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EXHIBIT 99.7
VOTING AGREEMENT
VOTING AGREEMENT, dated as of October 18, 1998 (this "Agreement"), among
the stockholders identified on Annex A (each, a "Stockholder"; collectively, the
"Stockholders") and The Kroger Co., an Ohio corporation ("Kroger").
WHEREAS, Xxxx Xxxxx, Inc., a Delaware corporation ("Xxxx Xxxxx"), Kroger
and Jobsite Holdings, Inc., a Delaware corporation and a wholly owned subsidiary
of Kroger ("Merger Sub"), are contemporaneously entering into an Agreement and
Plan of Merger, dated as of this date (the "Merger Agreement"), which provides,
among other things, for the merger of Merger Sub with and into Xxxx Xxxxx (the
"Merger");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Kroger and Merger Sub have requested that the Stockholders make
certain agreements with respect to certain shares of Common Stock, par value
$.01 per share ("Shares"), of Xxxx Xxxxx beneficially owned by the Stockholders,
upon the terms and subject to the conditions of this Agreement; and
WHEREAS, in order to induce Kroger and Merger Sub to enter into the
Merger Agreement, the Stockholders are willing to make certain agreements with
respect to the Subject Shares (as defined);
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth in this Agreement, the parties agree as
follows:
1. Voting Agreements; Proxy.
(a) For so long as this Agreement is in effect, in any meeting of
stockholders of Xxxx Xxxxx, and in any action by consent of the stockholders of
Xxxx Xxxxx, each Stockholder shall vote, or, if applicable, give consents with
respect to, all of the Subject Shares that are held by that Stockholder on the
record date applicable to the meeting or consent in favor of the Merger
Agreement and the Merger contemplated by the Merger Agreement, as the Merger
Agreement may be modified or amended from time to time in a manner not adverse
to the Stockholders. Each Stockholder shall use his best efforts to cast that
Stockholder's vote or give that Stockholder's consent in accordance with the
procedures communicated to that Stockholder by Xxxx Xxxxx relating thereto so
that the vote or consent shall be duly counted for purposes of determining that
a quorum is present and for purposes of recording the results of that vote or
consent.
(b) Upon the reasonable written request of Kroger, in furtherance of
the transactions contemplated in this Agreement and by the Merger Agreement and
in order to secure the performance of each Stockholder's duties under Section
1(a) of this Agreement, each Stockholder shall promptly execute, in accordance
with the provisions of Section 212 of the Delaware General Corporation Law, and
deliver to Kroger an
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irrevocable proxy, substantially in the form attached as Exhibit A, and
irrevocably appoint Kroger or its designees, with full power of substitution,
its attorney and proxy to vote or, if applicable, to give consent with respect
to, all Shares constituting Subject Shares at the time of the relevant record
date with regard to any of the matters referred to in paragraph (a) above at any
meeting of the stockholders of Xxxx Xxxxx, or in connection with any action by
written consent by the stockholders of Xxxx Xxxxx. Each Stockholder acknowledges
and agrees that this proxy, if and when given, shall be coupled with an
interest, shall constitute, among other things, an inducement for Kroger to
enter into the Merger Agreement, shall be irrevocable and shall not be
terminated by operation of law or otherwise upon the occurrence of any event and
that no subsequent proxies with respect to such Subject Shares shall be given
(and if given shall not be effective); provided, however, that any such proxy
shall terminate automatically and without further action on behalf of the
Stockholders upon the termination of this Agreement.
2. Covenants. For so long as this Agreement is in effect, each
Stockholder agrees not to (i) sell, transfer, pledge, assign, hypothecate,
encumber, tender or otherwise dispose of, or enter into any contract with
respect to the sale, transfer, pledge, assignment, hypothecation, encumbrance,
tender or other disposition of (each such disposition or contract, a
"Transfer"), a number of Subject Shares which, when aggregated with all
Transfers made after the date hereof by other Stockholders who are party to this
Agreement, would exceed 10% of the total number of (A) Subject Shares set forth
on Schedule A hereto plus (B) any Shares the Stockholders then have the right to
acquire, or will have the right to acquire within 60 days, pursuant to options
to purchase Shares granted to the Stockholders by Xxxx Xxxxx; (ii) xxxxx any
proxies with respect to any shares that then constitute Subject Shares, deposit
any of the Subject Shares into a voting trust or enter into a voting or option
agreement with respect to any of the Subject Shares; (iii) subject to Section 6,
directly or indirectly, solicit, initiate, encourage or otherwise facilitate any
inquiries or the making of any proposal or offer with respect to an Acquisition
Proposal (as defined in the Merger Agreement) or engage in any negotiation
concerning, or provide any confidential information or data to, or have any
discussions with any person relating to, an Acquisition Proposal; or (iv) take
any action which would make any representation or warranty of any Stockholder in
this Agreement untrue or incorrect or prevent, burden or materially delay the
consummation of the transactions contemplated by this Agreement; provided,
however, that nothing in the foregoing provisions of this Section 2 shall
prohibit any Stockholder from effecting any Transfer of Subject Shares (A)
pursuant to any bona fide charitable gift or by will or applicable laws of
descent and distribution, (B) for estate planning purposes, if the transferee
pursuant to this clause (B) agrees in writing to be bound by the provisions of
this agreement, or (C) pursuant to a pledge for purposes of securing customary
margin or similar loans or pursuant to the writing of options or in connection
with any hedging, derivative or similar transaction (and taking other necessary
or customary steps related thereto, including, without limitation, Transferring
any certificate evidencing the shares to a lender or trustee or a nominee
thereof), if notwithstanding such Transfer made pursuant to this clause (C),
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the Stockholder retains the power to vote such Shares in accordance with the
terms of this Agreement and for as long as this Agreement is in effect. No
Transfer made pursuant to the proviso of the immediately preceding sentence
shall be counted in determining whether the Stockholders are in compliance with
the 10% limitation set forth in clause (i) of the immediately preceding
sentence. Notwithstanding anything to the contrary contained in this Agreement,
no Stockholder shall effect any Transfer of Subject Shares that would prevent
the business combination to be effected pursuant to the Merger from being
accounted for as a "pooling-of-interests" under GAAP (as defined in the Merger
Agreement) or the rules and regulations of the SEC (as defined in the Merger
Agreement). As used in this Agreement, "person" shall have the meaning specified
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
3. Representations and Warranties of Stockholders. Each Stockholder
severally and not jointly represents and warrants to Kroger that:
(a) Capacity; No Violations. The Stockholder has the legal capacity
to enter into this Agreement and to consummate the transactions contemplated by
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes a valid and binding agreement of the Stockholder
enforceable against the Stockholder in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and general principles of equity
(whether considered in a proceeding in equity or at law). The execution,
delivery and performance by the Stockholder of this Agreement will not (i)
conflict with, require a consent, waiver or approval under, or result in a
breach or default under, any of the terms of any contract, commitment or other
obligation to which the Stockholder is a party or by which the Stockholder is
bound; (ii) violate any order, writ, injunction, decree or statute, or any law,
rule or regulation applicable to the Stockholder or the Subject Shares; or (iii)
result in the creation of, or impose any obligation on the Stockholder to
create, any Lien upon the Subject Shares that would prevent the Stockholder from
voting the Subject Shares. In this Agreement, "Lien" shall mean any lien,
pledge, security interest, claim, third party right or other encumbrance.
(b) Subject Shares. As of the date of this Agreement, the
Stockholder is the beneficial owner of and has the power to vote or direct the
voting of the Subject Shares free and clear of any Liens that would prevent the
Stockholder from voting such Subject Shares. As of the date of this Agreement,
the Subject Shares are the only shares of any class of capital stock of Xxxx
Xxxxx which the Stockholder has the right, power or authority (sole or shared)
to sell or vote, and, other than options or warrants to purchase Shares held by
the Stockholder as of this date, the Stockholder does not have any right to
acquire, nor is it the beneficial owner of, any other shares of any class of
capital stock of Xxxx Xxxxx or any securities convertible into or exchangeable
or exercisable for any shares of any class of capital stock of Xxxx Xxxxx. The
Stockholder is not a party to any
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contracts (including proxies, voting trusts or voting agreements) that would
prevent the Stockholder from voting the Subject Shares.
4. Expenses. Each party to this Agreement shall pay its own
expenses incurred in connection with this Agreement.
5. Specific Performance. The Stockholder acknowledges and agrees
that if he fails to perform any of its obligations under this Agreement,
immediate and irreparable harm or injury would be caused to Kroger for which
money damages would not be an adequate remedy. In that event, the Stockholder
agrees that Kroger shall have the right, in addition to any other rights it may
have, to specific performance of this Agreement. Accordingly, if Kroger should
institute an action or proceeding seeking specific enforcement of the provisions
of this Agreement, the Stockholder hereby waives the claim or defense that
Kroger has an adequate remedy at law and hereby agrees not to assert in that
action or proceeding the claim or defense that a remedy at law exists. The
Stockholder further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any equitable relief.
6. Stockholder Capacity. No person bound by this Agreement who is
or becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his capacity as such director or officer.
Each Stockholder signs solely in his capacity as the beneficial owner of, or the
general partner of a partnership which is the beneficial owner of, that
Stockholder's Subject Shares and nothing herein shall limit or affect any
actions taken by a Stockholder in his or its capacity as an officer or director
of Xxxx Xxxxx to the extent specifically permitted by the Merger Agreement.
Nothing in this Agreement shall be deemed to constitute a transfer of the
beneficial ownership of the Subject Shares by any Stockholder.
7. Registration Rights Agreement. Kroger acknowledges that Xxxx
Xxxxx and the Stockholders are party to a Registration Rights Agreement dated as
of September 9, 1997, as amended by the Amendment to Registration Rights
Agreement dated March 10, 1998 (as amended, the "Stockholder Registration Rights
Agreement") pursuant to which Xxxx Xxxxx agreed to provide certain registration
rights to the Stockholders. Kroger hereby agrees that, effective as of the
Effective Time of the Merger, it shall assume the obligations of Xxxx Xxxxx
under the Stockholder Registration Rights Agreement.
8. Notices. All notices and other communications given or made
pursuant this Agreement shall be in writing and shall be deemed to have been
duly given or made as of the date of receipt and shall be delivered personally
or mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by telecopy, to the applicable
party at the following addresses or telecopy numbers (or at any other address or
telecopy number for a party as shall be specified by like notice):
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If to Kroger:
The Kroger Corp.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
With a copy to:
Fried Xxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Xx., Esq.
Telecopy: (000) 000-0000
If to any Stockholder:
The Yucaipa Companies, LLC
0000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
With a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
9. Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and assigns;
provided, however, that any successor in interest or assignee shall agree to be
bound by the provisions of this Agreement. Nothing in this Agreement, express or
implied, is intended to confer upon
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any Person other than Kroger, the Stockholders or their successors or assigns,
any rights or remedies under, or by reason, of this Agreement.
10. Entire Agreement; Amendments. This Agreement contains the entire
agreement between the Stockholders and Kroger with respect to the subject matter
of this Agreement and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to these transactions. This
Agreement may not be changed, amended or modified orally, but may be changed
only by an agreement in writing signed by the party against whom any waiver,
change, amendment, modification or discharge may be sought.
11. Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party to this Agreement, except that (a) Kroger may assign its rights
and obligations under this Agreement to any of its direct or indirect wholly
owned subsidiaries (including Merger Sub), but no transfer shall relieve Kroger
of its obligations under this Agreement if the transferee does not perform its
obligations, and (b) any Stockholder may transfer Subject Shares to the extent
permitted by Section 2 of this Agreement.
12. Headings. The section headings in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
principles of conflicts of laws.
15. Termination. This Agreement shall terminate automatically and
without further action on behalf of any party at the earlier of (i) the
Effective Time (as defined in the Merger Agreement) and (ii) the date the Merger
Agreement is terminated pursuant to its terms.
16. Subject Shares. The term "Subject Shares" shall mean the Shares
set forth opposite each Stockholder's name on Schedule A hereto, together with
any Shares of capital stock of Xxxx Xxxxx acquired by the Stockholder after the
date hereof over which the Stockholder has the power to vote or power to direct
the voting.
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IN WITNESS WHEREOF, Kroger and the Stockholders have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
THE KROGER CO.
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Name:
Title:
THE YUCAIPA COMPANIES
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
YUCAIPA SSV PARTNERS, L.P.
By: The Yucaipa Companies
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
YUCAIPA SMITTY'S PARTNERS, L.P.
By: The Yucaipa Companies
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
YUCAIPA SMITTY'S PARTNERS II, L.P.
By: The Yucaipa Companies
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
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YUCAIPA ARIZONA PARTNERS, L.P.
By: The Yucaipa Companies
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
F4L EQUITY PARTNERS, L.P.
By: Yucaipa Capital Advisors, Inc.
as general partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, as an individual
FFL PARTNERS
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
YUCAIPA CAPITAL FUND, L.P.
By: Yucaipa Capital Advisors, Inc.
as general partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
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YUCAIPA/F4L PARTNERS
By: The Yucaipa Companies
as general partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
By: Yucaipa Capital Fund, L.P.,
as general partner
By: Yucaipa Capital Advisors, Inc.
as general partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
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SCHEDULE A
STOCKHOLDER NAME SHARES OWNED
---------------- ------------
The Yucaipa Companies................................................. 4,856,211(*)
Yucaipa SSV Partners, L.P............................................. 2,744,595
Yucaipa Smitty's Partners, L.P........................................ 631,400
Yucaipa Smitty's Partners II, L.P..................................... 287,264
Yucaipa Arizona Partners, L.P......................................... 574,522
F4L Equity Partners, L.P.............................................. 3,798,526
Xxxxxx X. Xxxxxx...................................................... 827,321
FFL Partners.......................................................... 365,429
Yucaipa Capital Fund, L.P............................................. 335,712
Yucaipa/F4L Partners.................................................. 79,719
-----------
14,500,699
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(*) Includes 3,869,366 shares issuable upon exercise of a
currently-exercisable warrant.
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EXHIBIT A
IRREVOCABLE PROXY
In order to secure the performance of the duties of the undersigned
pursuant to the Director Voting Agreement, dated as of October 18, 1998 (the
"Voting Agreement") between the undersigned and The Kroger Co., an Ohio
corporation ("Kroger"), a copy of such agreement being attached hereto and
incorporated by reference herein, the undersigned hereby irrevocably appoints
Xxxxxx X. Xxxxxxx, Xxxx X. Xx Xxxxxxx and X. Xxxxxxx Xxxxxx, Jr., and each of
them, the attorneys, agents and proxies, with full power of substitution in each
of them, for the undersigned and in the name, place and stead of the
undersigned, to vote or, if applicable, to give written consent, in such manner
as each such attorney, agent and proxy or his substitute shall in his sole
discretion deem proper to record such vote (or consent) in the manner set forth
in Section 1 of the Voting Agreement with respect to all shares of Common Stock,
par value $.01 per share (the "Shares"), of Xxxx Xxxxx, Inc., a Delaware
corporation (the "Company"), which the undersigned is or may be entitled to vote
at any meeting of the Company held after the date hereof, whether annual or
special and whether or to an adjourned meeting, or, if applicable, to give
written consent with respect thereto. This Proxy is coupled with an interest,
shall be irrevocable and binding on any successor in interest of the undersigned
and shall not be terminated by operation of law or otherwise upon the occurrence
of any event (other than as provided in Section 15 of the Voting Agreement),
including, without limitation, the death or incapacity of the undersigned. This
Proxy shall operate to revoke any prior proxy as to the Shares heretofore
granted by the undersigned. This Proxy shall terminate upon the termination of
the Voting Agreement. This Proxy has been executed in accordance with Section
212 of the Delaware General Corporation Law.
Dated: October __, 1998 ________________________
[Name]
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