Exhibit 99.O
EXECUTION COPY
SETTLEMENT AGREEMENT
--------------------
SETTLEMENT AGREEMENT, dated this 11th day of April, 2005 (the
"Agreement"), between Xxxxxxx Enterprises, Inc., a Delaware corporation
(the "Company"), Xxxxxx X. Xxxxxxx ("Xx. Xxxxxxx"), Appaloosa Management
L.P., Formation Capital LLC, Franklin Mutual Advisers, LLC and Northbrook
NBV, LLC (collectively, the "Consortium Members" and each, individually, a
"Consortium Member"). Terms used and not otherwise defined herein shall
have the meaning attributed to such terms in the Confidentiality Agreement
(as defined below).
RECITALS
WHEREAS, the Company has scheduled its 2005 Annual Meeting of
Stockholders (the "2005 Annual Meeting") for April 21, 2005;
WHEREAS, Xx. Xxxxxxx filed with the Securities and Exchange Commission
(the "SEC") a definitive proxy statement on March 14, 2005, for the
election at the 2005 Annual Meeting of a slate of nominees to the Company's
Board of Directors (the "Board") and certain other proposals;
WHEREAS, the Company, Xx. Xxxxxxx and the Consortium Members have
determined that the interests of the Company and its stockholders would
best be served (i) by the Consortium Members not engaging in a solicitation
of proxies for the purpose of electing Xx. Xxxxxxx'x nominees to the Board
at the 2005 Annual Meeting, (ii) by Xx. Xxxxxxx not nominating any
individuals for election as directors at the 2005 Annual Meeting and (iii)
by the parties' entering into the arrangements set forth herein; and
WHEREAS, the Company and the Consortium Members have signed, in
conjunction with this Agreement, a confidentiality agreement, dated April
11, 2005 (the "Confidentiality Agreement"), in contemplation of a Possible
Transaction (as defined in the Confidentiality Agreement).
AGREEMENT
NOW THEREFORE, and in consideration of the foregoing premises and the
mutual covenants, representations and warranties contained herein, the
Company, Xx. Xxxxxxx and the Consortium Members agree as follows:
1. Company Agreement to Amend Rights Plan.
--------------------------------------
The Company agrees that, promptly, but in any event within five (5)
business days, after the execution and delivery of this Agreement, it will
cause its Rights Agreement, dated as of January 26, 2005 (as amended, the
"Rights Agreement"), to be amended substantially as set forth on Exhibit A.
Within two (2) business days after such amendment becomes effective, the
Company shall file a copy of such amendment with the Securities and
Exchange Commission (the "SEC") as an amendment to the Registration
Statements on Form 8-A previously filed by the Company with respect to the
Rights Agreement. Prior to October 21, 2005, the Company shall not adopt
any amendment to the Rights Agreement (or adopt any replacement rights
plan) containing provisions inconsistent with, or that would have the
effect of repealing, the provisions in the amendment set forth on Exhibit
A.
The Company represents and warrants that its Board has duly and
validly adopted the resolutions dated March 21, 2005, filed as Exhibit 99.1
to the Current Report on Form 8-K filed by the Company with the SEC on
March 23, 2005 (the "March 21, 2005 Resolutions"), and the resolutions
effective as of March 25, 2005, filed as Exhibit 99.1 to the Current Report
on Form 8-K filed by the Company with the SEC on April 7, 2005 (the "March
25, 2005 Resolutions" and, together with the March 21, 2005 Resolutions,
the "Board Resolutions"). The Company agrees that it will fully comply with
the provisions of, and take all actions contemplated by, the Board
Resolutions, including taking all actions necessary to convene the Special
Meeting (as defined in the Board Resolutions) as contemplated by the Board
Resolutions if the requisite notifications are received as contemplated
thereby. The Company represents and warrants that each of the directors of
the Company shall resign as a director of the Company effective immediately
prior to the tabulation of the votes for new directors at the Special
Meeting, if held; provided that, in the event of any dispute with respect
to the results of the election, the then current directors shall remain in
office until the final tabulation has been completed and all disputes
resolved.
Except as set forth herein, the Company shall not at any time on or
prior to the Special Meeting adopt, amend, modify or revoke the Board
Resolutions or any bylaw of the Company or take any other action so as to
alter in any way any of the voting requirements or provisions applicable to
the Special Meeting Demands (as defined in the March 25, 2005 Resolutions),
the Special Meeting Notice (as defined in the March 21, 2005 Resolutions)
or the Special Meeting.
The Company and its Board hereby agree and acknowledge that it shall
not be necessary for any stockholder of the Company to comply with the
advance notice bylaws of the Company (including the provisions contained
Article II, Sections 15 and 16 of the Company's Bylaws) in order to
nominate candidates for election at the Special Meeting, compliance with
such Bylaws having been duly and validly waived by the Company and its
Board. The Board shall not expand its size to be greater than eight (8) at
any time prior to October 22, 2005.
2. Request for Section 220 Information.
-----------------------------------
The Company shall provide to Xx. Xxxxxxx or the Consortium Members, as
promptly as reasonably practicable after the receipt by the Company from
any of them of a request therefor, copies of all of the records and other
information in the possession of the Company or its Representatives (as
defined in the Confidentiality Agreement) contemplated by Section 220 of
the Delaware General Corporation Law in the same manner and to the same
extent similar information was provided in connection with the 2005 Annual
Meeting.
3. Termination of the Proxy Contest.
--------------------------------
Xx. Xxxxxxx and each Consortium Member agree that, promptly after the
execution and delivery of this Agreement, it will take all actions
necessary to discontinue the solicitation of proxies in connection with the
2005 Annual Meeting (the "Annual Meeting Proxy Solicitation"). Xx. Xxxxxxx
further agrees not to nominate any individuals for election as directors at
the 2005 Annual Meeting. Within five (5) business days following receipt of
the documentation thereof, the Company shall reimburse the Consortium
Members for all out-of-pocket fees and expenses incurred by them and Xx.
Xxxxxxx in connection with the Annual Meeting Proxy Solicitation and the
negotiation and execution of this Agreement and all related activities,
provided that such reimbursement shall not exceed $600,000, in the
aggregate.
4. Postponement of the Special Meeting.
-----------------------------------
In the event that Xx. Xxxxxxx or any of the Consortium Members (i)
files a preliminary proxy statement in respect of the election of directors
at the Special Meeting no later than September 9, 2005, (ii) provides to
the Secretary of the Company by September 9, 2005, a Nomination Notice (as
defined in the March 25 Resolutions) signed by or on behalf of the
beneficial owners of not less than 5% of the issued and outstanding shares
of Company common stock and (iii) thereafter uses its reasonable best
efforts to cause such proxy statement to become definitive but is unable to
cause the proxy statement to become definitive by September 26, 2005, the
Company and its Board of Directors shall take all action necessary to
postpone the date of the Special Meeting to a date reasonably requested by
any of the Consortium Members; provided that the Company need not hold the
Special Meeting unless the Secretary of the Company receives a Special
Meeting Notice or one or more Special Meeting Demands from beneficial
owners of at least 20% of the Company's issued and outstanding common
stock; provided further, that, in any event, the Company need not postpone
the date of the Special Meeting to a date that is more than (i) thirty (30)
days after the date Xx. Xxxxxxx or any Consortium Member files with the SEC
a definitive proxy statement with respect to the Special Meeting or (ii) 90
days following the filing by Xx. Xxxxxxx or the Consortium Members of the
first preliminary proxy statement with respect to the Special Meeting. It
is understood and agreed that the Company shall not be required to postpone
the Special Meeting on more than one occasion.
5. Public Statements.
-----------------
The parties shall consult with each other before issuing any press
release or making any public statement with respect to this Agreement, the
Confidentiality Agreement and the negotiations related hereto or thereto
and, subject to the provisions of Section 2(c) of the Confidentiality
Agreement, shall not issue any such press release or make any such public
statement without the prior consent of the other party, which shall not be
unreasonably withheld or delayed, except as may be required by applicable
law or any listing agreement with any national securities exchange. The
provisions contained in this Section 5 shall terminate upon the earlier of
(x) the delivery to the Company of Special Meeting Demands, a Special
Meeting Notice or a Nomination Notice or (y) the filing with the SEC of a
preliminary proxy statement by the Company, Xx. Xxxxxxx or any of the
Consortium Members with respect to the solicitation of Special Meeting
Demands or the Special Meeting; provided, that in no event shall the
provisions of this paragraph terminate before August 21, 2005.
6. No Waiver of Rights.
-------------------
It is understood and agreed that no failure or delay by any party
hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
7. Remedies.
--------
It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by any party hereto and
that each party hereto shall be entitled to equitable relief, including,
without limitation, injunction and specific performance, as a remedy for
any such breach any other party. Such remedies shall not be deemed to be
the exclusive remedies for a breach by a party of this Agreement but shall
be in addition to all other remedies available at law or equity to the
other parties hereto. Each of the parties hereto further agrees not to
raise as a defense or objection to the request or granting of such relief
that any breach of this Agreement is or would be compensable by an award of
money damages, and each party hereto agrees to waive any requirements for
the securing or posting of any bond or other security in connection with
such remedy.
8. Governing Law.
-------------
This Agreement is for the benefit of the parties hereto, and shall be
governed by and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within
the State of Delaware, without regard to the conflict of law provisions
thereof. Each party hereto hereby irrevocably and unconditionally consents
to submit to the exclusive jurisdiction of the Chancery Court of the State
of Delaware for any actions, suits or proceedings arising out of or
relating to this Agreement and the transactions contemplated hereby (and
each party hereto agrees not to commence any action, suit or proceeding
relating thereto except in such courts, and further agrees that service of
any process, summons, notice or document by U.S. registered mail to its
address set forth above shall be effective service of process for any
action, suit or proceeding brought against you in any such court). Each
party hereto hereby irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the Chancery Court of the State of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
9. Entire Agreement.
----------------
This Agreement and the Confidentiality Agreement contain the entire
agreement between Xx. Xxxxxxx, the Consortium Members and the Company
regarding their subject matter and supersede all prior agreements,
understandings, arrangements and discussions between the Consortium Members
and the Company regarding such subject matter.
10. No Modification.
---------------
No provision in this Agreement can be waived, modified or amended
except by written consent of Xx. Xxxxxxx, the Consortium Members and the
Company, which consent shall specifically refer to the provision to be
waived, modified or amended and shall explicitly make such waiver,
modification or amendment.
11. Counterparts.
------------
This Agreement may be signed by facsimile and in one or more
counterparts, each of which shall be deemed an original but all of which
shall be deemed to constitute a single instrument.
12. Severability.
------------
If any provision of this Agreement is found to violate any statute,
regulation, rule, order or decree of any governmental authority, court,
agency or exchange, such invalidity shall not be deemed to affect any other
provision hereof or the validity of the remainder of this Agreement, and
such invalid provision shall be deemed deleted herefrom to the minimum
extent necessary to cure such violation.
13. Successors.
----------
This Agreement shall inure to the benefit of, and be enforceable by,
the Company and each of Xx. Xxxxxxx and the Consortium Members and their
respective successors and assigns.
14. No Third Party Beneficiaries.
----------------------------
The parties hereto each agree and acknowledge that nothing herein
expressed or implied is intended to confer upon or give any rights or
remedies to persons not party to this Agreement under or by reason of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first set forth above.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
and Chief Administrator
and Legal Officer and
Secretary
CONFIRMED AND AGREED
as of the date written above:
APPALOOSA MANAGEMENT L.P.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
FORMATION CAPITAL LLC
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer and Co-Chairman
FRANKLIN MUTUAL ADVISERS, LLC
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
NORTHBROOK NBV, LLC
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Manager
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Exhibit A
---------
Amendment No. 1 to Rights Agreement