This Rights Agreement (the “Agreement”), dated as of July 19, 2006, between Valero GP Holdings, LLC, a Delaware limited liability company (the “Company”), and Computershare Investor Services, LLC (the “Rights Agent”).
The Board of Directors of the Company has authorized and declared a distribution of one preferred unit purchase right (a “Right”) for each Unit (as hereinafter defined) of the Company outstanding as of the close of business (as hereinafter defined) on July 19, 2006 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Unit (as hereinafter defined) of the Company, upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Unit that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the Units of the Company then outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any Initial Member (as such term is defined in the LLC Agreement), (iv) any Affiliate or Associate of any Initial Member, (v) any employee benefit plan of the Company or any Subsidiary of the Company, or (vi) any entity holding Units for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Units by the Company which, by reducing the number of units outstanding, increases the proportionate number of units beneficially owned by such Person to 15% or more of the Units of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Units of the Company then outstanding by reason of unit purchases by the Company and shall, after such unit purchases by the Company, become the Beneficial Owner of any additional Units of the Company, then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Units so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.