EXHIBIT 2
STOCK OPTION AGREEMENT, dated as of the 31st day of March, 1999 (this
"Agreement"), between Atlantic Richfield Company, a Delaware corporation
("Issuer"), and BP Amoco p.l.c., an English public limited company (including
any assigns permitted under Section 11 hereof, "Grantee").
RECITALS
A. The Merger Agreement. Contemporaneously with the entry into this
Agreement and the grant of the Option (as defined in Section 1(a)), Issuer,
Grantee, and Prairie Holdings, Inc., a Delaware corporation and a wholly-owned
subsidiary of Grantee ("Merger Sub"), are entering into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which
Grantee and Issuer intend to effect the Merger (as defined in the Merger
Agreement).
B. The Stock Option Agreement. As an inducement and condition to
Grantee's willingness to enter into the Merger Agreement, and in consideration
thereof, the board of directors of Issuer has approved the grant to Grantee of
the Option pursuant to this Agreement and the acquisition of Common Stock (as
defined below) by Grantee pursuant to this Agreement; provided, that such grant
was expressly conditioned upon, and made to have no effect until after,
execution and delivery by Issuer, Grantee and Merger Sub of the Merger
Agreement.
C. Capitalized Terms. Capitalized terms used herein but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. The Option. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms hereof, up
to 64,861,617 fully paid and nonassessable shares ("Option Shares") of common
stock, par value $2.50 per share, of Issuer ("Common Stock") at a price per
share in cash equal to $82.82 (subject to adjustment in accordance with this
Agreement, the "Option Price"); provided, however, that in no event shall the
number of Option Shares exceed 19.9% of the shares of Common Stock issued and
outstanding at the time of exercise (without giving effect to the Option Shares
issued or issuable under the Option) (the "Maximum Applicable
Percentage"). The number of Option Shares purchasable upon exercise of the
Option and the Option Price are subject to adjustment as set forth herein.
(b) In the event that any additional shares of Common Stock are issued
or otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement), the aggregate number of Option Shares purchasable
upon exercise of the Option shall automatically be increased (without any
further action on the part of Issuer or Grantee being necessary) so that, taking
into consideration any such issuance, such aggregate number equals the Maximum
Applicable Percentage.
(c) The Option Price with respect to the Option Shares as to which
Grantee may propose to exercise this Option pursuant to Section 2, or to request
the repurchase of this Option by Issuer pursuant to Section 9 (in either case,
the "Proposed Exercise Shares"), shall not be greater than, and shall be
adjusted downward to the extent necessary to be, the Maximum Option Price (as
defined below). The "Maximum Option Price" with respect to any Proposed Exercise
Shares shall be that price per share in cash at which the Option must be
exercisable in order to result in a Total Profit (as defined in Section 19) to
Grantee, determined as of the date of such proposal, of $25,000,000, assuming
for such purpose that this Option were exercised on such date for all of the
Option Shares subject to this Option and that all of such Option Shares were
sold for cash at the closing market price on the New York Stock Exchange, Inc.
(the "NYSE") for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions); provided that the Maximum
Option Price may not be less than the par value per share of the Common Stock.
2. Exercise; Closing. (a) Conditions to Exercise; Termination. Grantee
may exercise the Option, in whole but not in part (except as provided in Section
14 and Section 19), by giving a written notice thereof as provided in Section
2(d) within 180 days following the occurrence of a Triggering Event (as defined
in Section 2(b)) unless prior to the giving of such notice the Effective Time
(as defined in the Merger Agreement) shall have occurred. The Option shall
terminate upon either (i) the occurrence of the Effective Time or (ii) the close
of business on the earlier of (x) the date 180 days after the date on which a
Triggering Event occurs and (y) the date on which it is no longer possible for a
Triggering Event to occur, provided
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that no Triggering Event shall have occurred prior to or upon such date.
(b) Triggering Event. A "Triggering Event" shall have occurred if the
Merger Agreement is terminated and Grantee then or thereafter becomes entitled
to receive an aggregate of $450,000,000 (taking into account any amounts to
which Grantee will have theretofore become entitled) as the ARCO Termination
Amount pursuant to Section 5.5.2 of the Merger Agreement.
(c) Notice of Triggering Event by Issuer. Issuer shall notify Grantee
promptly in writing of the occurrence of any Triggering Event and the number of
shares of Common Stock issued and outstanding as of the date of such notice, it
being understood that the giving of such notice by Issuer shall not be a
condition to the right of Grantee to exercise the Option.
(d) Notice of Exercise by Grantee. If Grantee shall be entitled to and
wishes to exercise the Option, it shall send to Issuer a written notice (an
"Exercise Notice" and the date of which is referred to herein as the "Notice
Date") specifying (i) the total amount payable to Issuer on the exercise of the
Option in respect of the Option Shares and (ii) a place and date (the "Closing
Date") not earlier than three business days nor later than 60 business days from
the Notice Date for the closing of such purchase (the "Closing"); provided, that
if a filing is required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), or prior notification to or application for
approval of any other regulatory authority in the U.S., U.K. or elsewhere is
required in connection with such purchase, Grantee and Issuer, as required,
promptly after the giving of the Exercise Notice shall file any and all required
notices, applications or other documents necessary for approval and shall
expeditiously process the same and in such event the period of time referred to
in clause (ii) shall commence on the date on which Grantee furnishes to Issuer a
supplemental written notice setting forth the Closing Date, which notice shall
be furnished as promptly as practicable after all required notification periods
shall have expired or been terminated and all required approvals shall have been
obtained and all requisite waiting periods shall have passed. Each of Grantee
and the Issuer agrees to use its best reasonable efforts to cooperate with and
provide information to Issuer or Grantee, as the case may be, with respect to
any required
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filing, notice or application for approval to such regulatory authority.
(e) Payment of Purchase Price. At the Closing, Grantee shall pay to
Issuer the aggregate Option Price for the Option Shares in immediately available
funds by a wire transfer to a bank account designated by Issuer; provided, that
failure or refusal of Issuer to designate such a bank account shall not preclude
Grantee from exercising the Option.
(f) Delivery of Common Stock. At the Closing, simultaneously with the
payment of the purchase price by Grantee, Issuer shall deliver to Grantee or
such other Person as Grantee may nominate in writing, a certificate or
certificates representing the number of Option Shares purchased by Grantee. If
at the time of issuance of the Option Shares hereunder, Issuer shall have issued
any rights or other securities which are attached to or otherwise associated
with the Common Stock, then each Option Share shall also represent such rights
or other securities with terms substantially the same as, and at least as
favorable to Grantee as, are provided under any shareholder rights agreement or
similar agreement of Issuer then in effect.
(g) Resale Restriction. The Grantee will not sell or transfer any
Option Shares or other securities acquired by Grantee upon exercise of the
Option except pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or in a transaction
exempt from registration under the Securities Act. Each certificate for Common
Stock delivered at the Closing may be endorsed with a restrictive legend that
shall read substantially as follows:
"The transfer of the shares represented by this certificate
is subject to resale restrictions arising under the Securities
Act of 1933, as amended."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the Securities and
Exchange Commission, or a written opinion of counsel, in form and substance
reasonably satisfactory to Issuer, to the effect that such legend is not
required for purposes of the Securities Act. In addition, such certificate or
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certificates shall bear any other legend as may be required by applicable law.
(h) Ownership of Record; Tender of Purchase Price; Expenses. Upon the
tender of the applicable purchase price in immediately available funds
(following the giving of the Exercise Notice) at the Closing, Grantee shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of Issuer may then
be closed or that a certificate or certificates representing such shares of
Common Stock may not have been delivered to Grantee. Issuer shall pay all
expenses, and any and all federal, national, state, provincial and local taxes
and other charges worldwide that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section 2 in
the name of Grantee or its nominee, assignee, transferee or designee.
3. Covenants of Issuer. In addition to its other agreements and
covenants herein, Issuer agrees:
(a) Shares Reserved for Issuance. To maintain, free from preemptive
rights, sufficient authorized but unissued or treasury shares of Common
Stock so that the Option may be fully exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights of third parties to
purchase shares of Common Stock from Issuer, and to issue the appropriate
number of shares of Common Stock pursuant to the terms of this Agreement;
(b) No Avoidance. Not to avoid or seek to avoid (whether by charter
amendment or through reorganization, consolidation, merger, issuance of
rights, dissolution or sale of assets, or by any other voluntary act) the
observance or performance of any of the covenants, agreements or conditions
to be observed or performed hereunder by Issuer; and
(c) Further Assurances. Promptly after the date hereof to take all
actions as may from time to time be required (including (i) complying with
all applicable premerger notification, reporting and waiting period
requirements under the HSR Act and (ii) in the event that prior filing
with, notification to or approval of any other regulatory authority in the
U.S., U.K. or elsewhere is necessary before the Option may be
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exercised, cooperating fully with Grantee in preparing and processing the
required filings, notices or applications) in order to permit Grantee to
exercise the Option, to purchase Option Shares pursuant to such exercise
and otherwise to exercise Grantee's rights under this Agreement and to take
all action necessary to protect the rights of Grantee against dilution.
4. Representations and Warranties of Issuer. Issuer hereby represents
and warrants to Grantee as follows:
(a) Merger Agreement. Issuer hereby makes each of the representations
and warranties contained in Sections 2.1.2.2 and 2.1.4 of the Merger
Agreement as they relate to Issuer and this Agreement, as if such
representations and warranties were set forth herein.
(b) Shares Reserved for Issuance; Capital Stock. The Option Shares
issuable in accordance with the terms of this Agreement have been duly
reserved for issuance by Issuer and upon any issuance of such shares in
accordance with the terms hereof, such Option Shares will be duly
authorized, validly issued, fully paid and nonassessable, and will be
delivered free and clear of any lien, pledge, security interest, claim or
other encumbrance (other than those created by this Agreement) and not
subject to any preemptive rights.
(c) Corporate Authority. Issuer has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby; the execution and delivery of this
Agreement have been duly authorized by all necessary corporate action on
the part of Issuer, and, assuming the due authorization, execution and
delivery of this Agreement by Grantee, this Agreement constitutes a valid
and binding agreement of Issuer enforceable against Issuer in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(d) Takeover Statutes. Assuming that Grantee's representation and
warranty in Section 2.1.10.1 of the Merger Agreement is true and correct,
Issuer's board of directors has taken all appropriate and necessary
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actions such that Section 203 of the DGCL is inapplicable to the execution
and delivery of this Agreement and to the consummation of the transactions
contemplated hereby. No other "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation (each a
"Takeover Statute") as in effect on the date hereof is applicable to the
execution and delivery of this Agreement, the Common Stock issuable
hereunder or to the other transactions contemplated by this Agreement. No
anti-takeover provision contained in Issuer's certificate of incorporation
or its by-laws prohibits or restricts the execution and delivery of this
Agreement or, at the time of any exercise of the Option, will prohibit or
restrict the issuance of Common Stock hereunder or the consummation of the
other transactions contemplated by this Agreement.
5. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that Grantee has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action on the part of
Grantee, and, assuming the due authorization, execution and delivery of this
Agreement by Issuer, constitutes a valid and binding agreement of Grantee
enforceable against Grantee in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
6. Replacement. Upon (i) receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Agreement, (ii) receipt by Issuer of reasonably satisfactory indemnification in
the case of loss, theft or destruction and (iii) surrender and cancellation of
this Agreement in the case of mutilation, Issuer will execute and deliver a new
Agreement of like tenor and date. Any such new Agreement executed and delivered
shall constitute an additional contractual obligation on the part of Issuer,
whether or not the Agreement so lost, stolen, destroyed or mutilated shall at
any time be enforceable by any Person other than the holder of the new
Agreement.
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7. Adjustments. In addition to the adjustment to the total number of
Option Shares pursuant to Section 1(b) and the adjustment to the Option Price
pursuant to Section 1(c), the total number of Option Shares purchasable upon the
exercise of the Option hereof and the Option Price shall be subject to
adjustment from time to time as follows:
(a) In the event of any change in the outstanding shares of Common
Stock by reason of stock dividends, splits, combinations, subdivisions or
reclassifications, mergers, recapitalizations, extraordinary dividends or
distributions, exchanges of shares or the like, the type and number of
Option Shares purchasable upon exercise of the Option shall be
appropriately adjusted, and proper provision shall be made in the
agreements governing any such transaction, so that (i) Grantee shall
receive upon exercise of the Option the number and class of shares, other
securities, property or cash that Grantee would have received in respect of
the Option Shares purchasable upon exercise of the Option if the Option had
been exercised and such Option Shares had been issued to Grantee
immediately prior to such event or the record date therefor, as applicable;
and (ii) in the event any additional shares of Common Stock are to be
issued or otherwise become outstanding as a result of any such change
(other than pursuant to an exercise of the Option), the number of Option
Shares purchasable upon exercise of the Option shall be increased so that,
after such issuance the number of Option Shares so purchasable equals the
Maximum Applicable Percentage of the number of shares of Common Stock
issued and outstanding immediately after the consummation of such change;
and
(b) Whenever the number of Option Shares purchasable upon exercise
hereof is adjusted as provided in this Section 7, the Option Price shall
be adjusted by multiplying the Option Price by a fraction, the numerator of
which is equal to the number of Option Shares purchasable prior to the
adjustment and the denominator of which is equal to the number of Option
Shares purchasable after the adjustment.
8. Registration. (a) Upon the occurrence of a Triggering Event,
Issuer shall, at the request of Grantee included in the Exercise Notice, as
promptly as practicable prepare, file and keep current a shelf registration
statement under the Securities Act covering all Option Shares
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issued and issuable pursuant to the Option and shall use its best efforts to
cause such registration statement to become effective and remain current in
order to permit the sale or other disposition of any Option Shares issued upon
exercise of the Option in accordance with any plan of disposition requested by
Grantee; provided, however, that Issuer may postpone the filing of a
registration statement relating to a registration request by Grantee under this
Section 8 for a period of time (not in excess of 30 days) if in its judgment
such filing would require the disclosure of material information that Issuer has
a bona fide business purpose for preserving as confidential. Issuer will use its
best efforts to cause such registration statement first to become effective and
then to remain effective for 270 days from the day such registration statement
first becomes effective or until such earlier date as all shares registered
shall have been sold by Grantee. In connection with any such registration,
Issuer and Grantee shall provide each other with representations, warranties,
indemnities, contribution and other agreements customarily given in connection
with such registrations. If requested by Grantee in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating Issuer in
respect of representations, warranties, indemnities, contribution and other
agreements customarily made by issuers in such underwriting agreements.
(b) In the event that Grantee so requests, the closing of the sale or
other disposition of the Option Shares or other securities pursuant to a
registration statement filed pursuant to Section 8(a) shall occur substantially
simultaneously with the exercise of the Option.
9. Repurchase of Option and/or Shares. (a) Repurchase; Repurchase
Price. At the request of Grantee, given in writing within 180 days following the
occurrence of a Triggering Event (or such later period as is provided in Section
2(d) with respect to any required filing, notice or application for approval or
pursuant to a request by Grantee in accordance with Section 10), (i) Issuer
shall repurchase the Option from Grantee, in whole but not in part (except as
provided in Section 9(c) and Section 19), at a price (the "Option Repurchase
Price") equal to the number of Option Shares then purchasable upon exercise of
the Option multiplied by the amount by which the Market Price (as defined below)
exceeds the applicable Option Price (giving effect to the Maximum Option Price)
or
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(ii) Issuer shall repurchase all Option Shares then owned by Grantee at a price
(the "Option Share Repurchase Price") equal to the number of such Option Shares
multiplied by the Market Price; provided, however, that the Option Repurchase
Price or the Option Share Repurchase Price, as the case may be, shall be reduced
to the extent necessary for it not to exceed the maximum amount for which Issuer
is permitted, without a vote of the stockholders of Issuer, to repurchase the
Option or Option Shares, as the case may be, on the date of repurchase in
accordance with the provisions of Article VII of the certificate of
incorporation of Issuer. The term "Market Price" shall mean, for any share of
Common Stock, the average of the closing sale prices during the 90-day period
immediately preceding the delivery of the Repurchase Notice on the Composite
Tape for NYSE-listed stocks, or, if the Common Stock is not quoted on the
Composite Tape, on the NYSE, or if the Common Stock is not listed on the NYSE,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which the Common Stock is listed, or if the
Common Stock is not listed on any such exchange, the average of the closing bid
quotations with respect to a share of Common Stock during the 90-day period
immediately preceding the date of the Repurchase Notice on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the Market Price on
the date of the Repurchase Notice of a share of Common Stock, as determined by
the Board of Directors of Issuer in good faith.
(b) Method of Repurchase. Grantee may exercise its right to require
Issuer to repurchase the Option, in whole but not in part, or all Option Shares
then owned by Grantee pursuant to this Section 9 by surrendering for such
purpose to Issuer, at its principal office, this Agreement or certificates for
such Option Shares, as applicable, accompanied by a written notice or notices
stating that Grantee elects to require Issuer to repurchase the Option or such
Option Shares in accordance with the provisions of this Section 9 (such notice,
a "Repurchase Notice"). As promptly as practicable, and in any event within 15
business days after the surrender of this Agreement or a certificate or
certificates representing Option Shares and the receipt of the Repurchase Notice
relating thereto, Issuer shall deliver or cause to be delivered to Grantee the
applicable Option Repurchase Price or the Option Share Repurchase Price.
(c) Effect of Statutory or Regulatory Restraints on Repurchase. To the
extent that, upon or following the
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giving of a Repurchase Notice, Issuer is prohibited under applicable law or
regulation from repurchasing the Option or any Option Shares subject to such
Repurchase Notice (and Issuer hereby undertakes to use its best efforts to
obtain all required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to accomplish such repurchase),
Issuer shall immediately so notify Grantee in writing and thereafter deliver or
cause to be delivered, from time to time, to Grantee the portion of the Option
Repurchase Price or the Option Share Repurchase Price that Issuer is no longer
prohibited from delivering, within 2 business days after the date on which it is
no longer so prohibited; provided, however, that upon notification by Issuer in
writing of such prohibition, Grantee may, within 5 days of receipt of such
notification from Issuer, revoke in writing its Repurchase Notice, whether in
whole or to the extent of the prohibition, whereupon, in the latter case, Issuer
shall promptly (i) deliver to Grantee that portion of the Option Repurchase
Price or the Option Share Repurchase Price that Issuer is not prohibited from
delivering; and (ii) deliver to Grantee, as appropriate, (A) with respect to the
Option, a new stock option agreement evidencing the right of Grantee to purchase
that number of Option Shares for which the surrendered stock option agreement
was exercisable at the time of delivery of the Repurchase Notice less the number
of shares as to which the Option Repurchase Price has theretofore been delivered
to Grantee, or (B) with respect to Option Shares, a certificate for the Option
Shares as to which the Option Share Repurchase Price has not theretofore been
delivered to Grantee. Notwithstanding anything to the contrary in this
Agreement, including, without limitation, the time limitations on the exercise
of the Option, Grantee may give notice of exercise of the Option for 180 days
after a notice of revocation has been issued pursuant to this Section 9(c) and
thereafter exercise the Option in accordance with the applicable provisions of
this Agreement.
(d) Acquisition Transactions. In addition to any other restrictions or
covenants, Issuer hereby agrees that, in the event that Grantee delivers a
Repurchase Notice, it shall not enter or agree to enter into an agreement or
series of agreements relating to a merger with or into or the consolidation with
any other Person, the sale of all or substantially all of the assets of Issuer
or any similar transaction or disposition unless the other party or parties to
such agreement or agreements agree to assume in writing Issuer's obligations
under Section 9(a) and, notwithstanding any notice of revocation delivered
pursuant to the proviso
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to Section 9(c), Grantee may require such other party or parties to perform
Issuer's obligations under Section 9(a) unless such party or parties are
prohibited by law or regulation from such performance, in which case such party
or parties shall be subject to the obligations of the Issuer under Section 9(c).
10. Extension of Exercise Periods. The 180-day periods for exercise of
certain rights under Sections 2 and 9 shall be extended in each such case at the
request of Grantee to the extent necessary to avoid liability by Grantee under
Section 16(b) of the Exchange Act by reason of such exercise.
11. Assignment. Neither party hereto may assign or delegate any of its
rights or obligations under this Agreement or the Option to any other Person
without the express written consent of the other party, except that this
Agreement or the Option may be assigned to any direct or indirect wholly owned
Subsidiary of Grantee. Any attempted assignment or delegation in contravention
of the preceding sentence shall be null and void.
12. Filings; Other Actions. Each of Grantee and Issuer will use its
best efforts to make all filings with, notices to and applications for approval
of, and to obtain consents of, all third parties and governmental authorities
necessary for the consummation of the transactions contemplated by this
Agreement. Subject to applicable law and the rules and regulations of the NYSE,
the Issuer will promptly file an application to have the Option Shares listed on
the NYSE, subject to notice of issuance, and will use its best reasonable
efforts to obtain approval of such application; provided, that if the Issuer is
unable to effect such listing on the NYSE by the Closing Date, the Issuer will
nevertheless be obligated to deliver the Option Shares upon the Closing Date.
13. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement by either party
hereto and that the obligations of the parties hereto shall be specifically
enforceable through injunctive or other equitable relief.
14. Severability; Etc. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application
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thereof to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision unless the substitution of such provision
would materially frustrate the express intent and purposes of this Agreement,
and (b) the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction. If for any reason a court or regulatory agency determines
that Grantee is not permitted to acquire pursuant to Section 2 the full number
of Option Shares provided in Section 1(a) hereof (as adjusted pursuant to
Sections 1(b) and 7 hereof), it is the express intention of Issuer to allow
Grantee to acquire such lesser number of Option Shares as may be permissible,
without any amendment or modification hereof.
15. Notices. Notices, requests, instructions or other documents to be
given under this Agreement shall be in writing and shall be deemed given (i)
when sent if sent by facsimile, provided that the facsimile is promptly
confirmed by telephone confirmation thereof, (ii) when delivered, if delivered
personally to the intended recipient, and (iii) one business day later, if sent
by overnight delivery via a national courier service, and in each case addressed
to a party at the respective addresses of the parties set forth in the Merger
Agreement.
16. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE
TO CONTRACTS TO BE PERFORMED WHOLLY IN SUCH STATE. The parties hereby
irrevocably submit to the jurisdiction of the Federal courts of the United
States of America located in the State of Delaware and the state courts of the
State of Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and in respect of the transactions contemplated
hereby and hereby waive, and agree not to assert, as a defense in any action,
suit or proceeding for the interpretation or enforcement hereof, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue
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thereof may not be appropriate or that this Agreement may not be enforced in or
by such courts, and the parties irrevocably agree that all claims with respect
to such action or proceeding shall be heard and determined in such a court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 15, or in such other manner as may
be permitted by Law, shall be valid and sufficient service thereof. EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 16.
17. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expense, except that Issuer shall be responsible for
all fees and expenses (other than underwriting discounts or commissions)
relating to the registration of securities pursuant to Section 8.
18. Entire Agreement, Etc. This Agreement, the Confidentiality
Agreement and the Merger Agreement (including any exhibits thereto, the BP Amoco
Disclosure Letter and the ARCO Disclosure Letter) constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties with
respect to the subject matter hereof. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. This Agreement is not intended to confer upon any Person,
other than the parties
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hereto, and their respective successors and permitted assigns, any rights or
remedies hereunder.
19. Limitation on Profit. (a) Notwithstanding any other provision of
this Agreement, in no event shall Grantee's Total Profit (as hereinafter
defined) plus any ARCO Termination Amount paid to Grantee pursuant to Section
5.5.2 of the Merger Agreement exceed in the aggregate $500,000,000 (the "Maximum
Amount") and, if it otherwise would exceed such amount, Grantee, at its sole
election, shall either (i) reduce the number of Option Shares subject to this
Option, (ii) deliver to the Issuer for cancellation Option Shares previously
purchased by Grantee, (iii) pay cash to the Issuer, or (iv) any combination
thereof, so that Grantee's actually realized Total Profit, when aggregated with
such ARCO Termination Amount so paid to Grantee, shall not exceed the Maximum
Amount taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of Option Shares as would, as of the date of
exercise, result in a Notional Total Profit (as defined below) which, together
with any ARCO Termination Amount theretofore paid to Grantee pursuant to Section
5.5.2 of the Merger Agreement, and after giving effect to any election made by
Grantee under Section 19(a), would exceed the Maximum Amount; provided, that
nothing in this sentence shall restrict any exercise of the Option permitted
hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by Grantee
pursuant to Issuer's repurchase of the Option or any Option Shares pursuant to
Section 9, less, in the case of any repurchase of Option Shares, Grantee's
purchase price for such Option Shares, and (ii) (x) the fair market value, or
the aggregate net cash amounts received by Grantee pursuant to the sale, of
Option Shares (or (A) any other securities into which such Option Shares are
converted or exchanged or (B) any property, cash or other securities received
pursuant to adjustments made under Section 7 ("Additional Property")), less (y)
Grantee's purchase price for such Option Shares.
(d) As used herein, the term "Notional Total Profit" with respect to
the Option Shares subject to this Option shall be the Total Profit determined as
of the date of such proposal assuming that this Option were exercised in
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full on such date and assuming that (i) such Option Shares (or any other
securities into which such Option Shares are converted or exchanged) were sold
for cash at the closing market price on the NYSE for the Common Stock as of the
close of business on the preceding trading day (less customary brokerage
commissions) and (ii) any Additional Property was sold at fair market value.
20. Captions. The Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by duly authorized officers of the parties hereto as of the day and year first
hereinabove written.
ATLANTIC RICHFIELD COMPANY
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
BP AMOCO p.l.c.
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: (E.J.P. Xxxxxx) - Sir Xxxx Xxxxxx
Title: Chief Executive Officer
By: /s/ B.E. Xxxxx
----------------------------------------
Name: B.E. Xxxxx
Title: Executive Vice President
