AGREEMENT AMONG INITIAL STOCKHOLDERS AND MAC INC.
THIS AGREEMENT, dated November 3, 1995, is made
and entered into among Empire Gas Corporation, a Missouri
corporation ("Empire"), Northwestern Public Service
Corporation, a Delaware ("NWPS"), and Myers Acquisition
Company, a Delaware corporation ("MAC"), with respect to
the following facts:
A. Empire currently is engaged in the
business of distributing and selling at retail liquefied
petroleum ("LP") gas and appliances, and has a management
experienced in the operation of such business.
B. Northwestern Public Service Company
("NWPS") has as one of its objectives the making of
investments that could benefit NWPS and its stockholders.
C. Empire and NWPS, acting together, have
made a successful bid to acquire the LP gas distribution
and appliance business of Myers Propane Gas Company
("Myers"- such acquisition being hereinafter called the
"Myers Acquisition"). Empire and NWPS have contemplated,
in their bidding for the Myers Acquisition, that they
will rely principally on Empire for management expertise
and on NWPS to provide or arrange the financing for the
Myers Acquisition, and that the success of the Myers
Acquisition will depend in part upon the cost savings and
operating improvements expected to be achieved by having
Empire do the planning and management of the business of
Myers and its subsidiaries, under the direction of the
Board of Directors of MAC.
D. Empire and NWPS have caused MAC to be
incorporated to serve as the vehicle for making the Myers
Acquisition.
E. Empire and NWPS, on behalf of MAC, are
concluding the negotiation of the definitive agreement
(the "Myers Agreement of Merger") for the Myers
Acquisition, and need to provide for (i) the initial
capitalization of MAC, (ii) the management of MAC and
(iii) for certain matters pertaining to the ownership of
shares of stock of MAC.
NOW THEREFORE, in consideration of the premises
and the agreements exchanged herein. the parties hereto
agree as follows:
ARTICLE 1: INITIAL CAPITALIZATION OF MAC;
STOCK SUBSCRIPTIONS AND RESERVATIONS OF STOCK
SECTION 1.01 INITIAL AUTHORIZED STOCK OF MAC.
MAC has been incorporated by Empire and NWPS with an
initial authorized capitalization (as set forth in
Article IV of MAC's Certificate of Incorporation, a true
and complete copy of which is attached hereto as Exhibit
A), consisting of 1,000 shares of common stock, par value
$1 per share (the "Common Stock"; and 4,000 shares of
preferred stock, par value $ 1,000 per share, issuable in
one or more series (the "Preferred Stock"). The 1,000
shares of common stock and 4,000 shares of Preferred
Stock referred to herein shall only be increased with
their prior written agreement of Empire and NWPS.
SECTION 1.02 SUBSCRIPTIONS AND OPTION FOR
STOCK. NWPS has previously purchased, and hereby
subscribes for. stock of MAC, and Empire hereby
subscribes for stock of MAC, as follows:
(a) MAC and NWPS acknowledge that NWPS has
purchased from MAC, and MAC has sold and issued to
NWPS, 51 shares of Common Stock for a cash purchase
price of $51 which has been paid by NWPS to MAC, and
that these shares are the only shares of stock of
MAC that are currently outstanding.
(b) NWPS hereby subscribes for, and agrees to
purchase from MAC, and MAC hereby agrees to sell and
issue to NWPS, 2,300 shares of Series A Voting
Preferred Stock for purchase price of $ 1,000 per
share ($2,300,000 total), with this transaction to
be consummated at the Closing of the Myers
Acquisition. NWPS will deliver to MAC $1,150,000 of
its own common stock and 11,500 shares of 6 1/2%
series of NWPS preferred stock, $100 par value with
a combined value of $2,300,000 in fulfillment of its
purchase obligation.
(c) Empire hereby subscribes for, and agrees
to purchase from MAC, and MAC hereby agrees to issue
and sell to Empire, 49 shares of Common Stock (which
shall represent 49% of the issued and outstanding
Common Stock) for a cash purchase price of $49 to be
paid at the time of such issuance, with this
transaction to be consummated at the closing of the
Myers Acquisition.
SECTION 1.03 ACQUISITION FOR INVESTMENT.
Empire and NWPS each represent and warrant to the other,
and to MAC, as follows: It has (through its management
personnel) such knowledge and experience in financial and
business matters that it is capable of evaluating the
merits and risks of its purchase of securities of MAC as
provided for in this Agreement; it is acquiring such
securities, and will acquire them, for investment and not
with a view toward, or with any intention of,
distributing or selling any of the securities and it will
not sell or offer to sell or otherwise transfer any of
the securities in violation of the Securities Act of
1933, as amended.
ARTICLE 2: MYERS ACQUISITION
Each of the parties hereto will make a
commercially reasonable effort in cooperation with the
other parties hereto, to do those things within its
control to consummate the Myers Acquisition in accordance
with the terms of and subject to the conditions in, the
Myers Agreement of Merger. Nothing in this Agreement or
otherwise shall be construed to give anyone who is not a
party to this Agreement, whether under a third party
beneficiary legal doctrine or otherwise, a right to
enforce the provisions of this Article or to obtain
relief for any failure to perform in accordance with the
requirements of this Article.
ARTICLE 3: MANAGEMENT OF MAC
SECTION 3.01 At or before the Closing (as
defined in the Myers Agreement of Merger), the parties
hereto will enter into a management agreement in
substantially the form attached hereto as Exhibit B, or
with such changes therein as the parties hereto hereafter
agree upon (the "Management Agreement"), pursuant to
which the planning and management of the business of MAC
subsequent to the Closing (as defined in the Myers
Agreement of Merger) will be conducted by Empire under
the direction of the Board of Directors of MAC, as
provided therein.
SECTION 3.02 DIRECTORS AND OFFICERS OF MAC.
(a) For purposes of this Agreement, "Control
Period" means the period of time commencing on the
date of this Agreement and continuing either (i)
until this Agreement is terminated pursuant to
Section 5.02 herein because of the termination of
the Myers Agreement of Merger without the Myers
Acquisition having been completed or (ii) until (A)
NWPS no longer owns a majority of the shares of both
the Common Stock and Preferred Stock of MAC deemed
to be outstanding, (B) Empire no longer owns at
least 49% of the shares of Common Stock of MAC
deemed to be outstanding or (C) when MAC consummates
an underwritten public offering of partnership units
or shares of its Common Stock, registered under the
Securities Act of 1933, whichever of (A), (B), or
(C) first occurs.
(b) Throughout the Control Period, NWPS and
Empire shall vote their voting shares of stock of
MAC that are capable of being voted, and will
otherwise use their respective commercially
reasonable efforts, to carry out the following:
(i) the Board of Directors of MAC shall
consist of six members, five of whom shall be
nominees of NWPS (the "NWPS Positions") and one
of whom shall be a nominee of Empire (the
"Empire Position"); and any vacancies occurring
in the NWPS Positions will be promptly filled
with nominees of NWPS and any vacancy occurring
in the Empire Position will be promptly filled
with a nominee of Empire.
(ii) The officers of MAC shall include at
all times a Chairman of the Board, who will be
a person nominated by NWPS, and a President and
Chief Executive Officer, who will be a person
nominated by Empire. The authority and duties
of such officers shall be as set forth in the
bylaws of MAC, a true and complete copy of
which as in effect on the date hereof is
attached hereto as Exhibit C.
(c) To initiate compliance with preceding
paragraph (b), Empire and NWPS have caused the
following persons to be elected to the positions
with MAC indicated by their names, to serve for the
period provided in the bylaws of MAC:
* Chairman of the Board -- Paul S. Lindsey, Jr.
(an NWPS nominee for such positions);
* President and Chief Executive Officer -- Dan P.
Binning (an Empire nominee for such positions);
* Vice Chairman -- Daniel K. Newell (NWPS nominee
for such position);
* Secretary and Director -- Valeria Schall (NWPS
nominee for such position);
* Director -- Rogene A. Thaden (NWPS nominee for
such position);
with the fifth and sixth member of the Board of Directors
of MAC (two NWPS Positions) to be nominated by NWPS, and
elected, at a future time when NWPS has selected the
nominee for such position.
ARTICLE 4: DISPOSITION OF MAC STOCK BY EMPIRE OR NWPS
SECTION 4.01 PERMITTED DISPOSITIONS.
(a) NWPS may at any time or from time to time
transfer any of the securities issued by MAC which
NWPS may own at any time to any wholly-owned
subsidiary of NWPS, provided that notice of such
transfer is given to the other parties to this
Agreement and that the transferee becomes a party to
this Agreement with respect to the securities so
transferred, but all of such transferees and NWPS
shall collectively act, and be treated, as a single
entity with NWPS acting as their representative for
purposes of this Agreement.
(b) Empire may at any time and from time to
time transfer any of the securities issued by MAC
which Empire may own at any time to any affiliated
party, provided that notice of such transfer is
given to the other parties to this Agreement and the
transferee becomes a party to this Agreement with
respect to the securities so transferred, but all
such transferees and Empire shall collectively act,
and be treated, as a single entity with Empire
acting as their representative for purposes of this
Agreement.
SECTION 4.02 RIGHTS OF FIRST REFUSAL.
(a) Except as permitted by Section 4.01(b)
herein, so long as the Management Agreement is in
effect, Empire will not sell or otherwise dispose of
any shares of Common Stock of MAC, or any other
securities convertible into such shares, to any
party without first offering the same for sale to
NWPS in writing on the same terms as are offered to
or by the other party (with full disclosure of such
terms to NWPS) and allowing not less than 30 days
after its receipt of the offer for NWPS to accept
the offer; and if such offer is accepted by NWPS,
NWPS shall have 90 days in which to complete the
purchase on such terms.
(b) Except as permitted by Section 4.01(a)
herein, so long as the Management Agreement is in
effect, NWPS will not sell or otherwise dispose of
any shares of Common Stock of MAC, or any other
securities convertible into such shares to any party
without first offering the same for sale to Empire
in writing on the same terms as are offered to or by
the other party (with full disclosure of such terms
to Empire) and allowing Empire not less than 30 days
after its receipt of the offer for Empire to accept
the offer, and if such offer is accepted by Empire,
Empire shall have 90 days in which to complete the
purchase on such terms.
ARTICLE 5: MISCELLANEOUS
SECTION 5.01 RESTRICTIVE LEGEND. Each
certificate issued by MAC to evidence shares of Common
Stock, or securities convertible into such shares, owned
by either Empire or MAC shall be endorsed with the
following legend:
"The shares represented by this certificate are
subject to the Agreement among the Corporation
and its Initial Stockholders, dated as of
November 1995, as the same may be amended, on
file with the issuing Corporation at its
principal business office and may be
transferred or otherwise disposed of only in
accordance therewith."
SECTION 5.02 TERM OF THIS AGREEMENT. This
Agreement, if not sooner terminated by agreement of the
parties hereto or pursuant to the next sentence, shall
terminate when the Control Period terminates. In the
event the Myers Agreement of Merger is terminated without
the Myers Acquisition haying been completed, the parties
hereto will liquidate and dissolve MAC as promptly as
possible when all obligations of MAC under, or with
respect to, the Myers Agreement of Merger have been
discharged or provided for, and this Agreement shall then
automatically terminate.
SECTION 5.03 NOTICES. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been given (a) when delivered in person,
(b) one business day after deposit with a nationally
recognized overnight courier service or (c) the business
day on which it is sent and received by facsimile, as
follows:
(i) If to MAC, to:
Myers Acquisition Company
c/o Northwestern Public Service Company
33 Third Street, S.E.
Huron, South Dakota 57350
Fax No. (605) 353-8286
Attention: Rogene Thaden, Treasurer
and to
Myers Acquisition Company
c/o Empire Gas Corporation
1700 Jefferson Street
Lebanon, Missouri 65536
Attention: Valeria Schall, Vice President
(ii) If to Empire, to:
Empire Gas Corporation
P.O. Box 303
1700 South Jefferson
Lebanon, Missouri 65536
Fax No. (417) 532-8529
Attention: Paul S. Lindsey, Jr., President
(iii) If to NWPS, to:
Northwestern Public Service Company
33 Third Street, S.E.
Huron, South Dakota 57350
Fax No. (605) 353-8286
Attention: Daniel K. Newell,
Vice President-Finance
SECTION 5.04 CAPTIONS. The captions in this
Agreement are included for convenience of reference only
and shall be ignored in the construction and
interpretation of this Agreement.
SECTION 5.05 GOVERNING LAW. This Agreement
shall be construed in accordance with and governed by the
internal laws of the State of Delaware without regard to
the choice of law principles thereof
SECTION 5.06 COUNTERPARTS. Execution of
separate copies of this Agreement by each or some of the
several parties hereto shall have the same force and
effect as though all such parties had executed the
original of this Agreement. Further, the parties hereto
may execute several counterparts of this Agreement, all
of which shall constitute but one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto
have caused this Agreement to be executed in its name as
of the date first above written.
EMPIRE GAS CORPORATION
By /s/ Paul S. Lindsey, Jr.
__________________________
President
NORTHWESTERN PUBLIC SERVICE
COMPANY
By /s/ Daniel K. Newell
___________________________
Title:
MYERS ACQUISITION COMPANY
By /s/ Valeria Schall
____________________________
Title: