WCI » Topics » COVENANTS

This excerpt taken from the WCI 8-K filed Aug 21, 2007.

COVENANTS

Section 3.1 Directors.

(a) The Board has duly adopted a resolution providing that immediately prior to the 2007 Annual Meeting, the size of the Board shall be decreased to 9 members, and such resolution is in full force and effect and shall not be rescinded or modified. A true and correct copy of such resolution has been provided to the Icahn Parties. From and after the date hereof until the completion of the 2007 Annual Meeting, the Company shall take no other action to (i) otherwise change the size (whether by increase or decrease) of the Board, other than as contemplated herein, (ii) amend, in any respect, the certificate of incorporation or bylaws of the Company, other than as contemplated herein, (iii) issue any of its securities to any person, other than pursuant to the Company’s employee benefits and/or incentive plans or agreements existing as of the date hereof, in each case, in the ordinary course of business and consistent with past practice, (iv) make any change to its capital structure, (v) amend the Rights Plan in any respect, other than as contemplated herein, or (vi) enter into any agreement to do any of the foregoing, in each case, without the prior written consent of the Icahn Parties, which consent shall not be unreasonably withheld, conditioned or delayed. The Board has also duly adopted a resolution nominating each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees, for election to the Board at the 2007 Annual Meeting and directing the Company and its officers and agents to solicit votes for the election of each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees in the same manner, and such resolution has not been rescinded or modified. A true and correct copy of such resolution has been provided to the Icahn Parties. The Board has duly adopted a resolution in which it recommends to the Company’s shareholders that they vote for each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees as Directors of the Company at the 2007 Annual Meeting and directing that the Company include this recommendation in its proxy materials (as amended or supplemented) for the 2007 Annual Meeting, and such resolution has not been rescinded or modified. A true and correct copy of such

 

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resolution has been provided to the Icahn Parties. The Company shall cause the proxy used for the 2007 Annual Meeting to solicit authority to vote for each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees at the 2007 Annual Meeting. The Company shall use commercially reasonable efforts to solicit proxies in favor of the election of each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees at the 2007 Annual Meeting. Such nomination, recommendation and solicitation shall be effected in a reasonable manner and shall be undertaken for each such nominee in the same manner. The Icahn Parties will provide, as promptly as reasonably practicable, all information relating to the Icahn Nominees (and other information, if any) to the extent the Icahn Parties are advised by their legal counsel that such information is required under applicable law to be included in the Company’s proxy statement and any other solicitation materials to be delivered to its shareholders in connection with the 2007 Annual Meeting or as may be reasonably requested by the Company. To the extent possible, the Company’s proxy statement and/or soliciting materials for the 2007 Annual Meeting shall contain the same type of information concerning the Icahn Nominees and the Other Stockholders Nominees as provided for the Incumbent Nominees. Notwithstanding anything herein to the contrary, if at any time prior to the 2007 Annual Meeting, the Board becomes aware of any fact with respect to any one or more of the Incumbent Nominees, the Icahn Nominees or the Other Stockholders Nominees that would be required to be disclosed in the Company’s proxy materials (as amended or supplemented) under the Exchange Act and the applicable rules and regulations thereof and which fact is not contained in the Company’s proxy materials (as amended or supplemented), the Company shall immediately notify the Icahn Parties thereof and shall promptly amend or supplement the Company’s proxy materials (as amended or supplemented) as may be required by the Exchange Act and the applicable rules and regulations thereof.

(b) If, prior to the 2009 Annual Meeting, any of the Icahn Nominees once elected at the 2007 Annual Meeting or the 2008 Annual Meeting, as applicable, resigns from the Board or ceases to serve as a Director, then the Icahn Nominating Committee (and no other person, group or entity) shall select a replacement Director to fill the vacancy on the Board and the Icahn Nominating Committee created thereby and shall nominate such replacement Director at the 2008 Annual Meeting, if applicable, and the Company shall take any and all action to fill such vacancy with such replacement Director and the Company shall take any and all action to nominate such replacement Director at the 2008 Annual Meeting, or, subject to the rights of the Icahn Nominating Committee described above, to promptly appoint such replacement director if such vacancy exists after (i) the 2007 Annual Meeting and before the 2008 Annual Meeting or (ii) the 2008 Annual Meeting and before the 2009 Annual Meeting, if applicable. If, prior to the 2009 Annual Meeting, any Incumbent Nominee once elected at the 2007 Annual Meeting or Continuing Incumbent Director elected at the 2008 Annual Meeting, as the case may be, resigns from the Board or ceases to serve as a Director, then the Incumbent Nominating Committee (and no other person, group or entity) shall select a replacement Director to fill the vacancy on the Board and the Incumbent Nominating Committee created thereby and shall nominate such replacement Director at the 2008 Annual Meeting, as applicable, and the Company shall take any and all action to fill such vacancy with such replacement Director and the Company shall take any and all action to nominate such replacement Director at the 2008 Annual Meeting, or, subject to the rights of the Incumbent Nominating Committee described above, to promptly appoint such replacement director if such vacancy exists after (i) the 2007 Annual Meeting and before the 2008 Annual Meeting or (ii) the 2008 Annual Meeting and

 

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before the 2009 Annual Meeting, if applicable. If, prior to the 2009 Annual Meeting, any one or more of the Other Stockholders Nominees once elected at the 2007 Annual Meeting resigns from the Board or ceases to serve as a Director, then the Other Stockholders Nominating Committee (and no other person, group or entity) shall select a replacement Director to fill the vacancy on the Board and the Other Stockholders Nominating Committee created thereby and shall nominate such replacement Director at the 2008 Annual Meeting, as applicable, and the Company shall take any and all action to fill such vacancy with such replacement Director and the Company shall take any and all action to nominate such replacement Director at the 2008 Annual Meeting, or, subject to the rights of the Other Stockholders Nominating Committee described above, to promptly appoint such replacement director if such vacancy exists after (i) the 2007 Annual Meeting and before the 2008 Annual Meeting or (ii) the 2008 Annual Meeting and before the 2009 Annual Meeting, if applicable; provided, that each of the Icahn Nominating Committee and the Incumbent Nominating Committee shall have approved any such replacement director(s) by by majority vote of each such committee; provided, further, that if the Icahn Nominating Committee and the Incumbent Nominating Committee do not so approve of any such person(s) within one (1) month after receipt of the name of the proposed person(s) in accordance with the foregoing proviso, in lieu of the approval right of the Icahn Nominating Committee and the Incumbent Nominating Committee, the entire Board of Directors shall have the right to approve of such person(s) by majority vote. The Company shall take any and all action to nominate such replacement Director at the 2008 Annual Meeting, or, subject to the rights of the Other Stockholders Nominating Committee described above, to promptly appoint such replacement director if such vacancy exists after (i) the 2007 Annual Meeting and before the 2008 Annual Meeting or (ii) the 2008 Annual Meeting and before the 2009 Annual Meeting, if applicable. From the date hereof until immediately following the completion of the 2008 Annual Meeting, the Company shall not oppose or direct, directly or indirectly, any other shareholder to oppose the Continuing Incumbent Directors, the Icahn Nominees or the Other Stockholders Nominees for election at the 2007 Annual Meeting or the 2008 Annual Meeting or nominate or direct, directly or indirectly, any other shareholder to nominate any person for election as director at the 2007 Annual Meeting or the 2008 Annual Meeting other than the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees.

(c) Prior to the completion of the 2007 Annual Meeting, the Company shall not modify any of the current policies applicable to Directors of the Company. Promptly following the date of this Agreement, but in no event later than four (4) business days following the date of this Agreement, the Company shall publicly disclose (in its earnings call or otherwise in a manner reasonably satisfactory to the Icahn Parties) the information set forth on Annex A, which consists of any and all non-public information concerning the Company that prior to the date of such public disclosure has been made available by or on behalf of the Company to the Icahn Parties or any of their affiliates, representatives, advisors, or financing sources, including without limitation, via access to the Company’s data room site established in connection with the Company’s recent auction process, that constitutes material non-public information concerning the Company.

(d) Promptly following the 2007 Annual Meeting, a majority of the Board shall appoint the Chairman and Vice Chairman of the Board and the members of the various committees of the Board.

 

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(e) Each committee of the Board (other than each of the Icahn Nominating Committee and the Other Stockholders Nominating Committee) will include at least one member who is an Incumbent Nominee.

(f) From and after the completion of the 2007 Annual Meeting and until immediately prior to the 2009 Annual Meeting, the Company shall not take any action to increase or decrease the size of the Board without the affirmative vote of 88.88% of the authorized number of Directors.

(g) The Company shall cause the 2007 Annual Meeting to be held on August 30, 2007. The Company shall not postpone or adjourn the 2007 Annual Meeting, or change the record date thereof, without the prior written consent of the Icahn Parties. The Company shall not place any item on the agenda for consideration at the 2007 Annual Meeting (other than the election of directors and the ratification of the appointment of the Company’s independent registered public accounting firm for 2007) without the prior written consent of the Icahn Parties.

Section 3.2 Voting Provisions.

(a) From the date hereof until immediately following the 2008 Annual Meeting, the Icahn Parties shall, and shall cause their Affiliates to, not oppose or direct, directly or indirectly, any other shareholder to oppose the Incumbent Nominees for election at the 2007 Annual Meeting or 2008 Annual Meeting or nominate or direct, directly or indirectly, any other shareholder to nominate any person for election as director at the 2007 Annual Meeting or 2008 Annual Meeting other than the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees (and the Icahn Parties will withdraw its slate of directors in the existing proxy contest with the Company in connection with the 2007 Annual Meeting). Each of the Icahn Parties will, or will cause the record holder or record holders of all shares of Common Stock beneficially owned by the Icahn Parties and their Affiliates to, vote all such shares of the Common Stock as to which the Icahn Parties and their Affiliates have the right to vote at each of the 2007 Annual Meeting and the 2008 Annual Meeting, to be present for quorum purposes and to be voted, at each of the 2007 Annual Meeting and 2008 Annual Meeting or at any adjournments or postponements thereof, in favor of each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees and against any other shareholder nominations which are not approved by the Board; provided, that the Icahn Parties shall not be required to comply with this Section 3.2(a) in the event the Company is subject to a proxy contest by a third party (including S.A.C. Capital Advisors, LLC and Sandell Asset Management Corp., and any other third party, but excluding the Icahn Parties or any Affiliate thereof) seeking to replace the Icahn Nominees or that would have the effect, if successful, of decreasing below 1/3 the percentage of the Icahn Nominee’s representation on the Board.

(b) Notwithstanding anything herein to the contrary, the Icahn Parties shall have no obligations under Section 3.1 or this Section 3.2 if (i) any of the Company’s representations set forth in Section 2.1 are not true and correct (or were not true and correct when made) or (ii) any of the Continuing Incumbent Directors do not (A) nominate and support each of the Continuing Incumbent Directors, the Icahn Nominees and the Other Stockholders Nominees for election at the 2007 Annual Meeting and the 2008 Annual Meeting, (B) vote, at

 

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any meeting of the Board or pursuant to any written consent in lieu of a meeting of the Board, to direct the Company and its officers and agents to solicit votes for the election of each of the Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees at the 2007 Annual Meeting and the 2008 Annual Meeting and (C) recommend that the shareholders of the Company vote to elect as directors of the Company each of the Continuing Incumbent Nominees, the Icahn Nominees and the Other Stockholders Nominees for election at the 2007 Annual Meeting and the 2008 Annual Meeting.

Section 3.3 Additional Undertakings by the Company. The Company shall, simultaneously with the execution of this Agreement, by action of the Board, amend the Company’s by-laws, in form and substance satisfactory to the Icahn Parties, to (i) provide that from the date of the 2007 Annual Meeting until the date of the 2009 Annual Meeting, in addition to any applicable laws, and except as otherwise provided in this Agreement, the affirmative vote of 88.88% of the authorized number of Directors shall be required to increase or decrease the size of the Board; (ii) establish the Icahn Nominating Committee of the Board, the Incumbent Nominating Committee of the Board and the Other Stockholders Nominating Committee of the Board and delegate to the Icahn Nominating Committee, the Incumbent Nominating Committee and the Other Stockholders Nominating Committee, respectively, the power and the authority to (A) fill any vacancies created in the Board and such committee resulting from the resignation or other cessation in service of any Icahn Nominee, any Continuing Incumbent Director, or any Other Stockholders Nominee, respectively, in each case, at any time and from time to time prior to the 2009 Annual Meeting, and (B) nominate for Director any Icahn Nominee, Continuing Incumbent Director or Other Stockholders Nominee, respectively, in each case at the 2008 Annual Meeting; and (iii) provide that the foregoing provisions of the Company’s by-laws can only be amended by the Board and by the affirmative vote of 88.88% of the authorized number of Directors.

Section 3.4 Publicity. Promptly following the execution of this Agreement, the Company and the Icahn Parties shall prepare and issue a joint press release in the form attached hereto as Annex B. Thereafter, except as required by applicable law (as such parties are advised by their legal counsel), the Company and the Icahn Parties shall use their reasonable efforts to consult with each other before issuing any press release or otherwise making any public statement about the execution or terms of this Agreement.

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