case by action of its Board of Directors, if:
(a) the Mergers shall not have been consummated by October 31, 2003;
provided, however, that the right to terminate this Agreement pursuant to this
clause (a) shall not be available to any party whose failure or whose
affiliates' failure to perform or observe in any material respect any of its
obligations under this Agreement in any manner shall have been the principal
cause of, or resulted in, the failure of the Mergers to occur on or before such
date; or
(b) the Holly Requisite Vote shall not have been obtained at a meeting
(including adjournments and postponements) of Holly's stockholders that shall
have been duly convened for the purpose of obtaining the Holly Requisite Vote;
or
(c) the Frontier Requisite Vote shall not have been obtained at a
meeting (including adjournments and postponements) of Frontier's stockholders
that shall have been duly convened for the purpose of obtaining the Frontier
Requisite Vote; or
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(d) a United States federal or state court of competent jurisdiction or
United States federal or state governmental, regulatory or administrative agency
or commission shall have issued an order, decree or ruling or taken any other
action (including the enactment of any statute, rule, regulation, decree or
executive order) permanently restraining, enjoining or otherwise prohibiting
either or both Mergers and such order, decree, ruling or other action (including
the enactment of any statute, rule, regulation, decree or executive order) shall
have become final and non-appealable; provided, however, that the party seeking
to terminate this Agreement pursuant to this clause (d) shall have complied with
Section 5.5 and with respect to other matters not covered by Section 5.5 shall
have used its reasonable best efforts to remove such injunction, order or
decree.
SECTION 7.3 TERMINATION BY HOLLY. At any time prior to the Effective
Time, this Agreement may be terminated by Holly, by action of its Board of
Directors, if:
(a) (i) there has been a breach by Frontier of any representation,
warranty, covenant or agreement set forth in this Agreement or if any
representation or warranty of Frontier shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) would not be satisfied and
(ii) such breach is not curable, or, if curable, is not cured within 30 days
after written notice of such breach is given to Frontier by Holly; provided,
however, that the right to terminate this Agreement pursuant to this Section
7.3(a) shall not be available to Holly if it, at such time, is in material
breach of any representation, warranty, covenant or agreement set forth in this
Agreement such that the conditions set forth in Section 6.3(a) shall not be
satisfied;
(b) prior to obtaining the Frontier Requisite Vote, the Board of
Directors of Frontier shall have withdrawn, modified, withheld or changed, in a
manner adverse to Holly, such Board's approval or recommendation of this
Agreement or the transactions contemplated hereby, or recommended a Frontier
Superior Proposal, or resolved to do any of the foregoing; or
(c) prior to obtaining the Holly Requisite Vote, Holly is the
Withdrawing Party pursuant to Section 5.4(b) (it being understood that Holly
shall not have the right to terminate this Agreement pursuant to this Section
7.3(c) unless and until Holly shall have paid Frontier all amounts due under
Section 7.5(a)).
SECTION 7.4 TERMINATION BY FRONTIER. At any time prior to the Effective
Time, this Agreement may be terminated by Frontier, by action of its Board of
Directors, if:
(a) (i) there has been a breach by Holly of any representation,
warranty covenant or agreement set forth in this Agreement or if any
representation or warranty of Holly shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) would not be satisfied and
(ii) such breach is not curable, or, if curable, is not cured within 30 days
after written notice of such breach is given by Frontier to Holly; provided,
however, that the right to terminate this Agreement pursuant to this Section
7.4(a) shall not be available to Frontier if it, at such time, is in material
breach of any representation, warranty, covenant or agreement set forth in this
Agreement such that the conditions set forth in Section 6.2(a) shall not be
satisfied;
(b) prior to obtaining the Holly Requisite Vote, the Board of Directors
of Holly shall have withdrawn, modified, withheld or changed, in a manner
adverse to Frontier, such Board's
64
approval or recommendation of this Agreement or the transactions contemplated
hereby, or recommended a Holly Superior Proposal, or resolved to do any of the
foregoing; or
(c) prior to obtaining the Frontier Requisite Vote, Frontier is the
Withdrawing Party pursuant to Section 5.4(b) (it being understood that Frontier
shall not have the right to terminate this Agreement pursuant to this Section
7.4(c) unless and until Frontier shall have paid Holly all amounts due under
Section 7.5(b)).
SECTION 7.5 EFFECT OF TERMINATION.
(a) If this Agreement is terminated
(i) by Holly or Frontier, after the public announcement (made
prior to the closing of the polls for the vote of Holly stockholders
for the purpose of obtaining the Holly Requisite Vote) of a Holly
Acquisition Proposal, pursuant to Section 7.2(b);
(ii) by Frontier pursuant to Section 7.4(b); or
(iii) by Holly pursuant to Section 7.3(c);
then Holly shall pay Frontier the Holly Termination Amount (as defined below)
and, in addition, reimburse Frontier for all expenses incurred by Frontier in
connection with this Agreement up to the Reimbursement Maximum Amount (as
defined below) prior to or upon termination of this Agreement. All payments
under this Section 7.5(a) shall be made in cash by wire transfer to an account
designated by Frontier at the time of such termination (or, in the case of a
termination pursuant to Section 7.3(c), prior to such termination). The term
"Holly Termination Amount" shall mean $15,000,000. The term "Reimbursement
Maximum Amount" shall mean $1,000,000. In addition, Holly shall reimburse
Frontier for all expenses incurred by Frontier in connection with this Agreement
up to the Reimbursement Maximum Amount if this Agreement has been terminated
pursuant to Section 7.2(b) even if Frontier is not entitled to any Holly
Termination Amount under this Section 7.5(a). Holly acknowledges that the
agreements contained in this Section 7.5(a) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Frontier would not enter into this Agreement; accordingly, if Holly fails
promptly to pay any amount due pursuant to this Section 7.5(a), and, in order to
obtain such payment, Frontier commences a suit which results in a judgment
against Holly for the payment set forth in this Section 7.5(a), Holly shall pay
to Frontier its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest on the Holly Termination Amount and other
amounts to be reimbursed to Frontier under this Section 7.5(a) from the date
payment was required to be made until the date of such payment at the prime rate
of Union Bank of California, N.A. in effect on the date such payment was
required to be made plus one percent (1%). If this Agreement is terminated
pursuant to a provision that calls for a payment to be made under this Section
7.5(a), it shall not be a defense to Holly's obligation to pay hereunder that
this Agreement could have been terminated under a different provision or could
have been terminated at an earlier or later time.
65
(b) If this Agreement is terminated
(i) by Holly or Frontier, after the public announcement (made
prior to the closing of the polls for the vote of Frontier Stockholders
for the purpose of obtaining the Frontier Requisite Vote) of a Frontier
Acquisition Proposal, pursuant to Section 7.2(c);
(ii) by Holly pursuant to Section 7.3(b); or
(iii) by Frontier pursuant to Section 7.4(c);
then Frontier shall pay Holly the Frontier Termination Amount (as defined below)
and, in addition, reimburse Holly for all expenses incurred by Holly in
connection with this Agreement up to the Reimbursement Maximum Amount prior to
or upon the termination of this Agreement. All payments under this Section
7.5(b) shall be made in cash by wire transfer to an account designated by Holly
at the time of such termination (or, in the case of a termination pursuant to
Section 7.4(c), prior to such termination). The term "Frontier Termination
Amount" shall mean $15,000,000. In addition, Frontier shall reimburse Holly for
all expenses incurred by Holly in connection with this Agreement up to the
Reimbursement Maximum Amount if this Agreement has been terminated pursuant to
Section 7.2(c) even if Holly is not entitled to any Frontier Termination Amount
under this Section 7.5(b). Frontier acknowledges that the agreements contained
in this Section 7.5(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Holly would not enter into
this Agreement; accordingly, if Frontier fails promptly to pay any amount due
pursuant to this Section 7.5(b), and, in order to obtain such payment, Holly
commences a suit which results in a judgment against Frontier for the payment
set forth in this Section 7.5(b), Frontier shall pay to Holly its costs and
expenses (including attorneys' fees) in connection with such suit, together with
interest on the Frontier Termination Amount and other amounts to be reimbursed
to Holly under this Section 7.5(b) from the date payment was required to be made
until the date of such payment at the prime rate of Canadian Imperial Bank of
Commerce in effect on the date such payment was required to be made plus one
percent (1%). If this Agreement is terminated pursuant to a provision that calls
for a payment to be made under this Section 7.5(b), it shall not be a defense to
Frontier's obligation to pay hereunder that this Agreement could have been
terminated under a different provision or could have been terminated at an
earlier or later time.
SECTION 7.6 EFFECT OF VOTE. Any right to terminate this Agreement
provided under Section 7.1, Section 7.2(a), Section 7.2(d), Section 7.3(a) or
Section 7.4(a) hereunder shall be effective notwithstanding whether the Holly
Requisite Vote or the Frontier Requisite Vote has been obtained. Any right to
terminate this Agreement provided under Section 7.2(b) or Section 7.4(b)
hereunder shall be effective notwithstanding whether the Frontier Requisite Vote
has been obtained. Any right to terminate this Agreement provided under Section
7.2(c) or Section 7.3(b) hereunder shall be effective notwithstanding whether
the Holly Requisite Vote has been obtained.
66
ARTICLE 8
GENERAL PROVISIONS
SECTION 8.1 SURVIVAL. (a) In the event of termination of this Agreement
and the abandonment of the Mergers pursuant to Article 7, all rights and
obligations of the parties hereto shall terminate, except the obligations of the
parties pursuant to Section 5.11 and Section 7.5 and except for the provisions
of this Section 8.1, Section 8.2, Section 8.3, Section 8.4, Section 8.6, Section
8.7, Section 8.8, Section 8.9, Section 8.10, Section 8.11, Section 8.12, Section
8.13 and Section 8.16 and the Confidentiality Agreement; provided that nothing
herein shall relieve any party from any liability for any willful and material
breach by such party of any of its covenants or agreements set forth in this
Agreement and, subject to Section 8.12, all rights and remedies of such
nonbreaching party under this Agreement in the case of such a breach, at law or
in equity, shall be preserved. The parties hereto agree that, if this Agreement
has been terminated in a manner giving rise to a payment obligation under
Section 7.5, any remedy or amount payable pursuant to Section 7.5 or Section
5.11 shall be the sole and exclusive remedy of the party receiving payment
thereunder unless the other party is in material and willful breach of any of
its covenants and agreements set forth in this Agreement.
(a) None of the representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the consummation of the Mergers; provided, however, that Article 2, this
Article 8 and the agreements contained in Section 5.11 through Section 5.14
shall survive the consummation of the Mergers, unless otherwise provided herein.
SECTION 8.2 NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission or by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
(a) if to Frontier:
Frontier Oil Corporation
10000 Memorial Drive, Suite 600
Houston, Texas 77024
Facsimile: (713) 688-0616
Attn: James R. Gibbs
with a copy to:
Andrews & Kurth L.L.P.
600 Travis Street
Suite 4200
Houston, Texas 77002
Facsimile: (713) 220-4285
Attn: Robert V. Jewell
Geoffrey K. Walker
67
(b) if to Holly:
Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201
Facsimile: (214) 871-3523
Attn: General Counsel
with a copy to:
Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Facsimile: (214) 999-7857
Attn: Alan J. Bogdanow
A. Winston Oxley
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
SECTION 8.3 ASSIGNMENT; BINDING EFFECT; BENEFIT. 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 parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Except for the
provisions of Article 2 and as provided in Section 5.12 and Section 5.13,
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 any claims, rights, remedies, obligations or liabilities
under or by reason of this Agreement. Without limiting the generality of the
foregoing, no holder of shares of Holly Common Stock, Holly Stock Options or
Holly Stock-Based Awards nor any Holly employee shall have any claim, right or
remedy under or by reason of this Agreement in the event that the Mergers are
not consummated for any reason whatsoever.
SECTION 8.4 ENTIRE AGREEMENT. This Agreement (which constitutes a
"Definitive Transaction Agreement" as defined in the Confidentiality Agreement),
the Confidentiality Agreement (other than Sections 3, 7 and 9 thereof, which are
hereby suspended and shall be of no further force or effect during the term of
this Agreement and after the Effective Time, but shall come back into effect if
this Agreement is terminated without the consummation of the Mergers), the
exhibits to this Agreement, the Holly Disclosure Letter, the Frontier Disclosure
Letter and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto. EACH PARTY HERETO
68
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, NEITHER FRONTIER NOR HOLLY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES
MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL
AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO ANY OTHER PARTY OR ANY OTHER
PARTY'S REPRESENTATIVES OF ANY DOCUMENT OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
SECTION 8.5 AMENDMENTS. This Agreement may be amended by the parties
hereto, by action taken or authorized by their Boards of Directors, at any time
before or after approval of matters presented in connection with the Mergers by
the stockholders of Holly or Frontier, but after any such stockholder approval,
no amendment shall be made which by law requires the further approval of
stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
SECTION 8.6 GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE. 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.
SECTION 8.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall be deemed to be one and the same instrument.
SECTION 8.8 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
SECTION 8.9 INTERPRETATION. In this Agreement:
(a) Unless the context otherwise requires, words describing the
singular number shall include the plural and vice versa, and words denoting any
gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa.
(b) The words "include", "includes" and "including" are not limiting.
(c) The phrase "to the knowledge of" and similar phrases relating to
knowledge of Holly or Frontier, as the case may be, shall mean the actual
knowledge of its executive officers.
69
(d) "Material Adverse Effect" with respect to Holly or Frontier shall
mean a material adverse effect with respect to (A) the business, assets and
liabilities (taken together), results of operations, condition (financial or
otherwise) or prospects of a party and its Subsidiaries on a consolidated basis
or (B) the ability of the party to consummate the transactions contemplated by
this Agreement or fulfill the conditions to closing set forth in Article 6,
except to the extent (in the case of either clause (A) or clause (B) above) that
such adverse effect results from (i) general economic, regulatory or political
conditions or changes therein in the United States or the other countries in
which such party operates; (ii) financial or securities market fluctuations or
conditions; (iii) changes in, or events or conditions affecting, the petroleum
refining industry generally; (iv) the announcement or pendency of the Mergers or
compliance with the terms and conditions of Section 5.1 hereof; or (v)
stockholder class action or other litigation arising from allegations of a
breach of fiduciary duty relating to this Agreement. "Holly Material Adverse
Effect" and "Frontier Material Adverse Effect" mean a Material Adverse Effect
with respect to Holly and Frontier, respectively.
(e) "Person" or "person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or other entity or
organization, including any government and any agency or instrumentality
thereof.
(f) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, of
which such party directly or indirectly owns or controls at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization, or any
organization of which such party is a general partner.
SECTION 8.10 WAIVERS. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder. The failure of any party to this Agreement to assert any of
its rights under this Agreement shall not constitute a waiver of such rights.
SECTION 8.11 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
SECTION 8.12 ENFORCEMENT OF AGREEMENT; LIMITATION ON DAMAGES. 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 its
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an
70
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any Delaware Court, this being
in addition to any other remedy to which they are entitled at law or in equity.
IN NO EVENT SHALL ANY PARTY BE LIABLE IN RESPECT OF THIS AGREEMENT FOR PUNITIVE
OR EXEMPLARY DAMAGES.
SECTION 8.13 OBLIGATION OF MERGER SUB ONE AND MERGER SUB TWO. Whenever
this Agreement requires any of Parent, Merger Sub One or Merger Sub Two (or any
successors) to take any action prior to the Effective Time, such requirement
shall be deemed to include an undertaking on the part of each of Frontier and
Holly to cause such action to be taken and a guarantee of the performance
thereof.
SECTION 8.14 EXTENSION; WAIVER. At any time prior to the Effective
Time, each party may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
SECTION 8.15 DEFINITIONS. The following capitalized terms are used in
this document with the meanings set forth in the indicated sections of this
Agreement:
Action....................................................................................Section 5.12(a)
Agreement.................................................................................First Sentence
AMEX......................................................................................Section 2.5(c)
Assumed Tax Rate..........................................................................Section 2.2(b)(iii)
Average Price.............................................................................Section 2.5(a)
Cash Consideration........................................................................Section 2.2(b)(ii)
Certificates of Merger....................................................................Section 1.3(b)
Claims Expenses...........................................................................Section 2.2(b)(iii)
Closing...................................................................................Section 1.3(a)
Closing Date..............................................................................Section 1.3(a)
Code......................................................................................Recitals
Confidentiality Agreement.................................................................Section 5.6
Consulting Agreement......................................................................Section 5.13(d)
Costs Threshold Date......................................................................Section 5.19
CVR.......................................................................................Section 2.2(b)(iii)
CVR Agreement.............................................................................Section 5.19
DGCL......................................................................................Section 1.2
D&O Insurance.............................................................................Section 5.12(c)
Delaware Courts...........................................................................Section 8.6
Delaware Secretary........................................................................Section 1.3(b)
Disclosure Letter.........................................................................Section 8.16
Dissenting Shares Cash Adjustment Amount..................................................Section 2.2(b)(iv)
ERISA.....................................................................................Section 3.11(b)
Effective Time............................................................................Section 1.3(b)
71
Employee Agreements.......................................................................Section 5.13(d)(ii)
Environmental Laws........................................................................Section 3.13(a)(i)
Environmental Permits.....................................................................Section 3.13(a)(iii)
Exchange Act..............................................................................Section 3.6(b)
Exchange Agent............................................................................Section 2.4(a)
Exchange Fund.............................................................................Section 2.4(a)
Frontier..................................................................................First sentence
Frontier Acquisition......................................................................Section 7.5(b)
Frontier Acquisition Proposal.............................................................Section 5.3(a)
Frontier Bargaining Agreements............................................................Section 4.12(a)
Frontier Certificate......................................................................Section 2.1(c)
Frontier Certificate of Merger............................................................Section 1.3(b)
Frontier Common Stock.....................................................................Recitals
Frontier Designees........................................................................Section 5.16(a)
Frontier Disclosure Letter................................................................ARTICLE 4
Frontier Dissenting Shares................................................................Section 2.1(e)
Frontier Material Adverse Effect..........................................................Section 8.9(d)
Frontier Material Contracts...............................................................Section 4.19(a)
Frontier Merger...........................................................................Recitals
Frontier Merger Consideration.............................................................Section 2.1(b)
Frontier Permits..........................................................................Section 4.5
Frontier Plans............................................................................Section 4.11(b)
Frontier Preferred Stock..................................................................Section 4.3
Frontier Real Properties..................................................................Section 4.13(a)(i)
Frontier Reports..........................................................................Section 4.7
Frontier Represented Employees............................................................Section 4.12(b)
Frontier Requisite Vote...................................................................Section 4.20
Frontier Rule 145 Affiliates..............................................................Section 5.10(b)
Frontier Rule 145 Agreement...............................................................Section 5.10(b)
Frontier Stock Option.....................................................................Section 2.6(a)
Frontier Stock Plans......................................................................Section 4.3
Frontier Superior Proposal................................................................Section 5.3(a)
Frontier Surviving Corporation............................................................Section 1.2(a)
Frontier Termination Amount...............................................................Section 7.5(b)
Hazardous Materials.......................................................................Section 3.13(a)(ii)
Holly.....................................................................................First Sentence
Holly Acquisition.........................................................................Section 7.5(a)
Holly Acquisition Proposal................................................................Section 5.2(a)
Holly Bargaining Agreements...............................................................Section 3.12(a)
Holly Certificate.........................................................................Section 2.2(c)
Holly Certificate of Merger...............................................................Section 1.3(b)
Holly Common Stock........................................................................Recitals
Holly Designees...........................................................................Section 5.16(a)
Holly Disclosure Letter...................................................................ARTICLE 3
Holly Dissenting Shares...................................................................Section 2.2(c)
Holly Material Adverse Effect.............................................................Section 8.9(d)
72
Holly Material Contracts..................................................................Section 3.19(a)
Holly Merger..............................................................................Recitals
Holly Merger Consideration................................................................Section 2.2(c)
Holly Permits.............................................................................Section 3.5
Holly Plans...............................................................................Section 3.11(b)
Holly Preferred Stock.....................................................................Section 3.3
Holly Real Properties.....................................................................Section 3.13(a)(v)
Holly Reports.............................................................................Section 3.7
Holly Represented Employees...............................................................Section 3.12(b)
Holly Requisite Vote......................................................................Section 3.20
Holly Rule 145 Affiliates.................................................................Section 5.10(a)
Holly Rule 145 Agreement..................................................................Section 5.10(a)
Holly Stock-Based Award...................................................................Section 2.5(c)
Holly Stock Option........................................................................Section 2.5(b)
Holly Stock Plans.........................................................................Section 3.3
Holly Superior Proposal...................................................................Section 5.2(a)
Holly Surviving Corporation...............................................................Section 1.2(b)
Holly Termination Amount..................................................................Section 7.5(a)
HSR Act...................................................................................Section 3.6(b)
Income Tax................................................................................Section 2.2(b)(iii)
Indemnified Parties.......................................................................Section 5.12(a)
Indemnified Party.........................................................................Section 5.12(a)
IRS.......................................................................................Section 3.10(b)
Jet Fuel Claims...........................................................................Section 2.2(b)(iii)
Liens.....................................................................................Section 1.1(b)
Material Adverse Effect...................................................................Section 8.9(d)
Mergers...................................................................................Recitals
Merger Sub One............................................................................First sentence
Merger Sub One Common Stock...............................................................Section 1.1(b)
Merger Sub Two............................................................................First sentence
Merger Sub Two Common Stock...............................................................Section 1.1(b)
Parent....................................................................................First Sentence
Parent Board..............................................................................Section 5.16(a)
Parent Bylaws.............................................................................Section 1.1(a)
Parent Charter............................................................................Section 1.1(a)
Parent Common Stock.......................................................................Section 1.1(a)
Parent Stock-Based Award..................................................................Section 2.5(c)
Parent Stock Option.......................................................................Section 2.5(b)
Non-Withdrawing Party.....................................................................Section 5.4(b)
NYSE......................................................................................Section 2.5(a)
Offsite Non-Frontier Real Properties......................................................Section 4.13(a)(ii)
Offsite Non-Holly Real Properties.........................................................Section 3.13(a)(vi)
Option Exchange Ratio.....................................................................Section 2.5(a)
PBGC......................................................................................Section 3.11(h)
Pension Plan..............................................................................Section 3.11(g)
Person....................................................................................Section 8.9(e)
73
Proxy Statement/Prospectus................................................................Section 5.8
Recovery..................................................................................Section 2.2(b)(iii)
Registration Rights Agreement.............................................................Section 5.10(a)
Registration Statement....................................................................Section 5.8
Regulatory Filings........................................................................Section 3.6(b)
Reimbursement Maximum Amount..............................................................Section 7.5(a)
Release...................................................................................Section 3.13(a)(iv)
Representatives...........................................................................Section 5.19
Rule 145 Agreement........................................................................Section 5.10(b)
SEC.......................................................................................Section 3.7
Securities Act............................................................................Section 3.6(b)
Severance Agreements......................................................................Section 5.13(d)
Severance Payments........................................................................Section 5.13(d)
Stock-Based Awards........................................................................Section 2.5(a)
Stock Consideration.......................................................................Section 2.2(b)(i)
Stock Option..............................................................................Section 2.5(a)
Stock Plan................................................................................Section 2.5(a)
Subsidiary................................................................................Section 8.9(f)
Tax.......................................................................................Section 3.10(d)
Tax Return................................................................................Section 3.10(d)
Taxes.....................................................................................Section 3.10(d)
Total Holly Common Stock Certificate......................................................Section 5.18
Total Holly Common Stock Number...........................................................Section 5.18
WBCA......................................................................................Section 1.2
Withdrawing Party.........................................................................Section 5.4(b)
Wyoming Secretary.........................................................................Section 1.3(b)
SECTION 8.16 DISCLOSURE LETTERS. The parties acknowledge and agree that
(a) the Holly Disclosure Letter and the Frontier Disclosure Letter (each a
"Disclosure Letter") may include certain items and information solely for
informational purposes for the convenience of the other party and (b) the
disclosure by either party of any matter in its Disclosure Letter shall not be
deemed to constitute an acknowledgment by such party that the matter is required
to be disclosed by the terms of this Agreement or that the matter is material.
If any Disclosure Letter discloses in any section or schedule thereof an item or
information in such a way as to make its relevance to the disclosure required by
another section or schedule thereof readily apparent, the matter shall be deemed
to have been disclosed in such other schedule, notwithstanding the omission of
an appropriate cross-reference to such other schedule.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
FRONTIER OIL CORPORATION
By: /s/ JAMES R. GIBBS
-----------------------------------------
Name: James R. Gibbs
Title: Chairman of the Board, President and
Chief Executive Officer
FRONT RANGE HIMALAYA CORPORATION
By: /s/ JAMES R. GIBBS
-----------------------------------------
Name: James R. Gibbs
Title: President and Chief Executive Officer
FRONT RANGE MERGER CORPORATION
By: /s/ JAMES R. GIBBS
-----------------------------------------
Name: James R. Gibbs
Title: President and Chief Executive Officer
HIMALAYA MERGER CORPORATION
By: /s/ JAMES R. GIBBS
-----------------------------------------
Name: James R. Gibbs
Title: President and Chief Executive Officer
HOLLY CORPORATION
By: /s/ C. LAMAR NORSWORTHY, III
-----------------------------------------
Name: C. Lamar Norsworthy, III
Title: Chairman of the Board and
Chief Executive Officer
EXHIBIT A
PARENT CHARTER
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FRONT RANGE HIMALAYA CORPORATION
Pursuant to the provisions of W.S. 17-16-1006 and W.S. 17-16-1007 of
the Wyoming Business Corporation Act, the undersigned Corporation adopts the
following Amended and Restated Articles of Incorporation as of this date:
FIRST: The name of the Corporation is Front Range Himalaya Corporation.
SECOND: The Corporation was originally incorporated under the name of
Front Range Himalaya Corporation, and the original Articles of Incorporation of
the Corporation were filed with the Secretary of State on _________________,
2003.
I, the undersigned ______________________, do hereby certify that the
Board of Directors of said Corporation at a meeting duly convened, held on the
____ day of ____________, 2003, and the shareholders at a special meeting duly
convened, held on the ______ day of _______________, 2003, adopted a resolution
to amend and restate the original Articles of Incorporation in their entirety as
follows:
ARTICLE ONE
The corporate name of the Corporation is Frontier Oil Corporation.
ARTICLE TWO
The term of existence of the Corporation shall be perpetual.
ARTICLE THREE
The street address of the Corporation's registered office is
_______________________ _________, and the name of its registered agent at that
office is __________________________.
ARTICLE FOUR
The purpose or purposes of the Corporation is to transact any and/or
all lawful business for which corporations may be incorporated under the Wyoming
Business Corporation Act (as amended from time to time, the "WBCA") and, in
general, to have and exercise all the powers conferred by the laws of Wyoming
upon corporations formed under the WBCA and to do any and all of the things
hereinafter set forth to the same extent as natural persons might or could do.
ARTICLE FIVE
The number of directors to be elected at the annual meeting of
shareholders or at a special meeting called for the election of directors shall
not be less than three nor more than fifteen, the exact number to be fixed by
the Bylaws.
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ARTICLE SIX
The aggregate number of shares of all classes of stock which the
Corporation shall have authority to issue is _______________ shares consisting
of and divided into:
(i) one class of _______________ shares of Common Stock, par
value $.01 per share; and
(ii) one class of _______________ shares of Preferred Stock,
par value $.01 per share, which may be divided into and issued in
series, as hereinafter provided.
The following is a statement of the designations, voting powers,
preferences, and relative, participating, optional and other special rights, and
qualifications, limitations, or restrictions thereon, of the classes of stock of
the Corporation.
PART I
PREFERRED STOCK
1. Rank; Authorization of Directors to Determine Certain Rights. The
Preferred Stock may be issued from time to time in one or more series and in
such amounts as may be determined by the Board of Directors. The voting powers,
designations, preferences and relative, participating, optional or other special
rights, if any, and the qualifications, limitations, or restrictions thereof, if
any, of the Preferred Stock of each series shall be such as are fixed by the
Board of Directors, authority so to do being hereby expressly granted, and as
are stated and expressed in a resolution or resolutions adopted by the Board of
Directors providing for the issue of such series of Preferred Stock (herein
called the "Directors' Resolution"). The Directors' Resolution as to any series
shall (1) designate the series, (2) fix the dividend rate, if any, of such
series, establish whether dividends shall be cumulative or non-cumulative, fix
the payment dates for dividends on shares of such series and the date or dates,
or the method of determining the date or dates, if any, from which dividends on
shares of such series shall be cumulative, (3) fix the amount or amounts payable
on shares of such series upon voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, and (4) state the price or
prices or rate or rates, and adjustments, if any, at which, the time or times
and the terms and conditions upon which, the shares of such series may be
redeemed at the option of the Corporation or at the option of the holder or
holders of shares of such series or upon the occurrence of a specified event,
and state whether such shares may be redeemed for cash, property or rights,
including securities of the Corporation or another entity; and such Directors'
Resolutions may (i) limit the number of shares of such series that may be
issued, (ii) provide for a sinking fund for the purchase or redemption of shares
of such series and specify the terms and conditions governing the operations of
any such fund, (iii) grant voting rights to the holders of shares of such
series, (iv) impose conditions or restrictions upon the creation of indebtedness
of the Corporation or upon the issuance of additional Preferred Stock or other
capital stock ranking on a parity therewith, or prior thereto, with respect to
dividends or distributions of assets upon liquidation, (v) impose conditions or
restrictions upon the payment of dividends upon, or the making of other
distributions to, or the acquisition of, shares ranking junior to the Preferred
Stock or to any series thereof with respect to dividends or distributions of
assets upon
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liquidation, (vi) state the time or times, the price or prices or the rate or
rates of exchange and other terms, conditions and adjustments upon which shares
of any such series may be made convertible into, or exchangeable for, at the
option of the holder or the Corporation or upon the occurrence of a specified
event, shares of any other series of Preferred Stock or any other class or
classes of stock or other securities of the Corporation, and (vii) grant such
other special rights and impose such qualifications, limitations or restrictions
thereon as shall be fixed by the Board of Directors, to the extent not
inconsistent with this Article Six and to the full extent now or hereafter
permitted by the laws of the State of Wyoming.
Except as by law expressly provided, or except as may be provided in
any Directors' Resolution, the Preferred Stock shall have no right or power to
vote on any question or in any proceeding or to be represented at, or to receive
notice of, any meeting of shareholders of the Corporation.
Preferred Stock that is redeemed, purchased, converted or retired by
the Corporation shall assume the status of authorized but unissued Preferred
Stock, without designation, and may thereafter, subject to the provisions of any
Directors' Resolution providing for the issue of any particular series of
Preferred Stock, be reissued in the same manner as authorized but unissued
Preferred Stock.
2. Dividends.
(a) Amount; Time. The Preferred Stock at the time outstanding
shall be entitled to receive, as and when declared by the Board of Directors,
out of any funds of the Corporation legally available therefor, dividends at the
rate fixed by the Board of Directors (pursuant to Section 1 of Part I of this
Article Six), and no more, payable on such date or dates in each year as the
Board of Directors shall determine.
(b) Cumulative Dividends. Dividends on Preferred Stock may be
cumulative, noncumulative or partially cumulative. Cumulations of dividends
shall not bear interest.
(c) Priority Over Common; Restriction on Purchases of Common.
No dividend shall be declared or paid on Common Stock, and no Common Stock shall
be purchased by the Corporation, unless all cumulative or partially cumulative
dividends on outstanding Preferred Stock for all past dividend periods and for
the current dividend period shall have been declared and paid.
3. Liquidation Preference. In the event of dissolution, liquidation or
winding-up of the Corporation (whether voluntary or involuntary), after payment
or provision for payment of debts but before any distribution to the holders of
Common Stock, the holders of each series of Preferred Stock then outstanding
shall be entitled to receive the amount fixed by the Board of Directors
(pursuant to Section 1 of Part I of this Article Six) plus a sum equal to all
cumulative but unpaid dividends (whether or not earned or declared) to the date
fixed for distribution, and no more. All remaining assets shall be distributed
pro rata among the holders of Common Stock. If the assets distributable among
the holders of Preferred Stock are insufficient to permit full payment to them,
the entire assets will be distributed among the holders of the Preferred Stock
in proportion to their respective liquidation preferences.
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PART II
COMMON STOCK
1. Rank. The Common Stock is subject and subordinate to any and all of
the rights, privileges, preferences and priorities of the Preferred Stock of the
Corporation as set forth in this Article Six. All shares of Common Stock shall
be of equal rank and shall be identical in all respects.
2. Liquidation, Dissolution or Winding-Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the affairs
of the Corporation and after the holders of the Preferred Stock shall have
received payment for each share of Preferred Stock equal to the redemption price
therefor (as established by the Board of Directors), the remaining assets of the
Corporation available for distribution to shareholders shall be divided and
distributed among the holders of the Common Stock based on the ratio which the
number of shares of Common Stock owned by each such holder bears to the
aggregate number of issued and outstanding shares of Common Stock.
3. Voting. The holders of shares of Common Stock shall possess full
voting power in the election of directors and for all other purposes, and each
holder of Common Stock shall at every meeting of the shareholders be entitled to
one vote for each share of Common Stock standing in such holder's name on the
books of the Corporation on the record date for determining shareholders
entitled to vote at such meeting.
4. Dividends. Subject to any prior dividend rights of the holders of
the Preferred Stock as described in Part I of this Article Six, the holders of
Common Stock shall be entitled to receive, on a share-for-share basis, as and
when declared by the Board of Directors, out of the funds of the Corporation
legally available therefor, such dividends (payable in cash, stock or otherwise)
as may be declared from time to time by the Board of Directors.
5. Redemption. The shares of Common Stock shall not be subject to
redemption by the Corporation.
PART III
PROVISIONS APPLICABLE TO ALL
CLASSES OF STOCK
1. Issue and Sale of Stock.
(a) The Board of Directors shall have the power and authority
at any time and from time to time to issue, sell or otherwise dispose of any
authorized and unissued shares of any class of stock of the Corporation to such
persons or parties, including the holders of any class of stock, for such
consideration (not less than the par value, if any, thereof) and upon such terms
and conditions as the Board of Directors in its discretion may deem for the best
interests of the Corporation.
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(b) No holder of stock of the Corporation shall be entitled to
purchase or subscribe for any part of any unissued stock of the Corporation or
any additional stock to be issued whether or not by reason of any increase of
the authorized capital stock of the Corporation, or any bonds, certificates of
indebtedness, debentures or other securities convertible into stock or such
additional authorized issuance of new stock, but rather such stock, bonds,
certificates of indebtedness, debentures and other securities may be issued and
disposed of pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of their discretion.
2. Registered Owner. The Corporation shall be entitled to treat the
person in whose name any share of its stock is registered as the owner thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to, or interest in, such share on the part of any other person, whether or
not the Corporation shall have notice thereof, except as expressly provided by
applicable laws.
ARTICLE SEVEN
Except as may be provided in the Bylaws of the Corporation, the Board
of Directors is expressly authorized to make, alter, amend or repeal the Bylaws,
without any action on the part of the shareholders, but the Bylaws made by the
Board of Directors and the powers conferred thereby may be altered or repealed
by the shareholders.
ARTICLE EIGHT
(a) No director of the Corporation shall be liable to the
Corporation or any of its shareholders for monetary damages for any action
taken, or any failure to take any action, as a director, except that this
Article Eight does not eliminate or limit the liability of a director for: (i)
the amount of financial benefit received by a director to which he or she is not
entitled, (ii) an intentional infliction of harm on the Corporation or its
shareholders, (iii) an unlawful distribution in violation of W.S. 17-16-833 of
the WBCA, or (iv) an intentional violation of criminal law. If the WBCA
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the WBCA. No amendment to or repeal
of this Article Eight shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
(b) The Corporation shall indemnify, in accordance with and to
the fullest extent now or hereafter permitted by Wyoming law, any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in the right of
the Corporation), by reason of the fact that he or she is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against any liability or expense, including reasonable attorneys' fees, actually
and reasonably incurred by such person in respect thereof, except liability for
(i)
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receipt of a financial benefit to which he or she is not entitled, (ii) an
intentional infliction of harm on the Corporation or its shareholders, (iii) an
unlawful distribution in violation of W.S. 17-16-833 of the WBCA, or (iv) an
intentional violation of criminal law. If the WBCA hereafter is amended to
authorize providing greater indemnification of a director, officer, employee or
agent of the Corporation, then the indemnification of such person, in addition
to the indemnification for liability provided herein, shall be provided to the
fullest extent permitted by the amended WBCA. No amendment to or repeal of this
Article Eight shall apply to or have any effect on the rights to indemnification
of any person pursuant to this Article Eight for or with respect to any acts or
omissions of such person occurring prior to such amendment or repeal.
(c) Expenses, including attorneys' fees, incurred by a
director or officer in defending any threatened or pending civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of the action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay the amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article Eight.
(d) The indemnification and advancement of expenses authorized
by this Article Eight shall not be exclusive of any other rights to which any
director, officer, employee or agent may be entitled under any bylaw, agreement,
vote of shareholders or disinterested directors or otherwise, both as to any
action in his or her official capacity and as to action in another capacity
while holding the office, and continues as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person.
(e) The Corporation may purchase and maintain insurance
providing coverage for any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against any liability
asserted against him or her and incurred by him or her in any capacity or
arising out of his or her status, whether or not the Corporation would have the
power or obligation to indemnify him or her against liability under the
provisions of this Article Eight.
ARTICLE NINE
The Corporation elects not to be subject to or governed by: (i) the
restrictions contained in W.S. 17-18-104(b) of the Wyoming Management Stability
Act (as amended from time to time, the "WMCA"); (ii) the shareholder takeover
protection provisions listed in W.S. 17-18-105 through 17-18-111 of the WMCA;
and (iii) Article 3 of the WMCA.
THIRD: The number of shares of the Corporation outstanding at the time
of adoption and entitled to vote thereon was two (2) shares of Common Stock.
FOURTH: Two (2) shares voted for such amendment and no shares voted
against such amendment.
FIFTH: Pursuant to Section 17-16-123 of the WBCA, these Amended and
Restated Articles of Incorporation shall not be effective until the Effective
Time, as such term is
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defined in that certain Agreement and Plan of Merger, dated as of ___________,
2003, by and among the Corporation, Frontier Oil Corporation,
Holly Corporation,
Front Range Merger Corporation, and Himalaya Merger Corporation, with such
Effective Time to not be later than 12:01 a.m., Central Daylight Time, on the
90th day after the filing date hereof.
IN WITNESS WHEREOF, the Corporation has caused these Amended and
Restated Articles of Incorporation to be signed by its _______________ and
attested by its ___________ this ____ day of ___________, 2003.
FRONT RANGE HIMALAYA CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
STATE OF
---------------------------
COUNTY OF
--------------------------
I, __________________, a Notary Public, do hereby certify that on this
_____ day of ______, 2003, personally appeared before me ________________, who,
being by me first duly sworn, declared that he or she is the _____________ of
Front Range Himalaya Corporation, that he or she signed the foregoing document
as such officer of the Corporation, and that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this ___ days
of ______, 2003.
-----------------------------------
NOTARY PUBLIC IN AND FOR
______________ County, ____________
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EXHIBIT B
PARENT BY-LAWS
BYLAWS
OF
FRONT RANGE HIMALAYA CORPORATION
(HEREINAFTER CALLED THE "CORPORATION")
ARTICLE I.
OFFICES
Section 1. The Corporation will maintain its executive offices in
Houston, Texas, or such other place as determined by the Board of Directors of
the Company.
Section 2. The Corporation may have other offices at such places both
within and without the State of Wyoming as the Board of Directors may from time
to time determine.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. Meetings of the shareholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Wyoming, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of shareholders shall
be held on such date and at such time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting, at which
meetings the shareholders shall elect directors and transact such other business
as may properly be brought before the meeting. Written notice of each annual
meeting stating the place, date and hour of the meeting shall be given to each
shareholder entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting.
Section 3. Special Meetings. Special meetings of shareholders, for any
purpose or purposes, may be called by the Chairman of the Board or the President
of the Corporation and shall be called by the President or Secretary of the
Corporation at the request of a majority of the Board of Directors. Written
notice of a special meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each shareholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law, the Articles of
Incorporation or these Bylaws, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been
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transacted at the meeting as originally noticed. If the adjournment is for more
than thirty (30) days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each shareholder entitled to vote at the meeting.
Section 5. Advance Notice. No business may be transacted at an annual
meeting of shareholders, other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors (or any duly authorized committee thereof), (b) otherwise
properly brought before the annual meeting by or at the direction of the Board
of Directors (or any duly authorized committee thereof) or (c) otherwise
properly brought before the annual meeting by any shareholder of the Corporation
(i) who is a shareholder of record on the date of the giving of the notice
provided for in this Section 5 and on the record date for the determination of
shareholders entitled to vote at such annual meeting and (ii) who complies with
the notice procedures set forth in this Section 5. In addition to any other
applicable requirements, for business to be properly brought before an annual
meeting by a shareholder, such shareholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation not less than
ninety (90) days nor more than one hundred twenty (120) days prior to the
anniversary date of the immediately preceding annual meeting of shareholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the shareholder, in order to be timely, must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or public disclosure
(as defined below) of the date of the annual meeting was made, whichever first
occurs. In no event shall the public disclosure of an adjournment of an annual
meeting commence a new time period for the giving of a shareholder's notice as
described above. For purposes of this second paragraph of Section 5, "public
disclosure" shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press, PR Newswire, Bloomberg or comparable national
news service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended.
To be in proper written form, a shareholder's notice must set forth as
to each matter such shareholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the name and record address of such shareholder, (iii) the class or series and
number of shares of capital stock of the Corporation which are owned
beneficially or of record by such shareholder, (iv) a description of all
arrangements or understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal of such business
by such shareholder and any material interest of such shareholder in such
business and (v) a representation that such shareholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
No business shall be conducted at the annual meeting of shareholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 5; provided, however, that once business
has been properly brought before the annual meeting in
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accordance with such procedures, nothing in this Section 5 shall be deemed to
preclude discussion by any shareholder of any such business. If the chair of an
annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the chair shall
declare that the business was not properly brought before the meeting and such
business shall not be transacted.
At a special meeting of shareholders, only such business shall be
conducted as shall have been set forth in the notice relating to the meeting. At
any meeting, matters incident to the conduct of the meeting may be voted upon or
otherwise disposed of as the chair of the meeting shall determine to be
appropriate.
Section 6. Voting. Unless otherwise required by law, the Articles of
Incorporation or these Bylaws, (i) any question brought before any meeting of
shareholders shall be decided by the vote of the holders of a majority of the
shares represented and entitled to vote thereat, and (ii) each shareholder
represented at a meeting of shareholders shall be entitled to cast one vote for
each share of the capital stock entitled to vote thereat held by such
shareholder. Such votes may be cast in person or by proxy, but no proxy shall be
voted on or after three (3) years from its date, unless such proxy provides for
a longer period. The Board of Directors, in its discretion, or the chair of a
meeting of shareholders, in his or her discretion, may require that any votes
cast at such meeting shall be cast by written ballot.
Section 7. List of Shareholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make a complete list of the shareholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each shareholder and
the number of shares registered in the name of each shareholder. Such list shall
be open to the examination of any shareholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any shareholder of the Corporation who is
present.
Section 8. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the shareholders entitled to examine the stock
ledger, the list required by Section 7 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of shareholders.
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ARTICLE III.
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by or under the direction of a Board of
Directors. Unless otherwise provided in the Articles of Incorporation, the
number of directors which shall constitute the whole Board of Directors shall be
fixed from time to time exclusively by resolution of the Board of Directors
adopted by the affirmative vote of at least a majority of the total number of
authorized directors most recently fixed by the Board of Directors. No reduction
in the authorized number of members of the Board of Directors shall have the
effect of removing any director from office before that director's term of
office expires. Directors need not be residents of the State of Wyoming or
shareholders of the Corporation.
Section 2. Vacancies. Vacancies on the Board of Directors and newly
created directorships resulting from an increase in the authorized number of
members of the Board of Directors may be filled only by a majority of the total
members of the Board of Directors. Each director, including a director elected
to fill a vacancy or a newly created directorship, shall hold office until the
next election of directors and until his or her successor is elected and
qualified or until his or her earlier death, resignation or removal from office.
Any director or the entire Board of Directors may be removed from office at any
time but only by the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the voting power of all outstanding shares of
capital stock of the Corporation then entitled to vote in an election of
directors of the Corporation voting as a single class. Except as may otherwise
be provided by law, cause for removal shall exist only if the director whose
removal is proposed has been convicted of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal or has
been adjudged by a court of competent jurisdiction to be liable for negligence
or misconduct in the performance of his or her duty to the Corporation in a
matter of substantial importance to the Corporation, and such adjudication is no
longer subject to direct appeal.
Section 3. Nominations. Nominations of persons for election to the
Board of Directors of the Corporation may be made at a meeting of shareholders
of the Corporation either by or at the direction of the Board of Directors or by
any shareholder of record entitled to vote in the election of directors at such
meeting who has complied with the notice procedures set forth in this Section 3.
A shareholder who desires to nominate a person for election to the Board of
Directors at a meeting of shareholders of the Corporation and who is eligible to
make such nomination must give timely written notice of the proposed nomination
to the Secretary of the Corporation. To be timely, a shareholder's notice given
pursuant to this Section 3 must be received at the principal executive office of
the Corporation not less than ninety (90) calendar days in advance of the date
which is one year later than the date of the proxy statement of the Corporation
released to the shareholders of the Corporation in connection with the previous
year's annual meeting of shareholders of the Corporation; provided, however,
that if no annual meeting of shareholders of the Corporation was held the
previous year or if the date of the forthcoming annual meeting of shareholders
has been changed by more than thirty (30) calendar days from the date
contemplated at the time of the previous year's proxy statement or if the
forthcoming meeting is not an annual meeting of shareholders of the Corporation,
then to be timely such shareholder's notice must be so received not later than
the close of business on the
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tenth (10th) day following the earlier of (a) the day on which notice of the
date of the forthcoming meeting was mailed or given to shareholders by or on
behalf of the Corporation or (b) the day on which public disclosure of the date
of the forthcoming meeting was made by or on behalf of the Corporation. Such
shareholder's notice to the Secretary of the Corporation shall set forth (a) as
to each person whom the shareholder proposes to nominate for election or
re-election as a director (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of capital stock of the Corporation
which are then beneficially owned by such person, (iv) any other information
relating to such person that is required by law or regulation to be disclosed in
solicitations of proxies for the election of directors of the Corporation and
(v) such person's written consent to being named as a nominee for election as a
director and to serve as a director if elected and (b) as to the shareholder
giving the notice, (i) the name and address, as they appear in the stock records
of the Corporation, of such shareholder, (ii) the class and number of shares of
capital stock of the Corporation which are then beneficially owned by such
shareholder, (iii) a description of all arrangements or understandings between
such shareholder and each nominee for election as a director and any other
person or persons (naming such person or persons) relating to the nomination
proposed to be made by such shareholder, and (iv) any other information required
by law or regulation to be provided by a shareholder intending to nominate a
person for election as a director of the Corporation. At the request of the
Board of Directors, any person nominated by or at the direction of the Board of
Directors for election as a director of the Corporation shall furnish to the
Secretary of the Corporation the information concerning such nominee which is
required to be set forth in a shareholder's notice of a proposed nomination. No
person shall be eligible for election as a director of the Corporation unless
nominated in compliance with the procedures set forth in this Section 3. The
chair of a meeting of shareholders of the Corporation shall refuse to accept the
nomination of any person not made in compliance with the procedures set forth in
this Section 3, and such defective nomination shall be disregarded.
Section 4. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Corporation's Articles of Incorporation or by these
Bylaws directed or required to be exercised or done by the shareholders.
Section 5. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Wyoming. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman of the Board, the Chief Executive Officer or any two directors.
Notice thereof stating the place, date and hour of the meeting shall be given to
each director either by mail not less than forty-eight (48) hours before the
time of the meeting, by telephone, electronic facsimile or telegram not less
than twenty-four (24) hours before the time of the meeting, or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate under the circumstances.
Section 6. Quorum. Except as may be otherwise specifically provided by
law, the Corporation's Articles of Incorporation or these Bylaws, at all
meetings of the Board of
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Directors, a majority of the entire number of members of the Board of Directors
(including any directorships that are then vacant) shall constitute a quorum for
the transaction of business, and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the Board of
Directors. If a quorum shall not be present at any meeting of the Board of
Directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 7. Actions of Board. Unless otherwise provided by the
Corporation's Articles of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all of the members of the
Board of Directors or committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or committee.
Section 8. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Corporation's Articles of Incorporation or these Bylaws, members
of the Board of Directors of the Corporation, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors or
such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 8 of this
Article III shall constitute presence in person at such meeting.
Section 9. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he, she or they constitute a quorum, may, when
specifically authorized by the Board of Directors to do so, unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any absent or disqualified member. Any committee, to the extent allowed by law
and provided in the resolution establishing such committee, shall have and may
exercise all of the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 10. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
Section 11. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other
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corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his, her or their votes are counted for such
purpose if (i) the material facts as to his, her or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or (ii) the material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof or the shareholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
Section 12. Corporate Governance During Specified Period.
Notwithstanding anything to the contrary contained in this Article III, during
the Specified Period (as defined in Article X) the provisions set forth in
Article X shall govern and be controlling to the extent that any provision in
this Article III is inconsistent or conflicts with Article X.
ARTICLE IV.
OFFICERS
Section 1. General. The offices of the Corporation shall be chosen by
the Board of Directors and shall be a Chairman of the Board, a Chief Executive
Officer, a President, a Chief Financial Officer and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more Vice
Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any
number of offices may be held by the same person, unless otherwise prohibited by
law, the Corporation's Articles of Incorporation or these Bylaws. The officers
of the Corporation need not be shareholders of the Corporation nor need such
officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of shareholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier death,
resignation or removal. Any officer elected by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Board of
Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries and other compensation of all
officers of the Corporation shall be fixed by the Board of Directors, or a
committee thereof.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chief
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Executive Officer, President or any Vice President and any such officer may, in
the name of and on behalf of the Corporation, take all such action as any such
officer may deem advisable to vote in person or by proxy at any meeting of
security holders of any corporation in which the Corporation may own securities
and at any such meeting shall possess and may exercise any and all rights and
powers incident to the ownership of such securities and which, as the owner
thereof, the Corporation might have exercised and possessed if present. The
Board of Directors may, by resolution, from time to time confer like powers upon
any other person or persons.
Section 4. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the Board of Directors and shall perform such other
duties, if any, as may be specified by the Board from time to time.
Section 5. Chief Executive Officer. The Chief Executive Officer of the
Corporation shall be the chief executive officer of the Corporation, shall have
general direction of the business and affairs of the Corporation and general
supervision over its several officers, subject, however, to the control of the
Board of Directors, and shall see that all orders and resolutions of the Board
of Directors are carried into effect. The Chief Executive Officer may sign, with
the Secretary or Assistant Secretary, certificates representing shares of stock
of the Corporation. The Chief Executive Officer shall perform all duties
incident to the office of the Chief Executive Officer and such other duties as
from time to time may be assigned to him by the Board of Directors or as
prescribed by these Bylaws.
Section 6. President. The Chief Executive Officer of the Corporation
shall be the President of the Corporation. The President shall perform such
duties and have such powers as the Board of Directors may from time to time
prescribe. The President may sign, with the Secretary or Assistant Secretary,
certificates representing shares of stock of the Corporation.
Section 7. Chief Financial Officer. The Chief Financial Officer of the
Corporation shall be the chief financial officer of the Corporation. The Chief
Financial Officer shall perform such other duties and have such other powers as
the Board of Directors or the Chief Executive Officer may from time to time
prescribe. In the absence of a Treasurer, the Chief Financial Officer shall have
the duties and exercise the powers of the Treasurer.
Section 8. Vice Presidents. The Vice Presidents shall perform such
duties and have such authority as may be specified in these Bylaws or by the
Board of Directors or the Chief Executive Officer. In the absence of the Chief
Executive Officer, a Vice President designated by the Board of Directors shall
have the duties and exercise the powers of the Chief Executive Officer.
Section 9. Secretary. The Secretary shall keep the minutes of the
shareholders and of the Board of Directors meetings, authenticate records of the
Corporation and perform such duties and have such authority as may be specified
in these Bylaws or by the Board of Directors or the Chief Executive Officer.
Section 10. Assistant Secretaries. The Assistant Secretary or
Secretaries shall, in the absence or disability of the Secretary, perform the
duties and exercise the authority of the
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Secretary and shall perform such other duties and have such other authority as
the Board of Directors or the Chief Executive Officer may from time to time
prescribe.
Section 11. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors or the Chief Executive Officer or the Chief Financial
Officer, taking proper vouchers for such disbursements, and shall render to the
Board of Directors when the Board of Directors so requires, an account of all
his transactions as Treasurer and of the financial condition of the Corporation.
Section 12. Assistant Treasurers. The Assistant Treasurer or Treasurers
shall, in the absence or disability of the Treasurer, perform the duties and
exercise the authority of the Treasurer and shall perform such other duties and
have such other authority as the Board of Directors or the Chief Executive
Officer or the Chief Financial Officer may from time to time prescribe.
Section 13. Corporate Governance During Specified Period.
Notwithstanding anything to the contrary contained in this Article IV, during
the Specified Period (as defined in Article X) the provisions set forth in
Article X shall govern and be controlling to the extent that any provision in
this Article IV is inconsistent or conflicts with Article X.
ARTICLE V.
SHARES
Section 1. Form of Certificates. Every holder of shares in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chief Executive Officer, President or a Vice President
and (ii) by the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by such holder of shares in the
Corporation.
Section 2. Signatures. Where a certificate is countersigned by (i) a
transfer agent other than the Corporation or its employee, or (ii) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he or she were such officer, transfer agent or registrar at the date of
issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or such owner's legal representative, to advertise the same in such
manner as the Board of Directors shall require
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and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfers. Shares of the Corporation shall be transferable
in the manner prescribed by law and in these Bylaws. Transfers of shares shall
be made on the books of the Corporation only by the person named in the
certificate or by his or her attorney lawfully constituted in writing and upon
the surrender of the certificate therefor, which shall be canceled before a new
certificate shall be issued.
Section 5. Record Date. In order that the Corporation may determine the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
ARTICLE VI.
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Corporation's Articles of Incorporation or these Bylaws, to be given to any
director, member of a committee or shareholder, such notice may be given by
mail, addressed to such director, member of a committee or shareholder, at his
or her address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by electronic facsimile, telegram, telex, overnight
courier or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Corporation's Articles of Incorporation or these Bylaws, to be given to any
director, member of a committee or shareholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
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ARTICLE VII.
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to limitations imposed by law and the provisions of the
Corporation's Articles of Incorporation, if any, may be declared by the Board of
Directors at any regular or special meeting, and may be paid in cash, in
property, or in shares of the capital stock. Before payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Board of Directors from time to time, in its
absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal, if any, shall be in such
form as the Board of Directors may prescribe.
ARTICLE VIII.
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other
than Those by or in the Right of the Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that such person is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
respect thereof.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by such person in respect thereof.
Section 3. Expenses Payable in Advance. Expenses (including attorneys'
fees) incurred by a director or officer in defending any threatened or pending
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in
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advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation as authorized in this Article VIII and a good
faith affirmation by or on behalf of such director or officer that he or she has
met the standard of conduct required by law or that liability has been
eliminated by the Articles of Incorporation.
Section 4. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article VIII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any Bylaw, agreement, contract, vote of shareholders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in a person's
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or Section 2 of this Article VIII but whom the Corporation has the
power or obligation to indemnify under the provisions of the Wyoming Business
Corporation Act, or otherwise.
Section 5. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of such person's status as such, whether or not the Corporation
would have the power or the obligation to indemnify such person against such
liability under the provisions of this Article VIII.
Section 6. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had the power and authority to indemnify its
directors and officers, so that any person who is or was a director or officer
of such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such indemnification relates to such
person's acts while serving in any of the foregoing capacities of such
constituent corporation, as such person would have with respect to such
constituent corporation if its separate existence had continued. For purposes of
this Article VIII, references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director or
officer of the Corporation which imposes duties on, or involves services by,
such director or officer with respect to an employee benefit plan, its
participants or beneficiaries.
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Section 7. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article VIII shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Section 8. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, the Corporation shall not be
obligated to indemnify any director or officer in connection with a proceeding
(or part thereof) initiated by such person unless such proceeding (or part
thereof) was authorized or consented to by the Board of Directors of the
Corporation.
Section 9. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX.
AMENDMENTS
Section 1. Amendments. Any action to alter, amend or repeal these
Bylaws or to adopt new Bylaws shall require the affirmative vote of at least 66
2/3 percent of the members of the entire Board of Directors and may be adopted
by the Board of Directors at any regular or special meeting thereof.
ARTICLE X.
CORPORATE GOVERNANCE DURING SPECIFIED PERIOD
Section 1. Defined Terms. As used in this Article X,
(a) "Effective Time" has the meaning set forth in the
Merger Agreement.
(b) "Front Range Designees" has the meaning set forth in the
Merger
Agreement.
(c) "Himalaya Designees" has the meaning set forth in the
Merger
Agreement.
(d) "List A Directors" means (i) the Front Range Designees, (ii) any
individual appointed by Nominating Subcommittee A to fill a vacancy among the
List A Directors and (iii) any individual elected to replace a List A Director
at any meeting of the shareholders of the Corporation held during the Specified
Period or designated as a List A Director pursuant to Section 3(b) of this
Article X.
(e) "List B Directors" means (i) the Himalaya Designees, (ii) any
individual appointed by Nominating Subcommittee B to fill a vacancy among the
List B Directors and (iii) any individual elected to replace a List B Director
at any meeting of the shareholders of the Corporation held during the Specified
Period or designated as a List B Director pursuant to Section 3(b) of this
Article X.
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(f) "
Merger Agreement" means that certain Agreement and Plan of Merger,
dated as of March ___, 2003, by and among Front Range Corporation, the
Corporation, Front Range Merger Corporation, Himalaya Merger Corporation and
Himalaya Corporation.
(g) "Nominating Subcommittee A" means the members of the nominating
committee of the Corporation at the Effective Time who are List A Directors.
(h) "Nominating Subcommittee B" means the members of the nominating
committee of the Corporation at the Effective Time who are List B Directors.
(i) "Specified Period" means the period of time commencing at the
Effective Time and ending immediately following the annual meeting of
shareholders of the Corporation to be held in 2005.
Section 2. Board of Directors.
(a) During the Specified Period, the Board of Directors shall consist
of twelve directors comprised of the List A Directors and the List B Directors,
which may not be changed by the Board of Directors during the Specified Period.
(b) During the Specified Period, without the affirmative vote of at
least 66 2/3 percent of the members of the entire Board of Directors at any
regular or special meeting thereof,
(i) the Chairman of the Board of Directors at the Effective
Time and the President and Chief Executive Officer of the Corporation
at the Effective Time may not be terminated or otherwise removed from
such positions;
(ii) the powers and duties of the Chairman of the Board of
Directors at the Effective Time and of the President and Chief
Executive Officer of the Corporation at the Effective Time may not be
diminished;
(iii) the Board of Directors may not propose any amendment to
the Articles of Incorporation of the Corporation for submission to the
shareholders of the Corporation that would have the effect of
eliminating, limiting, restricting, avoiding or otherwise modifying the
effect of the provisions set forth in this Article X;
(iv) the Corporation may not sell, lease, assign, transfer,
exchange or otherwise dispose of all or substantially all of the assets
of the Corporation (including the capital stock or assets of its direct
and indirect subsidiaries), in a single transaction or a series of
related transactions, to any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934) (a "Person"); and
(v) the Corporation may not agree to or consummate any
transaction or series of related transactions that would result in the
acquisition by any Person of beneficial ownership of 25% or more of
either (x) the then outstanding shares of common stock of the
Corporation or (y) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors.
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(c) During the Specified Period, the Board of Directors shall not take
any action or fail to take any action which would have the effect of
eliminating, limiting, restricting, avoiding or otherwise modifying the effect
of the provisions set forth in this Article X (e.g., by creating a holding
company structure if the articles or certificate of incorporation or other
governing documents of such holding company do not contain equivalent
provisions). To the extent that any provision of these Bylaws is inconsistent or
conflicts with this Article X, this Article X shall govern and be controlling.
Section 3. Committees of Board of Directors.
(a) During the Specified Period, each committee of the Board of
Directors shall consist of four directors comprised of an equal number of List A
Directors and List B Directors thereon; provided, however, that (i) Nominating
Subcommittee A shall consist of two directors comprised of List A Directors and
(ii) Nominating Subcommittee B shall consist of two directors comprised of List
B Directors. During the Specified Period, the Board of Directors shall maintain
an audit committee, a compensation committee, an executive committee and a
nominating committee (such nominating committee being comprised of Nominating
Subcommittee A and Nominating Subcommittee B), each such committee to perform
the functions traditionally performed by such committees except to the extent
that such functions are inconsistent or conflict with this Article X.
(b) During the Specified Period, all powers of the Board of Directors
to nominate candidates for election to the Board of Directors shall be delegated
to, and exercisable solely by, the nominating committee and its constituent
subcommittees, Nominating Subcommittee A and Nominating Subcommittee B, in
accordance with this subsection (b). During the Specified Period, (i)
nominations of candidates for election as List A Directors shall be made solely
by the affirmative vote of a majority of the directors on Nominating
Subcommittee A and (ii) nominations of candidates for election as List B
Directors shall be made solely by the affirmative vote of a majority of the
directors on Nominating Subcommittee B. During the Specified Period, such
nominations shall be the nominations made by the Board of Directors. In the
event that, during the Specified Period, a person is validly designated as a
nominee in accordance with this subsection (b) and shall thereafter become
unable or unwilling to stand for election to the Board of Directors, the
applicable nominating subcommittee who proposed such nominee may designate a
substitute nominee. If, during the Specified Period, an individual is elected as
a director of the Corporation at any meeting of the shareholders who was not
nominated pursuant to, or who was nominated in violation of, the provisions of
this subsection (b), such individual will be deemed to have the status of the
former director he or she was elected in lieu of. If, during the Specified
Period, multiple individuals are elected as directors of the Corporation at any
meeting of the shareholders who were not nominated pursuant to, or who were
nominated in violation of, the provisions of this subsection (b) and it is not
possible to determine whom they were elected in lieu of, their status as List A
Directors or List B Directors shall be determined by the entire Board of
Directors.
(c) During the Specified Period, all powers of the Board of Directors
to fill any vacancies occurring in the Board of Directors shall be delegated to,
and exercisable solely by, Nominating Subcommittee A and Nominating Subcommittee
B in accordance with this subsection (c). During the Specified Period, (i) any
vacancy occurring in the List A Directors
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may be filled solely by the affirmative vote of a majority of the directors on
Nominating Subcommittee A and (ii) any vacancy occurring in the List B Directors
may be filled solely by the affirmative vote of a majority of the directors on
Nominating Subcommittee B.
(d) During the Specified Period, all powers of the Board of Directors
to remove any member of, or fill any vacancies occurring in, the members of any
committee shall be delegated to, and exercisable solely by, Nominating
Subcommittee A and Nominating Subcommittee B in accordance with this subsection
(d); provided, however, that, during the Specified Period, (i) such powers of
the Board of Directors in respect of Nominating Subcommittee A shall be vested
in, and exercisable solely by, the List A Directors and (ii) such powers of the
Board of Directors in respect of Nominating Subcommittee B shall be vested
solely in, and exercisable solely by, the List B Directors. During the Specified
Period, (x) any vacancy occurring in the List A Directors on any committee
(other than Nominating Subcommittee A) may be filled solely by the affirmative
vote of a majority of the directors on Nominating Subcommittee A and any List A
Director on any committee (other than Nominating Subcommittee A) may be removed
solely by the affirmative vote of a majority of the directors on Nominating
Subcommittee A and (y) any vacancy occurring in the List B Directors on any
committee (other than Nominating Subcommittee B) may be filled solely by the
affirmative vote of a majority of the directors on Nominating Subcommittee B and
any List B Director on any committee (other than Nominating Subcommittee B) may
be removed solely by the affirmative vote of a majority of the directors on
Nominating Subcommittee B.
Section 4. Officers.
(a) During the Specified Period, the Chairman of the Board shall (i)
preside at all meetings of the Board of Directors, (ii) in the event that the
Chief Executive Officer shall be unable to serve due to temporary illness or
other disability or shall resign or be terminated, act in place and stead of the
Chief Executive Officer until the Chief Executive Officer shall resume his or
her duties or another person shall be appointed by the Board of Directors as
Chief Executive Officer, and (iii) perform such other duties, if any, as may be
specified by the Board of Directors from time to time.
B-16
EXHIBIT C
FORM OF HOLLY HOLDER SUPPORT AGREEMENT
This HOLLY HOLDER'S SUPPORT AGREEMENT (this "Agreement"), dated as of
March 30, 2003, is by and between Frontier Oil Corporation, a Wyoming
corporation ("Frontier"), and the undersigned holder (the "Holder") of shares or
options to acquire shares of common stock of
Holly Corporation, a Delaware
corporation (the "Holly"). Capitalized terms used and not defined herein shall
have the respective meanings ascribed to them in the
Merger Agreement referenced
below.
RECITALS
A. Frontier, Holly and other parties have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "
Merger Agreement") pursuant to
which Merger Sub Two will merge (the "Merger") with and into Holly, with Holly
surviving the Merger, on the terms and subject to the conditions set forth in
the
Merger Agreement;
B. As of the date hereof, Holder "beneficially owns" (as such term is
defined in Rule 13d-3 under the Exchange Act) and Holder 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 Common Stock, par value $0.01 per share, of Holly (the
"Common Stock") set forth beneath the Holder's name on the signature page
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 Holly 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 Holder 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 Holder's
"Subject Shares");
C. As a condition to the willingness of Frontier to enter into the
Merger Agreement, and as an inducement and in consideration therefor, Frontier
has required that Holder agree, and Holder has agreed, to enter into this
Agreement.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. VOTING AGREEMENT AND IRREVOCABLE PROXY.
(a) AGREEMENT TO VOTE THE SUBJECT SHARES. Holder, solely in Holder's
capacity as a stockholder of Holly, 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 Holly, however called, or in connection with any written consent of the
holders of any class or classes of the capital stock of Holly, Holder shall vote
(or cause to be voted) Holder's Subject Shares (i) in favor of the approval and
adoption 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 stockholders of Holly (or in connection with
any written consent) at which such matters are considered and at every
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adjournment thereof, (ii) 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 Holly or any of its
subsidiaries under the Merger Agreement or of Holder under this Agreement, and
(iii) except as otherwise agreed to in writing in advance by Frontier, against
the following actions or proposals (other than the transactions contemplated by
the Merger Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving Holly or any of
its subsidiaries and any Holly Acquisition Proposal; (B) any sale, lease or
transfer of a significant part of the assets (other than sales of current assets
in the ordinary course of business) of Holly or any of its subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of Holly or any of
its subsidiaries (each of the actions in clauses (A) or (B), a "Business
Combination"); and (C)(1) any change in the persons who constitute the board of
directors of Holly that is not approved in advance by at least a majority of the
persons who were directors of Holly as of the date of this Agreement (or their
successors who were so approved); (2) any change in the present capitalization
of Holly or any amendment of Holly's certificate of incorporation or bylaws; (3)
any other material change in Holly's corporate structure or business; or (4) any
other action or proposal involving Holly 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. Holder 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 218(a) of
the Delaware General Corporation Law for the duration of the Voting Period.
(b) GRANT OF IRREVOCABLE PROXY. Holder hereby appoints Frontier and any
designee of Frontier, and each of them individually, such Holder'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 Holder's Subject
Shares in accordance with Section 1(a). This proxy is given to secure the
performance of the duties of Holder under this Agreement. Holder shall promptly
cause a copy of this Agreement to be deposited with Holly at its principal place
of business. Holder shall execute such other instruments as may be necessary to
effectuate the intent of this proxy.
(c) NATURE OF IRREVOCABLE PROXY. The proxy and power of attorney
granted pursuant to Section 1(b) by Holder 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 Holder. The power of attorney granted herein is a durable power of attorney
and shall survive the dissolution, bankruptcy, death or incapacity of Holder.
For the avoidance of doubt, the proxy and power of attorney is granted pursuant
to Section 212(b) of the Delaware General Corporation Law, is coupled with an
interest and is granted to Frontier a party to this voting agreement which is
created under Section 218(a) of the Delaware General Corporation Law 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.
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2. COVENANTS. Except for pledges in existence as of the date hereof,
Holder agrees that, except as contemplated by the terms of this Agreement,
Holder shall not (a) 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 Holder's Subject Shares; (b)
grant any proxies or powers of attorney in respect of the Subject Shares,
deposit any of Holder's Subject Shares into a voting trust or enter into a
voting agreement with respect to any of Holder's Subject Shares; (c) exercise
any Holly Stock Options or fail to give any requested or required consent to the
conversion of any Holly Stock Options into Parent Stock Options as provided for
in and pursuant to the Merger Agreement; or (d) take any action that would have
the effect of preventing, impeding, interfering with or adversely affecting
Holder's ability to perform Holder's respective obligations under this
Agreement. Notwithstanding the foregoing, nothing herein shall prevent Holder
from assigning or transferring any Subject Shares beneficially owned by Holder
to any spouse, parent, child, trust, trust beneficiary, estate, family
partnership, partner, foundation (whether family, private or public) or other
charitable organization (a "Permitted Transferee") if such Permitted Transferee
agrees in writing to hold any Subject Shares subject to all of the provisions of
this Agreement as Holder hereunder. Holder further agrees to timely execute and
deliver a Holly Rule 145 Agreement as contemplated by the Merger Agreement.
3. REPRESENTATIONS AND WARRANTIES OF HOLDERS. Holder hereby represents
and warrants to Frontier as follows:
(a) DUE AUTHORITY. Holder has the capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. If Holder is
an entity, Holder is duly organized and validly existing under the laws of the
jurisdiction of its organization, and Holder has all necessary 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 the transactions contemplated hereby by Holder have, if
Holder is an entity, been duly authorized by all necessary action on the part of
Holder, and, assuming its due authorization, execution and delivery by Frontier,
constitutes a valid and binding obligation of Holder, enforceable against Holder
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
equitable principles.
(b) OWNERSHIP OF SHARES. Holder legally or beneficially owns (within
the definition of Rule 13d-3 under the Exchange Act) the number of shares of
Common Stock set forth beneath Holder's name on the signature page hereto. The
number of shares of Common Stock set forth beneath Holder's name on the
signature page hereto are all of the shares of Common Stock legally or
beneficially owned by Holder. Holder has sole voting power and sole power of
disposition, in each case with respect to all of shares of Common Stock set
forth beneath Holder's name on the signature page 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 the
signature page hereto. Also set forth on the signature page hereto is the number
of shares of Common stock issuable pursuant to stock options held by Holder.
C-3
(c) 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 Holder and the consummation by Holder of the
transactions contemplated hereby (it being understood that nothing herein shall
prevent Holder's compliance with Section 13(d) of the Exchange Act) and (ii)
none of the execution and delivery of this Agreement by Holder, the consummation
by Holder of the transactions contemplated hereby or compliance by Holder 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 Holder is a
party or by which Holder or any of Holder's 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 Holder's ability to perform Holder's obligations under this Agreement.
(d) RELIANCE BY FRONTIER. Holder understands and acknowledges that
Frontier is entering into the Merger Agreement in reliance upon the execution
and delivery of this Agreement by Holder.
4. REPRESENTATIONS AND WARRANTIES OF FRONTIER. Frontier hereby
represents and warrants to Holder as follows:
(a) DUE ORGANIZATION, ETC. Frontier is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation.
Frontier 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 the
transactions contemplated hereby by Frontier has been duly authorized by all
necessary action on the part of Frontier and, assuming its due authorization,
execution and delivery by Holder, constitutes a valid and binding obligation of
Frontier, enforceable against Frontier 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.
(b) 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 Frontier and the consummation by Frontier of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Frontier, the consummation by Frontier of the transactions
contemplated hereby shall (A) conflict with or result in any breach of the
organizational documents of Frontier, (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 Frontier is a party or by
which Frontier 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 Frontier's ability to perform
its obligations under this Agreement.
(c) RELIANCE BY HOLDER. Frontier understands and acknowledges that
Holder is entering into this Agreement in reliance upon the execution and
delivery of the Merger Agreement by Frontier.
C-4
5. MISCELLANEOUS.
(a) HOLDER CAPACITY. If Holder is or becomes during the term hereof a
director or officer of Holly, Holder does not make any agreement or
understanding herein in Holder's capacity as such director or officer. Holder
executes this Agreement solely in Holder's capacity as the record holder or
beneficial owner of Holder's Subject Shares and nothing herein shall limit or
affect any actions previously or hereafter taken by Holder in Holder's capacity
as an officer or director of Holly. Without limiting the foregoing, nothing in
this Agreement shall limit or affect the ability of a director or officer of
Holly to take any action as may be advisable or necessary in the discharge of
his or her fiduciary duties as such director or officer, and without regard to
whether he or she is, without limitation, (i) a trustee or co-trustee of one or
more Holders, (ii) an officer, consultant or other representative of a trustee
or co-trustee of one or more Holders, or (iii) a beneficiary of one or more
Holders.
(b) PUBLICATION. Holder hereby permits Frontier to publish and disclose
in the Proxy Statement/Prospectus (including all documents and schedules filed
with the Securities and Exchange Commission) Holder's identity and ownership of
shares of Common Stock and the nature of Holder's commitments, arrangements, and
understandings pursuant to this Agreement.
(c) FURTHER ACTIONS. Each of the parties hereto agrees that it will use
its reasonable best efforts to do all things necessary to effectuate this
Agreement.
(d) 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.
(e) 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 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
Frontier may assign and transfer its rights and obligations hereunder to any
direct or indirect wholly owned subsidiary of Frontier. Nothing in this
Agreement, expressed or implied, is intended to confer on any person, other than
the parties hereto, any rights or remedies.
(f) 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.
(g) 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.
(h) 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
C-5
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.
(i) 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.
(j) GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
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.
(k) 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.
(l) 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.
(m) TERMINATION. This Agreement shall terminate, and neither Frontier
nor Holder 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 (i)
the mutual consent of Frontier and Holder, (ii) the Effective Time, (iii) the
termination of the Merger Agreement pursuant to its terms or (iv) October 31,
2003; 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, the provisions of Section 2(a) shall
survive the termination of this Agreement by reason of clause (ii) of the
preceding sentence until 90 days after the Effective Time and Sections 5(d),
5(e), 5(h) and 5(j) shall survive the termination of this Agreement for any
reason.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
FRONTIER OIL CORPORATION, a Wyoming
corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
HOLDER
Printed Name:
-------------------------------
Number of Shares of Common Stock owned:
--------------------------------------------
Number of Shares of Common Stock issuable
upon exercise of Stock Options held:
--------------------------------------------
C-7
EXHIBIT D
FORM OF FRONTIER AFFILIATE'S SUPPORT AGREEMENT
This FRONTIER AFFILIATE'S SUPPORT AGREEMENT (this "Agreement"), dated
as of March 30, 2003, is by and between
Holly Corporation, a Delaware
corporation (the "Holly"), and the undersigned holder (the "Affiliate") of
shares or options to acquire shares of common stock of Frontier Oil Corporation,
a Wyoming corporation ("Frontier"). Capitalized terms used and not defined
herein shall have the respective meanings ascribed to them in the Merger
Agreement referenced below.
RECITALS
A. Frontier, Holly and other parties have entered into an Agreement and
Plan of Merger, dated as of March 30, 2003 (the "Merger Agreement") pursuant to
which Merger Sub One will merge (the "Merger") with and into Frontier, with
Frontier surviving the Merger, on the terms and subject to the conditions set
forth in the Merger Agreement;
B. As of the date hereof, Affiliate "beneficially owns" (as such term
is defined in Rule 13d-3 under the Exchange Act) and Affiliate 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 Common Stock, without par value per share, of
Frontier (the "Common Stock") set forth beneath the Affiliate's name on the
signature page 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 Frontier 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 Affiliate 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 Affiliate's "Subject Shares");
C. As a condition to the willingness of Holly to enter into the Merger
Agreement, and as an inducement and in consideration therefor, Holly has
required that Affiliate agree, and Affiliate has agreed, to enter into this
Agreement.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. VOTING AGREEMENT AND IRREVOCABLE PROXY.
(a) AGREEMENT TO VOTE THE SUBJECT SHARES. Affiliate, solely in
Affiliate's capacity as a stockholder of Frontier, 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 Frontier, however called, or in connection with any written
consent of the holders of any class or classes of the capital stock of Frontier,
Affiliate shall vote (or cause to be voted) Affiliate's Subject Shares (i) in
favor of the approval and adoption 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 stockholders of
Frontier (or in connection with any written consent) at which such matters are
considered and at every
D-1
adjournment thereof, (ii) 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 Frontier or any of its
subsidiaries under the Merger Agreement or of Affiliate under this Agreement,
and (iii) except as otherwise agreed to in writing in advance by Holly, against
the following actions or proposals (other than the transactions contemplated by
the Merger Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving Frontier or any of
its subsidiaries and any Holly Acquisition Proposal; (B) any sale, lease or
transfer of a significant part of the assets (other than sales of current assets
in the ordinary course of business) of Frontier or any of its subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of Frontier or any
of its subsidiaries (each of the actions in clauses (A) or (B), a "Business
Combination"); and (C)(1) any change in the persons who constitute the board of
directors of Frontier that is not approved in advance by at least a majority of
the persons who were directors of Frontier as of the date of this Agreement (or
their successors who were so approved); (2) any change in the present
capitalization of Frontier or any amendment of Frontier's certificate of
incorporation or bylaws; (3) any other material change in Frontier's corporate
structure or business; or (4) any other action or proposal involving Frontier 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.
Affiliate 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 W.S. 17-16-731 of the Wyoming Business Corporation Act for
the duration of the Voting Period.
(b) GRANT OF IRREVOCABLE PROXY. Affiliate hereby appoints Holly and any
designee of Holly, and each of them individually, such Affiliate'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 Affiliate's
Subject Shares in accordance with Section 1(a). This proxy is given to secure
the performance of the duties of Affiliate under this Agreement. Affiliate shall
promptly cause a copy of this Agreement to be deposited with Frontier at its
principal place of business. Affiliate shall take such further action or execute
such other instruments as may be necessary to effectuate the intent of this
proxy.
(c) NATURE OF IRREVOCABLE PROXY. The proxy and power of attorney
granted pursuant to Section 1(b) by Affiliate 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 Affiliate. The power of attorney granted herein is a durable
power of attorney and shall survive the dissolution, bankruptcy, death or
incapacity of Affiliate. For the avoidance of doubt, the proxy and power of
attorney is granted pursuant to W.S. 17-16-731 of the Wyoming Business
Corporation Act, is coupled with an interest and is granted to Holly as a
stockholder of Frontier and a party to this voting agreement which is created
under W.S. 17-16-731 of the Wyoming Business Corporation Act and is intended to
be valid during the
D-2
Voting Period, which the parties understand and agree may be more than eleven
months from the date hereof.
2. COVENANTS. Except for pledges in existence as of the date hereof,
Affiliate agrees that, except as contemplated by the terms of this Agreement,
Affiliate shall not (a) 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 Affiliate's Subject Shares;
(b) grant any proxies or powers of attorney in respect of the Subject Shares,
deposit any of Affiliate's Subject Shares into a voting trust or enter into a
voting agreement with respect to any of Affiliate's Subject Shares; or (c) take
any action that would have the effect of preventing, impeding, interfering with
or adversely affecting Affiliate's ability to perform Affiliate's respective
obligations under this Agreement. Notwithstanding the foregoing, nothing herein
shall prevent Affiliate from assigning or transferring any Subject Shares
beneficially owned by Affiliate to any trust, estate, family partnership,
foundation (whether family, private or public) or other charitable organization
(a "Permitted Transferee") if such Permitted Transferee agrees in writing to
hold any Subject Shares subject to all of the provisions of this Agreement as
Affiliate hereunder.
3. REPRESENTATIONS AND WARRANTIES OF AFFILIATES. Affiliate hereby
represents and warrants to Holly as follows:
(a) DUE AUTHORITY. Affiliate has the capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. Affiliate
hereby represents and warrants to Holly as follows: If Affiliate is an entity,
Affiliate is duly organized and validly existing under the laws of the
jurisdiction of its organization, and Affiliate has all necessary 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 the transactions contemplated hereby by Affiliate have,
if Affiliate is an entity, been duly authorized by all necessary action on the
part of Affiliate, and, assuming its due authorization, execution and delivery
by Holly, constitutes a valid and binding obligation of Affiliate, enforceable
against Affiliate 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 equitable principles.
(b) OWNERSHIP OF SHARES. Affiliate legally or beneficially owns the
number of shares of Common Stock set forth beneath Affiliate's name on the
signature page hereto. The number of shares of Common Stock set forth beneath
Affiliate's name on the signature page hereto are all of the shares of Common
Stock legally or beneficially owned by Affiliate. Affiliate has sole voting
power and sole power of disposition, in each case with respect to all of shares
of Common Stock set forth beneath Affiliate's name on the signature page 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 the signature page hereto. Also set forth on the signature page hereto
is the number of shares of Common stock issuable pursuant to stock options held
by Affiliate.
D-3
(c) 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 Affiliate and the consummation by Affiliate of
the transactions contemplated hereby (it being understood that nothing herein
shall prevent Affiliate's compliance with Section 13(d) of the Exchange Act) and
(ii) none of the execution and delivery of this Agreement by Affiliate, the
consummation by Affiliate of the transactions contemplated hereby or compliance
by Affiliate 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
Affiliate is a party or by which Affiliate or any of Affiliate's 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 Affiliate's ability to perform Affiliate's obligations under
this Agreement.
(d) RELIANCE BY HOLLY. Affiliate understands and acknowledges that
Holly is entering into the Merger Agreement in reliance upon the execution and
delivery of this Agreement by Affiliate.
4. REPRESENTATIONS AND WARRANTIES OF HOLLY. Holly hereby represents and
warrants to Affiliate as follows:
(a) DUE ORGANIZATION, ETC. Holly is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation. Holly
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 the transactions
contemplated hereby by Holly has been duly authorized by all necessary action on
the part of Holly and, assuming its due authorization, execution and delivery by
Affiliate, constitutes a valid and binding obligation of Holly, enforceable
against Holly 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.
(b) 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 Holly and the consummation by Holly of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Holly, the consummation by Holly of the transactions
contemplated hereby shall (A) conflict with or result in any breach of the
organizational documents of Holly, (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 Holly is a party or by
which Holly 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 Holly's ability to perform its
obligations under this Agreement.
(c) RELIANCE BY AFFILIATE. Holly understands and acknowledges that
Affiliate is entering into this Agreement in reliance upon the execution and
delivery of the Merger Agreement by Holly.
D-4
5. MISCELLANEOUS.
(a) AFFILIATE CAPACITY. If Affiliate is or becomes during the term
hereof a director or officer of Frontier, Affiliate does not make any agreement
or understanding herein in Affiliate's capacity as such director or officer.
Affiliate executes this Agreement solely in Affiliate's capacity as the record
holder or beneficial owner of Affiliate's Subject Shares and nothing herein
shall limit or affect any actions taken by Affiliate in Affiliate's capacity as
an officer or director of Frontier.
(b) PUBLICATION. Affiliate hereby permits Holly to publish and disclose
in the Proxy Statement/Prospectus (including all documents and schedules filed
with the Securities and Exchange Commission) Affiliate's identity and ownership
of shares of Common Stock and the nature of Affiliate's commitments,
arrangements, and understandings pursuant to this Agreement.
(c) FURTHER ACTIONS. Each of the parties hereto agrees that it will use
its best efforts to do all things necessary to effectuate this Agreement.
(d) 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.
(e) 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 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
Holly may assign and transfer its rights and obligations hereunder to any direct
or indirect wholly owned subsidiary of Holly. Nothing in this Agreement,
expressed or implied, is intended to confer on any person, other than the
parties hereto, any rights or remedies.
(f) 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.
(g) 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.
(h) 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.
D-5
(i) 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.
(j) GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
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.
(k) 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.
(l) 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.
(m) TERMINATION. This Agreement shall terminate, and neither Holly nor
Affiliate 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 (i)
the mutual consent of Holly and Affiliate, (ii) the Effective Time, (iii) the
termination of the Merger Agreement pursuant to its terms or (iv) October 31,
2003; 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, the provisions of Section 2(a) shall
survive the termination of this Agreement by reason of clause (ii) of the
preceding sentence until 90 days after the Effective Time and Sections 5(d),
5(e), 5(h) and 5(j) shall survive the termination of this Agreement for any
reason.
[SIGNATURE PAGE FOLLOWS]
D-6
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
HOLLY CORPORATION, a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
AFFILIATE
Printed Name:
-------------------------------
Number of Shares of Common Stock owned:
--------------------------------------------
Number of Shares of Common Stock issuable
upon exercise of Stock Options held:
--------------------------------------------
D-7
EXHIBIT E
FORM OF HOLLY AFFILIATE'S RULE 145 AGREEMENT
This HOLLY AFFILIATE'S RULE 145 AGREEMENT, dated as of March 30, 2003
(this "Agreement") is between Front Range Himalaya Corporation, a Wyoming
corporation ("Parent"), and the undersigned holder (the "Affiliate") of shares
or options to acquire shares of common stock of
Holly Corporation, a Delaware
corporation (the "Holly"). Capitalized terms not otherwise defined in this
Agreement have the meanings ascribed to them in the Merger Agreement referenced
below.
RECITALS
A. Parent, Frontier, Holly and other parties have entered into an
Agreement and Plan of Merger, dated as of March 30, 2003 (the "Merger
Agreement"), pursuant to which Merger Sub Two will merge (the "Holly Merger")
with and into Holly, with Holly surviving the Holly Merger, on the terms and
subject to the conditions set forth in the Merger Agreement (capitalized terms
being used in this Agreement with the meanings specified in the Merger
Agreement);
B. Pursuant to the Merger Agreement, at the Effective Time, outstanding
shares of Holly Common Stock will be converted into the Holly Merger
Consideration, including shares of Parent Common Stock;
C. The execution and delivery of this Agreement by Affiliate is a
material inducement to Parent to enter into the Merger Agreement; and
D. Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of Holly, as such term is used (i) for purposes of paragraphs (c)
and (d) of Rule 145 of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act").
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. ACKNOWLEDGMENTS BY AFFILIATE. Affiliate acknowledges and understands
that the representations, warranties and covenants made by Affiliate set forth
in this Agreement will be relied upon by Parent, Frontier, Holly, and their
respective affiliates and counsel, and that substantial losses and damages may
be incurred by such persons if Affiliate's representations, warranties or
covenants are breached. Affiliate has carefully read this Agreement and the
Merger Agreement and has consulted with such legal counsel and financial
advisers as Affiliate has deemed appropriate in connection with the execution of
this Agreement.
2. COMPLIANCE WITH RULE 145 AND THE ACT. Affiliate has been advised
that (i) the issuance of shares of Parent Common Stock in connection with the
Holly Merger is expected to be effected pursuant to a Registration Statement
filed by Parent on Form S-4, and the resale of such shares will be subject to
the restrictions set forth in Rule 145 under the Act unless such shares are
otherwise transferred pursuant to an effective registration statement under the
Act or an appropriate exemption from registration, and (ii) Affiliate may be
deemed to be an affiliate of Holly. Affiliate accordingly agrees not to sell,
pledge, transfer or otherwise dispose of any
E-1
shares of Parent Common Stock issued to Affiliate in the Merger, unless (i) such
sale, pledge, transfer or other disposition is made in conformity with the
requirements of Rule 145 under the Act, (ii) such sale, pledge, transfer or
other disposition is made pursuant to an effective registration statement under
the Act, or (iii) Affiliate delivers to Parent a written opinion of counsel, in
form and substance reasonably acceptable to Parent to the effect that such sale,
pledge, transfer or other disposition is otherwise exempt from registration
under the Act.
3. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document. Delivery of an executed counterpart of this Agreement
by facsimile shall be effective to the fullest extent permitted by applicable
law.
(b) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties and their respective successors and
assigns. As used in this Agreement, the term "successors and assigns" means,
where the context to permits, heirs, executors, administrators, trustees and
successor trustees, and personal and other representatives.
(c) This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with the laws
of the State of Delaware. The parties irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America, in either case located in Wilmington, Delaware
(the "Delaware Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated by this Agreement (and agree not to
commence any litigation relating thereto except in such Delaware Courts), waive
any objection to the laying of venue of any such litigation in the Delaware
Courts and agree not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.
(d) If any term, provision, covenant, or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the terms, provisions, covenants, and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated.
(e) Counsel to the parties to the Merger Agreement shall be entitled to
rely upon this Agreement as needed.
(f) This Agreement shall not be modified or amended, or any right
waived or any obligations excused, except by a written agreement signed by both
parties.
(g) Notwithstanding any other provision contained in this Agreement,
this Agreement and all obligations under this Agreement shall terminate upon the
termination of the Merger Agreement in accordance with its terms.
(h) From and after the Effective Time of the Holly Merger and as long
as is necessary in order to permit Affiliate to sell Parent Common Stock held by
Affiliate pursuant to Rule 145 and, to the extent applicable, Rule 144 under the
Act, Parent will file on a timely basis all reports
E-2
required to be filed by it pursuant to the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as the same shall be in
effect at the time, and shall otherwise make available adequate public
information regarding Parent in such manner as may be required to satisfy the
requirements of paragraph (c) of Rule 144 under the Act.
[SIGNATURE PAGE FOLLOWS]
E-3
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
FRONT RANGE HIMALAYA CORPORATION, a Wyoming
corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
AFFILIATE
Printed Name:
-------------------------------
Number of Shares of Common Stock owned:
--------------------------------------------
Number of Shares of Common Stock issuable
upon exercise of Stock Options held:
--------------------------------------------
E-4
EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
March 30, 2003, by and among Front Range Himalaya Corporation, a Wyoming
corporation (the "COMPANY"), and the parties hereto that have executed and
delivered to the Company counterparts hereof that have been accepted by the
Company as evidenced by the Company's listing such parties on Exhibit A hereto
(collectively, the "INITIAL HOLDERS").
WITNESSETH:
WHEREAS, the Company, Front Range Corporation, a Wyoming corporation,
Holly Corporation, a Delaware corporation, and certain other parties have
entered into an Agreement and Plan of Merger (the "MERGER AGREEMENT") dated as
of March 30, 2003, pursuant to which each of the Initial Holders shall receive a
number of shares of Common Stock, par value $0.01 per share ("COMMON STOCK"), of
the Company to be determined as set forth therein;
WHEREAS, in order to induce each of the Initial Holders to enter into a
Rule 145 Agreement (as defined in the Merger Agreement), the Company has agreed
to grant certain registration rights to the Initial Holders with respect to such
shares of Common Stock as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
As used herein, the following terms have the indicated meanings, unless
the context otherwise requires:
"COMMISSION" means the Securities and Exchange Commission.
"EFFECTIVE TIME" has the meaning set forth in the Merger Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"HOLDER" means an Initial Holder or any permitted transferee thereof
who owns Registrable Shares.
"MAJORITY IN INTEREST" means Holders who hold a majority of the
Registrable Shares.
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or other entity or organization,
including any government and any agency or instrumentality thereof.
F-1
"REGISTRABLE SHARES" means all shares of Common Stock received by the
Holders pursuant to the Merger Agreement (including any Common Stock issuable
upon the exercise of Parent Stock Options (as defined in the Merger Agreement),
together with any securities issued or issuable by the Company with respect to
any such shares of Common Stock by way of a stock dividend or other distribution
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or reorganization. Any Registrable Shares will cease to be
such when (i) a registration statement covering the sale of such Registrable
Shares has become effective under the Securities Act and such securities have
been disposed of in accordance with such effective registration statement, (ii)
such Registrable Shares have been distributed by the Holders to the public
pursuant to Rule 144 or 145 (or any similar provision then in force) under the
Securities Act, (iii) such Registrable Shares may be resold to the public
without restriction under the Securities Act in accordance with Rule 144(k),
(iv) such Registrable Shares have been otherwise transferred by the Holders, new
certificates representing the transferred securities not bearing a legend
restricting further transfer have been delivered by the Company to the
transferees thereof and the subsequent disposition of such securities shall not
require registration or qualification of such securities under the Securities
Act or any similar state law then in force, or (v) such securities have ceased
to be outstanding.
"REGISTRATION STATEMENT" has the meaning set forth in the Merger
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
2. SHELF REGISTRATION.
The Company agrees that it shall file with the Commission on Form S-3
(or any successor form) a shelf registration statement pursuant to Rule 415 of
the Securities Act (a "SHELF REGISTRATION") covering the offer and resale by the
Holders of all the Registrable Shares and shall use its reasonable best efforts
to cause the Shelf Registration to be declared effective by the Commission
promptly after the Effective Time. The offer and resale of such shares shall be
pursuant to a plan of distribution as proposed by a Majority in Interest and
approved by the Company, which approval will not be unreasonably withheld;
provided that such plan of distribution shall not include an underwritten public
offering. The Company shall be required to maintain the effectiveness of the
Shelf Registration for a period of two years from the Effective Time.
3. REGISTRATION PROCEDURES.
Pursuant to the Company's covenant herein to effect a Shelf
Registration, the Company will, subject to the provisions of this Agreement, use
its reasonable best efforts to effect the registration in a manner that permits
the sale of the Registrable Securities covered thereby in accordance with the
intended method or methods of disposition. The Company shall:
(a) use its reasonable best efforts to prepare and file with the
Commission a Form S-3 registration statement (or any successor form) with
respect to the Registrable Shares as soon as possible after the Commission
declares the Registration Statement effective;
F-2
(b) use its reasonable best efforts to have all comments that the
Commission may have with respect to the Shelf Registration resolved with the
Commission prior to the Effective Time;
(c) use its reasonable best efforts to file with the Commission
immediately after the Effective Time a Form 8-K Report (or any successor form)
required in connection with the Mergers (as defined in the Merger Agreement)
("FORM 8-K"), including the financial statements required by Item 2 and Item 7
of Form 8-K;
(d) use its reasonable best efforts to cause the Shelf Registration to
be declared effective by the Commission promptly after the Effective Time;
(e) (i) prepare and file with the Commission such amendments,
post-effective amendments and supplements to the Shelf Registration as may be
necessary to keep the Shelf Registration effective for a period of two years
from the Effective Time, and (ii) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by the Shelf
Registration during the applicable period in accordance with the intended
methods of disposition by the Holders set forth in the Shelf Registration or
prospectus supplement.
(f) furnish to each Holder of Registrable Shares such number of copies
of the Shelf Registration, each amendment and supplement thereto, the prospectus
included in the Shelf Registration (including each preliminary prospectus), any
documents incorporated by reference therein and such other documents as such
Holder may reasonably request in order to facilitate the disposition of the
Registrable Shares owned by such Holder (it being understood that, subject to
Section 4 and the requirements of the Securities Act and applicable state
securities laws, the Company consents to the use of the prospectus and any
amendment or supplement thereto by each Holder in connection with the offering
and sale of the Registrable Shares covered by the registration statement of
which such prospectus, amendment or supplement is a part);
(g) use commercially reasonable efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of such
jurisdictions as the Holders reasonably request to the extent such registration
or qualification is required; use reasonable best efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period in which the Shelf Registration is required to be kept effective; and do
any and all other acts and things which may be reasonably necessary or advisable
to enable each Holder to consummate the disposition of the Registrable Shares
owned by such Holder in such jurisdictions (provided, however, that the Company
will not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subparagraph or
(ii) consent to general service of process in any such jurisdiction);
(h) promptly notify each Holder and (if requested by any Holder)
confirm such notice in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed and, with respect to a
registration statement or any post-effective amendment, when the same has become
effective, (ii) of the issuance by any state securities or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Shares under state securities or "blue
sky" laws or the initiation of any proceedings for that purpose, and (iii) of
the happening of any event which makes any statement made in a
F-3
registration statement or related prospectus untrue in any material respect or
which requires the making of any changes in such registration statement,
prospectus or documents so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and, as soon as
practicable thereafter, prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable to
the purchasers of such Registrable Shares, such prospectus will not contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(i) make generally available to the Company's securityholders an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act no later than 30 days after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after the
effective date of a registration statement, which earnings statement shall cover
said 12-month period, and which requirement will be deemed to be satisfied if
the Company timely files complete and accurate information on Forms 10-Q, 10-K
and 8-K under the Exchange Act and otherwise complies with Rule 158 under the
Securities Act;
(j) if reasonably requested by any Holder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as any Holder
reasonably requests to be included therein (relating to the naming of additional
Holders therein or specifying the number of Registrable Shares held by each such
Holder), and promptly make all required filings of such prospectus supplement;
(k) as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement (in
the form in which it was incorporated), deliver a copy of each such document to
each Holder upon such Holder's written request;
(l) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates (which shall not bear any restrictive legends unless
required under applicable law) representing securities sold under any
registration statement, and enable such securities to be in such denominations
and registered in such names as such Holders may request and keep available and
make available to the Company's transfer agent prior to the effectiveness of
such registration statement a supply of such certificates;
(m) promptly make available for inspection by any Holder and any
attorney, accountant or other agent or representative retained by any such
Holder (collectively, the "INSPECTORS"), all publicly available documents of the
Company (collectively, the "RECORDS"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility;
(n) use its reasonable best efforts to cause the Registrable Shares
included in any registration statement to be (i) listed on each securities
exchange, if any, on which securities of the same type issued by the Company are
then listed, or (ii) authorized to be quoted and/or listed (to the extent
applicable) on the Nasdaq National Market if the Registrable Shares so qualify;
F-4
(o) provide a CUSIP number for the Registrable Shares included in any
registration statement not later than the effective date of such registration
statement;
(p) cooperate with each Holder participating in the disposition of such
Registrable Shares and their respective counsel in all reasonable respects in
connection with any filings required to be made with the National Association of
Securities Dealer, Inc. ("NASD");
(q) during the period when the prospectus is required to be delivered
under the Securities Act, file within the required time periods all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act;
(r) notify each Holder promptly of any request by the Commission for an
amendment or supplement to such registration statement or prospectus or for
additional information; and
(s) advise each Holder, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for such purpose and promptly use all commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
4. SUSPENSION OF DISPOSITIONS.
Each Holder agrees that, upon receipt of any notice (a "SUSPENSION
NOTICE") from the Company of the happening of any event of the kind described in
Section 3(h)(iii), such Holder will forthwith discontinue disposition of
Registrable Shares pursuant to any prospectus until such Holder's receipt of the
copies of the supplemented or amended prospectus, or until it is advised in
writing (the "ADVICE") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings,
which are incorporated by reference in the prospectus, and, if so directed by
the Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Shares current at the time of receipt of such notice.
The Company shall use its reasonable best efforts and take such actions as are
necessary to render the Advice as soon as practicable.
5. RULE 145.
The Company covenants that it will, for a period beginning upon the
first anniversary of the Effective Time and ending upon the second anniversary
of the Effective Time, file any reports required to be filed by it under the
Securities Act and the Exchange Act and that it will take such further action as
the Holders may reasonably request to the extent required from time to time to
enable the Holders to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 145
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such reporting requirements. If any Holder proposes
to sell Registrable Shares pursuant to Rule 145, the Company shall cooperate
with such Holder to enable such sale to be made in accordance with applicable
laws, rules and regulations,
F-5
the requirements of the Company's transfer agent, and the reasonable
requirements of the broker, if any, through which the sales are proposed to be
executed.
6. REGISTRATION EXPENSES.
All expenses incident to the Company's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, messenger and delivery expenses, printing expenses, internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), all fees and expenses
associated with filings required to be made with the NASD, as may be required by
the rules and regulations of the NASD, fees and expenses of compliance with
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualifications of the Registrable Shares),
rating agency fees, the fees and expenses incurred in connection with the
listing of the securities to be registered on all securities exchanges on which
similar securities issued by the Company are then quoted or listed, fees and
disbursements of counsel for the Company and its independent certified public
accountants, and the fees and expenses of any other Persons retained by the
Company, in connection with the registration hereunder (collectively, the
"REGISTRATION EXPENSES") will be borne by the Company, but not including fees
and expenses of counsel for the Holders and any underwriting, broker or dealer
discounts or commissions attributable to the sale of Registrable Shares (which
are hereinafter referred to as "SELLING EXPENSES"). All Selling Expenses shall
be borne solely by the Holders.
7. INDEMNIFICATION.
(a) Indemnification by the Company. The Company will indemnify and hold
harmless the Holders, their officers, directors, agents (including without
limitation counsel) and employees and each Person who controls the Holders
(within the meaning of the Securities Act or the Exchange Act) (each, a
"CONTROLLING PERSON") from and against any and all losses, claims, damages and
liabilities ("LOSSES") (including without limitation any investigation, legal or
other expenses reasonably incurred in connection with, and, subject to Section
7(d) any amount paid in settlement of, any action, suit or proceeding or any
claim asserted) to which the Holders may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such Losses arise out of, are based upon,
relate to or result from (a) any untrue statement or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment or supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or (b) any violation
by the Company of the Securities Act or the Exchange Act, or other federal or
state law applicable to the Company and relating to any action or inaction
required of the Company in connection with such registration. The Company shall
reimburse the Holders or such officer, director, agent (including without
limitation counsel), employee or Controlling Person for any legal or other
expenses reasonably incurred by such Person in connection with investigating or
defending against any Losses as they are incurred; provided, however, that the
Company will not be liable to a Holder for any Losses if any such Losses arise
out of or are based upon any alleged untrue statement or alleged omission made
in such registration statement, preliminary prospectus, prospectus, or amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Holder specifically for
F-6
use therein. Such indemnity will remain in full force and effect regardless of
any investigation made by or on behalf of the Holders or such officer, director,
agent (including without limitation counsel), employee or Controlling Person,
and will survive the transfer of such securities by the Holders. The Company
will also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such Persons (within the
meaning of the Securities Act or the Exchange Act) to the same extent
customarily requested by such Persons in similar circumstances. Reimbursement
will be made periodically during the course of investigation when bills are
received or expenses incurred, subject to the Holders' obligation to reimburse
the Company pursuant to the Wyoming Business Corporation Act. Notwithstanding
anything to the contrary in this Section 7, the Company shall not be liable for
any untrue statement or omission in any preliminary prospectus if the Company,
sufficiently in advance of Holder's delivery of such preliminary prospectus,
notified Holder of any untrue statement or omission contained therein and
furnished Holder with a corrected preliminary prospectus.
(b) Indemnification by Holder of Registrable Securities. If any Holder
sells Registrable Securities under a prospectus that is part of a registration
statement, then such Holder (the "INDEMNIFYING HOLDER"), agrees, severally, and
not jointly and severally, to indemnify and hold harmless the Company, its
directors and each officer who signed such registration statement, each Person
who controls the Company (within the meaning of the Securities Act and Exchange
Act) under the same circumstances as the foregoing indemnity from the Company to
the Holders to the extent, but only to the extent, that such Losses arise out of
or are based upon any untrue statement of a material fact or omission of a
material fact that was made in the prospectus, any preliminary prospectus, the
registration statement, or any amendment or supplement thereto, in reliance upon
and in conformity with written information relating to the Indemnifying Holder
furnished to the Company by the Indemnifying Holder expressly for use therein.
In no event will the aggregate liability of the Indemnifying Holder exceed the
amount of the net proceeds received by the Indemnifying Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation. Such
indemnity will remain in full force and effect regardless of any investigation
made by or on behalf of the Company or such officer, director, employee or
Controlling Person, and will survive the transfer of such securities by the
Indemnifying Holder. The Company and the Holders will be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the same
extent as customarily furnished by such Persons in similar circumstances.
Notwithstanding anything to the contrary in this Section 7, no Holder selling
Registrable Shares shall be liable for any untrue statement or omission in any
preliminary prospectus or registration statement if prior to the registration
becoming effective or prior to the filing of any amendment or supplement
thereto, such Holder has furnished information in writing to the Company
expressly for use in such registration statement or prospectus or any amendment
thereof or supplement thereto correcting such untrue statement or omission and
such information is not contained in the prospectus or such supplement or
amendment.
(c) Contribution. If the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which Section 7(a) or
7(b) would otherwise apply by its terms (other than by reason of exceptions
provided in Section 7(a) or 7(b), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, will have a several, and not joint
and
F-7
several, obligation to contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the other hand, will be
determined by reference to, among other things, whether any action in question,
including without limitation any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying party
or indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Losses will
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any investigation or proceeding, to the extent such party
would have been indemnified for such expenses if the indemnification provided
for in Section 7(a) or 7(b) was available to such party. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions of
this Section 7(c), no Holder shall be required to contribute an amount greater
than the dollar amount by which the proceeds received by such Holder with
respect to the sale of any Registrable Securities exceeds the amount of damages
which such Holder has otherwise paid or been required to pay by reason of any
and all untrue or alleged untrue statements of material fact or omissions or
alleged omissions of material fact made in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto related to such sale of Registrable Securities.
(d) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification (provided that the
failure to give such notice shall not limit the right of such Person except to
the extent that the indemnifying party is materially prejudiced thereby) and
(ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any Person entitled to indemnification hereunder has the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel will be at the expense of such Person and not of
the indemnifying party unless (A) the indemnifying party has agreed to pay such
fees or expenses, (B) the indemnifying party has failed to promptly assume the
defense of such claim and employ counsel reasonably satisfactory to such Person,
(C) upon the advice of counsel of the Person to be indemnified, a conflict of
interest may exist between such Person and the indemnifying party with respect
to such claims or (D) the indemnified party's counsel shall have advised the
indemnified party that there are defenses available to the indemnified party
that are different from or in addition to those available to the indemnifying
party and that the indemnifying party is not able to assert on behalf of or in
the name of the indemnified party (in which case, if the Person notifies the
indemnifying party in writing that such Person elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party will not have
the right to assume the defense of such claim on behalf of such Person). If such
defense is not assumed by the indemnifying party, the indemnifying party will
not be subject to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). Unless otherwise consented to
by the indemnified party in writing, no indemnifying
F-8
party will consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving to all such
indemnified parties of a full and unconditional release from all liability in
respect to such claim or litigation. Any indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim. As used in this Section, the
terms "indemnifying party," "indemnified party" and other terms of similar
import are intended to include only the Company (and its officers, directors,
employees and each Control Person of the Company as set forth above) on the one
hand, and the Holders (and their officers, directors, agents (including without
limitation counsel) employees and each Control Person of each Holder as set
forth above) on the other hand, as applicable.
8. MISCELLANEOUS.
(a) Binding Effect; Assignability. Unless otherwise provided herein,
the provisions of this Agreement shall be binding upon and accrue to the benefit
of the parties hereto and their respective heirs and legal representatives and
permitted transferees, successors and assigns. Each Holder may assign all or any
part of its rights under this Agreement to any other Holder to whom such Holder
sells, transfers or assigns such Registrable Shares. In the event that the
Holder shall assign its rights pursuant to this Agreement in connection with the
transfer of less than all its Registrable Shares to another Holder, the Holder
shall also retain his rights with respect to its remaining Registrable Shares.
(b) Amendment. This Agreement may be amended or terminated only by a
written instrument signed by the Company and each of the Holders.
(c) Applicable Law. The internal laws of the State of Texas (without
regard to choice of law provisions thereof) shall govern the interpretation,
validity and performance of the terms of this Agreement.
(d) Notices. All notices provided for herein shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
facsimile or by registered or certified mail, postage prepaid:
(i) if to the Company, to:
Front Range Himalaya Corporation
10,000 Memorial Drive, Suite 600
Houston, Texas 77024
Attention: President
Telecopier: (713) 688-0616
(ii) if to the Holders, to the respective addresses set forth
below each Holder's name on the signature pages hereto.
(e) Counterparts. This Agreement may be executed and delivered in one
or more counterparts (including by facsimile transmission), each of which shall
be deemed to be an original and all of which together shall be deemed to be one
instrument.
F-9
(f) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect.
(g) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
[SIGNATURES ON THE FOLLOWING PAGE]
F-10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
FRONT RANGE HIMALAYA CORPORATION
By:
----------------------------------------
Name: James R. Gibbs
Title: President and Chief Executive Officer
F-11
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
HOLLY AFFILIATES:
----------------------------------------
C. Lamar Norsworthy, III
----------------------------------------
Matthew P. Clifton
----------------------------------------
W. John Glancy
----------------------------------------
William J. Gray
----------------------------------------
Marcus R. Hickerson
----------------------------------------
Thomas K. Matthews, II
----------------------------------------
Robert G. Mckenzie
----------------------------------------
Jack P. Reid
----------------------------------------
Paul T. Stoffel
----------------------------------------
Nona Barrett
Betty Simmons East Texas Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
Margaret Simmons East Texas Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
Suzanne Simmons East Texas Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
Betty Simmons Nueces County Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
Margaret Simmons Nueces County Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
Suzanne Simmons Nueces County Trust under
agreement dated 8-1-1941
By: Brown Brothers Harriman Trust
Company of Texas, trustee
By:
----------------------------------------
Harry J. Martin
Authorized Person
NBN Capital Limited Partnership
By: NBN Asset Management Company,
L.L.C.,
its general partner
By:
----------------------------------------
Harry J. Martin
Manager
NBN Asset Management Company, L.L.C.
By:
----------------------------------------
Harry J. Martin
Manager
F-12
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
FRONTIER AFFILIATES:
----------------------------------------
James R. Gibbs
----------------------------------------
Julie H. Edwards
----------------------------------------
W. Reed Williams
----------------------------------------
Douglas Y. Bech
----------------------------------------
T. Michael Dossey
----------------------------------------
James H. Lee
----------------------------------------
Paul B. Loyd, Jr.
----------------------------------------
Carl W. Schafer
----------------------------------------
James S. Palmer
F-13
EXHIBIT A
NAME OF INITIAL HOLDER
F-14
EXHIBIT G
FORM OF FRONTIER AFFILIATE'S RULE 145 AGREEMENT
This FRONTIER AFFILIATE'S RULE 145 AGREEMENT, dated as of March 30,
2003 (this "Agreement") is between Front Range Himalaya Corporation, a Wyoming
corporation ("Parent"), and the undersigned holder (the "Affiliate") of shares
or options to acquire shares of common stock of Frontier Oil Corporation, a
Wyoming corporation (the "Front Range"). Capitalized terms not otherwise defined
in this Agreement have the meanings ascribed to them in the Merger Agreement
referenced below.
RECITALS
A. Parent, Frontier,
Holly Corporation, a Delaware corporation
("Holly") and other parties have entered into an Agreement and Plan of Merger,
dated as of March 30, 2003 (the "Merger Agreement"), pursuant to which Merger
Sub One will merge (the "Frontier Merger") with and into Frontier, with Frontier
surviving the Frontier Merger, on the terms and subject to the conditions set
forth in the Merger Agreement (capitalized terms being used in this Agreement
with the meanings specified in the Merger Agreement);
B. Pursuant to the Merger Agreement, at the Effective Time, outstanding
shares of Frontier Common Stock will be converted into the Frontier Merger
Consideration, consisting of shares of Parent Common Stock;
C. The execution and delivery of this Agreement by Affiliate is a
material inducement to Parent to enter into the Merger Agreement; and
D. Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of Frontier, as such term is used (i) for purposes of paragraphs (c)
and (d) of Rule 145 of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act").
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. ACKNOWLEDGMENTS BY AFFILIATE. Affiliate acknowledges and understands
that the representations, warranties and covenants made by Affiliate set forth
in this Agreement will be relied upon by Parent, Frontier, Holly, and their
respective affiliates and counsel, and that substantial losses and damages may
be incurred by such persons if Affiliate's representations, warranties or
covenants are breached. Affiliate has carefully read this Agreement and the
Merger Agreement and has consulted with such legal counsel and financial
advisers as Affiliate has deemed appropriate in connection with the execution of
this Agreement.
G-1
2. COMPLIANCE WITH RULE 145 AND THE ACT.
(a) Affiliate has been advised that (i) the issuance of shares of
Parent Common Stock in connection with the Frontier Merger is expected to be
effected pursuant to a Registration Statement filed by Parent on Form S-4, and
the resale of such shares will be subject to the restrictions set forth in Rule
145 under the Act unless such shares are otherwise transferred pursuant to an
effective registration statement under the Act or an appropriate exemption from
registration, and (ii) Affiliate may be deemed to be an affiliate of Frontier.
Affiliate accordingly agrees not to sell, pledge, transfer or otherwise dispose
of any shares of Parent Common Stock issued to Affiliate in the Merger, unless
(i) such sale, pledge, transfer or other disposition is made in conformity with
the requirements of Rule 145 under the Act, (ii) such sale, pledge, transfer or
other disposition is made pursuant to an effective registration statement under
the Act, or (iii) Affiliate delivers to Parent a written opinion of counsel, in
form and substance reasonably acceptable to Parent to the effect that such sale,
pledge, transfer or other disposition is otherwise exempt from registration
under the Act.
(b) Parent will give stop transfer instructions to its transfer agent
with respect to any Parent Common Stock received by Affiliate pursuant to the
Frontier Merger and there will be placed on the certificates representing such
Parent Common Stock, or any substitutions therefor, legends stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES, AND MAY ONLY BE TRANSFERRED IN CONFORMITY WITH RULE 145, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, OR IN ACCORDANCE WITH A WRITTEN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, IN FORM AND SUBSTANCE TO THE
EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend), and Parent shall so instruct its transfer
agent, if a registration statement respecting the sale of the shares has been
declared effective under the Act or if Affiliate delivers to Parent (i)
satisfactory written evidence that the shares have been sold in compliance with
Rule 145 (in which case, the substitute certificate will be issued in the name
of the transferee), or (ii) an opinion of counsel, in form and substance
reasonably acceptable to Parent to the effect that sale of the shares by the
holder thereof is no longer subject to Rule 145.
3. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document. Delivery of an executed counterpart of this Agreement
by facsimile shall be effective to the fullest extent permitted by applicable
law.
(b) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties and their respective successors and
assigns. As used in this Agreement,
G-2
the term "successors and assigns" means, where the context to permits, heirs,
executors, administrators, trustees and successor trustees, and personal and
other representatives.
(c) This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with the laws
of the State of Delaware. The parties irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America, in either case located in Wilmington, Delaware
(the "Delaware Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated by this Agreement (and agree not to
commence any litigation relating thereto except in such Delaware Courts), waive
any objection to the laying of venue of any such litigation in the Delaware
Courts and agree not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.
(d) If any term, provision, covenant, or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the terms, provisions, covenants, and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated.
(e) Counsel to the parties to the Merger Agreement shall be entitled to
rely upon this Agreement as needed.
(f) This Agreement shall not be modified or amended, or any right
waived or any obligations excused, except by a written agreement signed by both
parties.
(g) Notwithstanding any other provision contained in this Agreement,
this Agreement and all obligations under this Agreement shall terminate upon the
termination of the Merger Agreement in accordance with its terms.
(h) From and after the Effective Time of the Frontier Merger and as
long as is necessary in order to permit Affiliate to sell Parent Common Stock
held by Affiliate pursuant to Rule 145 and, to the extent applicable, Rule 144
under the Act, Parent will file on a timely basis all reports required to be
filed by it pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, as the same shall be in effect at the time,
and shall otherwise make available adequate public information regarding Parent
in such manner as may be required to satisfy the requirements of paragraph (c)
of Rule 144 under the Act.
[SIGNATURE PAGE FOLLOWS]
G-3
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
FRONT RANGE HIMALAYA CORPORATION, a Wyoming
corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
AFFILIATE
Printed Name:
-------------------------------
Number of Shares of Common Stock owned:
--------------------------------------------
Number of Shares of Common Stock issuable
upon exercise of Stock Options held:
--------------------------------------------
G-4
