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EXHIBIT 2.3
CONFORMED COPY
ANADARKO
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of April 2, 2000 is by
and between Anadarko Petroleum Corporation, a Delaware corporation ("Anadarko"),
and Union Pacific Resources Group Inc., a Utah corporation (the "Grantee").
RECITALS
The Grantee, Anadarko and Subcorp propose to enter into the
Merger Agreement providing, among other things, for the Merger pursuant to the
Merger Agreement of Subcorp with and into the Grantee which shall be the
surviving corporation.
As a condition and inducement to the Grantee's willingness to
enter into the Merger Agreement, the Grantee has requested that Anadarko agree,
and Anadarko has agreed, to grant the Grantee the Anadarko Stock Option.
As a condition and inducement to Anadarko's willingness to
enter into the Merger Agreement, Anadarko has separately requested that the
Grantee agree, and the Grantee has agreed, to grant Anadarko the UPR Stock
Option pursuant to a Stock Option Agreement dated as of April 2, 2000 by and
between the Grantee and Anadarko.
The Board of Directors of the Grantee has approved the Merger
Agreement, the Merger and this Agreement and has recommended approval of the
Merger Agreement by the holders of UPR Common Stock.
The Board of Directors of Anadarko has approved the Merger
Agreement, the Merger and this Agreement and has recommended approval of the
issuance of Anadarko Common Shares pursuant to the Merger Agreement by the
holders of Anadarko Common Shares.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, Anadarko and the Grantee agree as follows:
1. Capitalized Terms. Those capitalized terms used but not
defined herein that are defined in the Merger Agreement are used herein with the
same meanings as ascribed to them therein. Those capitalized terms used in this
Agreement that are not defined in the Merger Agreement or in this Agreement are
defined in Annex A hereto and are used herein with the meanings ascribed to them
therein.
2. The Anadarko Stock Option.
(a) Grant of Anadarko Stock Option. Subject to the terms and
conditions set forth herein, Anadarko hereby grants to the Grantee an
irrevocable option to purchase, out of the authorized but unissued Anadarko
Common Shares, 25,886,726 shares of Anadarko Common
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Shares (as adjusted as set forth herein) (the "Anadarko Stock Option Shares"),
at the Exercise Price.
(b) Exercise Price. The exercise price (the "Exercise Price")
of the Anadarko Stock Option shall be $38.6875 per Anadarko Stock Option Share.
(c) Term. The Anadarko Stock Option shall be exercisable at
any time and from time to time following the occurrence of an Exercise Event and
shall remain in full force and effect until the earliest to occur of (i) the
Effective Time, (ii) the first anniversary of the receipt by Grantee of written
notice from Anadarko of the occurrence of an Exercise Event and (iii)
termination of the Merger Agreement in accordance with its terms prior to the
occurrence of an Exercise Event unless such termination itself constitutes an
Exercise Event (the "Anadarko Stock Option Term"). If the Anadarko Stock Option
is not theretofore exercised, the rights and obligations set forth in this
Agreement shall terminate at the expiration of the Anadarko Stock Option Term.
(d) Exercise of Anadarko Stock Option.
(i) The Grantee may exercise the Anadarko Stock Option, in
whole or in part, at any time and from time to time during the Anadarko Stock
Option Term. Notwithstanding the expiration of the Anadarko Stock Option Term,
the Grantee shall be entitled to purchase those Anadarko Stock Option Shares
with respect to which it has exercised the Anadarko Stock Option in accordance
with the terms hereof prior to the expiration of the Anadarko Stock Option Term.
(ii) If the Grantee wishes to exercise the Anadarko Stock
Option, it shall send a written notice (an "Exercise Notice") (the date of which
being herein referred to as the "Notice Date") to Anadarko specifying (i) the
total number of Anadarko Stock Option Shares it intends to purchase pursuant to
such exercise and (ii) a place and a date (the "Closing Date") not earlier than
three Business Days nor later than 15 Business Days from the Notice Date for the
closing of the purchase and sale pursuant to the Anadarko Stock Option (the
"Closing").
(iii) If the Closing cannot be effected by reason of the
application of any Applicable Law, the Closing Date shall be extended to the
tenth Business Day following the expiration or termination of the restriction
imposed by such Applicable Law. Without limiting the foregoing, if prior
notification to, or Authorization of, any Governmental Authority is required in
connection with the purchase of such Anadarko Stock Option Shares by virtue of
the application of such Applicable Law, the Grantee and, if applicable, Anadarko
shall promptly file the required notice or application for Authorization and the
Grantee, with the cooperation of Anadarko, shall expeditiously process the same.
(iv) Notwithstanding Section 2(d)(iii), if the Closing Date
shall not have occurred within nine months after the related Notice Date as a
result of one or more restrictions imposed by the application of any Applicable
Law, the exercise of the Anadarko Stock Option effected on the Notice Date shall
be deemed to have expired.
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(e) Payment and Delivery of Certificates.
(i) At each Closing, the Grantee shall pay to Anadarko in
immediately available funds by wire transfer to a bank account designated by
Anadarko an amount equal to the Exercise Price multiplied by the number of
Anadarko Stock Option Shares to be purchased on such Closing Date.
(ii) At each Closing, simultaneously with the delivery of
immediately available funds as provided above, Anadarko shall deliver to the
Grantee a certificate or certificates representing the Anadarko Stock Option
Shares to be purchased at such Closing, which Anadarko Stock Option Shares shall
be duly authorized, validly issued, fully paid and nonassessable and free and
clear of all Liens, and the Grantee shall deliver to Anadarko its written
agreement that the Grantee will not offer to sell or otherwise dispose of such
Anadarko Stock Option Shares in violation of applicable Law or the provisions of
this Agreement.
(f) Certificates. Certificates for the Anadarko Stock Option
Shares delivered at each Closing shall be endorsed with a restrictive legend
that shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS
OF APRIL 2, 2000. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE
HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY ANADARKO OF A WRITTEN
REQUEST THEREFOR.
A new certificate or certificates evidencing the same number of Anadarko Common
Shares will be issued to the Grantee in lieu of the certificate bearing the
above legend, and such new certificate shall not bear such legend, insofar as it
applies to the Securities Act, if the Grantee shall have delivered to Anadarko a
copy of a letter from the staff of the Commission, or an opinion of counsel in
form and substance reasonably satisfactory to Anadarko and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.
(g) If at the time of issuance of any Anadarko Common Shares
pursuant to any exercise of the Anadarko Stock Option, Anadarko shall have
issued any share purchase rights or similar securities to holders of Anadarko
Common Shares, then each Anadarko Stock Option Share purchased pursuant to the
Anadarko Stock Option shall also include rights with terms substantially the
same as and at least as favorable to the Grantee as those issued to other
holders of Anadarko Common Shares.
3. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in Anadarko Common Shares by
reason of a stock dividend, split-up, combination, recapitalization, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Anadarko Stock Option, and the Exercise Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction, so that the Grantee shall receive upon exercise of
the
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Anadarko Stock Option the same class and number of outstanding shares or other
securities or property that Grantee would have received in respect of Anadarko
Common Shares if the Anadarko Stock Option had been exercised immediately prior
to such event, or the record date therefor, as applicable.
(b) If any additional Anadarko Common Shares are issued after
the date of this Agreement (other than pursuant to an event described Section
3(a) above), the number of Anadarko Common Shares then remaining subject to the
Anadarko Stock Option shall be adjusted so that, after such issuance of
additional shares, such number of shares then remaining subject to the Anadarko
Stock Option, together with shares theretofore issued pursuant to the Anadarko
Stock Option, equals 19.9% of the number of Anadarko Common Shares then issued
and outstanding.
(c) To the extent any of the provisions of this Agreement
apply to the Exercise Price, they shall be deemed to refer to the Exercise Price
as adjusted pursuant to this Section 3.
4. Retention of Beneficial Ownership. To the extent that the
Grantee shall exercise the Anadarko Stock Option, the Grantee shall, unless the
Grantee shall exercise the Put Right or Anadarko shall exercise the Call Right,
retain sole ownership of the Anadarko Common Shares so acquired through the end
of the Call Period.
5. Repurchase at the Option of Grantee.
(a) At the request of the Grantee made at any time and from
time to time after the occurrence of an Exercise Event and prior to the earlier
of (i) 120 days after the expiration of the Anadarko Stock Option Term and (ii)
120 days after the conditions to the payment by Anadarko of the additional $100
million fee under Section 7.5(b) of the Merger Agreement shall have occurred
(the "Put Period"), Anadarko (or any successor thereto) shall, at the election
of the Grantee (the "Put Right"), repurchase from the Grantee (i) that portion
of the Anadarko Stock Option relating to all or any part of the Unexercised
Anadarko Stock Option Shares (or as to which the Anadarko Stock Option has been
exercised but the Closing has not occurred) and (ii) all or any portion of the
Anadarko Stock Option Shares purchased by the Grantee pursuant hereto and with
respect to which the Grantee then has ownership. The date on which the Grantee
exercises its rights under this Section 5 is referred to as the "Put Date." Such
repurchase shall be at an aggregate price (the "Put Consideration") equal to the
sum of:
(i) the aggregate Exercise Price paid by the Grantee
for any Anadarko Stock Option Shares which the Grantee owns
and as to which the Grantee is exercising the Put Right;
(ii) the excess, if any, of the Applicable Price over
the Exercise Price paid by the Grantee for each Anadarko Stock
Option Share as to which the Grantee is exercising the Put
Right multiplied by the number of such shares; and
(iii) the excess, if any, of (x) the Applicable Price
per share of Anadarko Common Shares over (y) the Exercise
Price multiplied by the number
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of Unexercised Anadarko Stock Option Shares as to which the
Grantee is exercising the Put Right.
(b) If the Grantee exercises its rights under this Section 5,
Anadarko shall, within five Business Days after the Put Date, pay the Put
Consideration to the Grantee in immediately available funds, and the Grantee
shall surrender to Anadarko the Anadarko Stock Option or portion of the Anadarko
Stock Option and the certificates evidencing the Anadarko Stock Option Shares
purchased thereunder. The Grantee shall warrant to Anadarko that, immediately
prior to the repurchase thereof pursuant to this Section 5, the Grantee had sole
record and Beneficial Ownership of the Anadarko Stock Option or such shares, or
both, as the case may be, and that the Anadarko Stock Option or such shares, or
both, as the case may be, were then held free and clear of all Liens.
(c) If the Anadarko Stock Option has been exercised, in whole
or in part, as to any Anadarko Stock Option Shares subject to the Put Right but
the Closing thereunder has not occurred, the payment of the Put Consideration
shall, to that extent, render such exercise null and void.
(d) Notwithstanding any provision to the contrary in this
Agreement, the Grantee may not exercise its rights pursuant to this Section 5 in
a manner that would result in Total Profit of more than the Profit Cap;
provided, however, that nothing in this sentence shall limit the Grantee's
ability to exercise the Anadarko Stock Option in accordance with its terms.
6. Repurchase at the Option of Anadarko.
(a) To the extent the Grantee shall not have previously
exercised its rights under Section 5, at the request of Anadarko made at any
time during the 120-day period commencing at the expiration of the Put Period
(the "Call Period"), Anadarko may repurchase from the Grantee, and the Grantee
shall sell, or cause to be sold, to Anadarko , all (but not less than all) of
the Anadarko Common Shares acquired by the Grantee pursuant hereto and with
respect to which the Grantee has ownership at the time of such repurchase at a
price per share equal to the greater of (A) the Current Market Price and (B) the
Exercise Price per share in respect of the shares so acquired (such price per
share multiplied by the number of Anadarko Common Shares to be repurchased
pursuant to this Section 6 being herein called the "Call Consideration"). The
date on which Anadarko exercises its rights under this Section 6 is referred to
as the "Call Date."
(b) If Anadarko exercises its rights under this Section 6,
Anadarko shall, within five Business Days pay the Call Consideration in
immediately available funds, and the Grantee shall surrender to Anadarko
certificates evidencing the Anadarko Common Shares purchased hereunder, and the
Grantee shall warrant to Anadarko that, immediately prior to the repurchase
thereof pursuant to this Section 6, the Grantee had sole record and Beneficial
Ownership of such shares and that such shares were then held free and clear of
all Liens.
7. Registration Rights.
(a) Anadarko shall, if requested by the Grantee at any time
and from time to time during the Registration Period, as expeditiously as
practicable, prepare, file and cause to be
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made effective up to two registration statements under the Securities Act if
such registration is required in order to permit the offering, sale and delivery
of any or all Anadarko Common Shares or other securities that have been acquired
by or are issuable to the Grantee upon exercise of the Anadarko Stock Option in
accordance with the intended method of sale or other disposition stated by the
Grantee, including, at the sole discretion of Anadarko, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Anadarko shall use all reasonable efforts to qualify such shares or other
securities under any applicable state securities laws. Anadarko shall use all
reasonable efforts to cause each such registration statement to become
effective, to obtain all consents or waivers of other parties that are required
therefor and to keep such registration statement effective for such period not
in excess of 180 days from the day such registration statement first becomes
effective as may be reasonably necessary to effect such sale or other
disposition. The obligations of Anadarko hereunder to file a registration
statement and to maintain its effectiveness may be suspended for one or more
periods of time not exceeding 60 days in the aggregate if the Board of Directors
of Anadarko shall have determined in good faith that the filing of such
registration or the maintenance of its effectiveness would require disclosure of
nonpublic information that would materially and adversely affect Anadarko. For
purposes of determining whether two requests have been made under this Section
7, only requests relating to a registration statement that has become effective
under the Securities Act and pursuant to which the Grantee has disposed of all
shares covered thereby in the manner contemplated therein shall be counted.
Notwithstanding any other provision of this Section 7, any request for
registration shall permit Anadarko, upon notice given within 20 days of the
request for registration, to repurchase from the Grantee any shares as to which
the Grantee requests registration at a price per share equal to the Current
Market Price at the date Anadarko notifies the Grantee of its decision to so
repurchase.
(b) The Registration Expenses shall be for the account of
Anadarko; provided, however, that Anadarko shall not be required to pay any
Registration Expenses with respect to such registration if the registration
request is subsequently withdrawn at the request of the Grantee unless the
Grantee agrees to forfeit its right to request one registration.
(c) The Grantee shall provide all information reasonably
requested by Anadarko for inclusion in any registration statement to be filed
hereunder. If during the Registration Period Anadarko shall propose to register
under the Securities Act the offering, sale and delivery of Anadarko Common
Shares for cash for its own account or for any other stockholder of Anadarko
pursuant to a firm underwriting, it shall, in addition to Anadarko's other
obligations under this Section 7, allow the Grantee the right to participate in
such registration provided that the Grantee participates in the underwriting;
provided, however, that, if the managing underwriter of such offering advises
Anadarko in writing that in its opinion the number of Anadarko Common Shares
requested to be included in such registration exceeds the number that can be
sold in such offering, Anadarko shall, after fully including therein all
securities to be sold by Anadarko, include the shares requested to be included
therein by Grantee pro rata (based on the number of shares intended to be
included therein) with the shares intended to be included therein by Persons
other than Anadarko.
(d) In connection with any offering, sale and delivery of
Anadarko Common Shares pursuant to a registration statement effected pursuant to
this Section 7, Anadarko and the Grantee shall provide each other and each
underwriter of the offering with customary
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representations, warranties and covenants, including covenants of
indemnification and contribution.
8. First Refusal. Subject to the provisions of Sections 5 and
6 herein, at any time after the first occurrence of an Exercise Event and prior
to the second anniversary of the first purchase of shares of Anadarko Common
Shares pursuant to the Anadarko Stock Option, if the Grantee shall desire to
sell, assign, transfer or otherwise dispose of all or any of the Anadarko Stock
Option Shares or other securities acquired by it pursuant to the Anadarko Stock
Option, it shall give Anadarko written notice of the proposed transaction (an
"Offeror's Notice"), identifying the proposed transferee, accompanied by a copy
of a binding offer to purchase such shares or other securities signed by such
transferee and setting forth the terms of the proposed transaction. An Offeror's
Notice shall be deemed an offer by the Grantee to Anadarko, which may be
accepted, in whole but not in part, within 20 Business Days of the receipt of
such Offeror's Notice, on the same terms and conditions and at the same price at
which the Grantee is proposing to transfer such shares or other securities to
such transferee. The purchase of any such shares or other securities by Anadarko
shall be settled within 20 Business Days of the date of the acceptance of the
offer and the purchase price shall be paid to the Grantee in immediately
available funds. If Anadarko shall fail or refuse to purchase all the shares or
other securities covered by an Offeror's Notice, the Grantee may, within 60 days
from the date of the Offeror's Notice, sell all, but not less than all, of such
shares or other securities to the proposed transferee at no less than the price
specified and on terms no more favorable than those set forth in the Offeror's
Notice; provided, however, that the provisions of this sentence shall not limit
the rights the Grantee may otherwise have if Anadarko has accepted the offer
contained in the Offeror's Notice and wrongfully refuses to purchase the shares
or other securities subject thereto. The requirements of this Section 8 shall
not apply to (a) any disposition as a result of which the proposed transferee
would own beneficially not more than 2% of the outstanding voting power of
Anadarko, (b) any disposition of Anadarko Common Shares or other securities by a
Person to whom the Grantee has assigned its rights under the Anadarko Stock
Option with the consent of Anadarko, (c) any sale by means of a public offering
registered under the Securities Act or (d) any transfer to a wholly owned
subsidiary of the Grantee which agrees in writing to be bound by the terms
hereof.
9. Profit Limitation.
(a) Notwithstanding any other provision of this Agreement, in
no event shall the Grantee's Total Profit exceed the Profit Cap and, if it
otherwise would exceed such amount, the Grantee, at its sole election, shall
either (i) deliver to Anadarko for cancellation Anadarko Stock Option Shares
previously purchased by Grantee, (ii) pay cash or other consideration to
Anadarko, (iii) reduce the amount of the fee payable to Grantee under Section
7.5(b) of the Merger Agreement or (iv) undertake any combination thereof, so
that the Grantee's Total Profit shall not exceed the Profit Cap after taking
into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement,
this Anadarko Stock Option may not be exercised for a number of Anadarko Stock
Option Shares that would, as of the Notice Date, result in a Notional Total
Profit of more than the Profit Cap, and, if exercise of the Anadarko Stock
Option otherwise would exceed the Profit Cap, the Grantee, at its sole option,
may increase the Exercise Price for that number of Anadarko Stock Option Shares
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set forth in the Exercise Notice so that the Notional Total Profit shall not
exceed the Profit Cap; provided, however, that nothing in this sentence shall
restrict any exercise of the Anadarko Stock Option otherwise permitted by this
Section 9(b) on any subsequent date at the Exercise Price set forth in Section
2(b) if such exercise would not then be restricted under this Section 9(b).
10. Listing. If Anadarko Common Shares or any other securities
then subject to the Anadarko Stock Option are then listed on the NYSE, Anadarko,
upon the occurrence of an Exercise Event, will promptly file an application to
list on the NYSE the Anadarko Common Shares or other securities then subject to
the Anadarko Stock Option and will use all reasonable efforts to cause such
listing application to be approved as promptly as practicable.
11. Replacement of Agreement. Upon receipt by Anadarko of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Agreement, if mutilated, Anadarko will execute and deliver a new Agreement
of like tenor and date. Any such new Agreement shall constitute an additional
contractual obligation of Anadarko, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in the Merger
Agreement or as otherwise expressly provided herein, each of the parties hereto
shall bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
(b) Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third Party Beneficiary;
Severability. Except as otherwise set forth in the Merger Agreement, this
Agreement (including the Merger Agreement and the other documents and
instruments referred to herein and therein) (i) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
(d) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as
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possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
(e) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Delaware, regardless of
the Applicable Laws that might otherwise govern under applicable principles of
conflicts of law. All actions and proceedings arising out of or relating to this
Agreement shall be exclusively heard and determined in any state or federal
court sitting in the city of Wilmington, Delaware.
(f) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses or sent by
electronic transmission to the telecopier number specified below:
If to Anadarko to:
Anadarko Petroleum Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: J. Xxxxxxx Xxxxxx, Esq.
` Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxx X. Xxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
If to Grantee to:
Union Pacific Resources Group Inc.
UPR Plaza
000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxx
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
(h) Counterparts. This Agreement and any amendments hereto may
be executed in counterparts, each of which shall be deemed an original and all
of which taken together shall constitute but a single document.
(i) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Anadarko Stock Option shall be
sold, assigned or otherwise disposed of or transferred by either of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that the Grantee may assign this Agreement to
a wholly owned subsidiary of the Grantee; provided, however, that no such
assignment shall have the effect of releasing the Grantee from its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
(j) Further Assurances. In the event of any exercise of the
Anadarko Stock Option by the Grantee, Anadarko and the Grantee shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in order to consummate the transactions provided for by
such exercise.
(k) Specific Performance. The parties hereto hereby
acknowledge and agree that the failure of any party to this Agreement to perform
its agreements and covenants hereunder will cause irreparable injury to the
other party to this Agreement for which damages, even if available, will not be
an adequate remedy. Accordingly, each of the parties hereto hereby consents to
the granting of equitable relief (including specific performance and injunctive
relief) by any court of competent jurisdiction to enforce any party's
obligations hereunder. The parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
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IN WITNESS WHEREOF, Anadarko and the Grantee have caused this
Anadarko Stock Option Agreement to be signed by their respective officers
thereunto duly authorized, all as of the day and year first written above.
ANADARKO PETROLEUM CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Chairman and Chief Executive
Officer
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ Xxxxxx Xxxxxxx, III
-------------------------------------------
Name: Xxxxxx Xxxxxxx, III
Title: Chairman, President and Chief
Executive Officer
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ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Stock Option Agreement
shall have the meanings set forth below unless the context shall otherwise
require:
"Agreement" shall mean this Stock Option Agreement.
"Anadarko Stock Option" shall mean the option granted by
Anadarko to Grantee pursuant to Section 2 herein.
"Anadarko Stock Option Shares" shall have the meaning ascribed
to such term in Section 2 herein.
"Anadarko Stock Option Term" shall have the meaning ascribed
to such term in Section 2 herein.
"Applicable Price" means the highest of (i) the highest
purchase price per share paid pursuant to a third party's tender or exchange
offer made for Anadarko Common Shares after the date hereof and on or prior to
the Put Date, (ii) the price per share to be paid by any third Person for
Anadarko Common Shares pursuant to an agreement for a Anadarko Acquisition
entered into on or prior to the Put Date, and (iii) the Current Market Price. If
the consideration to be offered, paid or received pursuant to either of the
foregoing clauses (i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent nationally
recognized investment banking firm jointly selected by the Grantee and Anadarko,
which determination shall be conclusive for all purposes of this Agreement.
"Authorization" shall mean any and all permits, licenses,
authorizations, orders certificates, registrations or other approvals granted by
any Governmental Authority.
"Beneficial Ownership," "Beneficial Owner" and "Beneficially
Own" shall have the meanings ascribed to them in Rule 13d-3 under the Exchange
Act.
"Business Day" shall mean a day other than Saturday, Sunday or
a federal holiday.
"Call Consideration" shall have the meaning ascribed to such
term in Section 6 herein.
"Call Date" shall have the meaning ascribed to such term in
Section 6 herein.
"Call Period" shall have the meaning ascribed to such term in
Section 6 herein.
"Closing" shall have the meaning ascribed to such term in
Section 2 herein.
"Closing Date" shall have the meaning ascribed to such term in
Section 2 herein.
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"Current Market Price" shall mean, as of any date, the average
of the closing prices (or, if such securities should not trade on any trading
day, the average of the bid and asked prices therefor on such day) of Anadarko
Common Shares as reported on the New York Stock Exchange Composite Tape during
the ten consecutive trading days ending on (and including) the trading day
immediately prior to such date or, if the Anadarko Common Shares are not quoted
thereon, on The Nasdaq Stock Market or, if the Anadarko Common Shares are not
quoted thereon, on the principal trading market (as defined in Regulation M
under the Exchange Act) on which such shares are traded as reported by a
recognized source during such ten Business Day period.
"Exercise Event" shall mean any of the events giving rise to
the obligation of Anadarko to pay the $25 million fee under Section 7.5(b) of
the Merger Agreement.
"Exercise Notice" shall have the meaning ascribed to such term
in Section 2 herein.
"Exercise Price" shall have the meaning ascribed to such term
in Section 2 herein.
"Lien" shall mean any mortgage, pledge, security interest,
adverse claim, encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing), any conditional sale or other title retention
agreement, any lease in the nature thereof or the filing of or agreement to give
any financing statement under the Applicable Laws of any jurisdiction.
"Merger Agreement" shall mean that certain Agreement and Plan
of Merger dated as of the date hereof among Anadarko Petroleum Corporation, a
Delaware corporation, Dakota Merger Corp., a Utah corporation, and Union Pacific
Resources Group Inc., a Utah corporation.
"Notice Date" shall have the meaning ascribed to such term in
Section 2 herein.
"Notional Total Profit" shall mean, with respect to any number
of Anadarko Stock Option Shares as to which the Grantee may propose to exercise
the Anadarko Stock Option, the Total Profit determined as of the date of the
Exercise Notice assuming that the Anadarko Stock Option were exercised on such
date for such number of Anadarko Stock Option Shares and assuming such Anadarko
Stock Option Shares, together with all other Anadarko Stock Option Shares held
by the Grantee and its Affiliates as of such date, were sold for cash at the
closing market price for Anadarko Common Shares as of the close of business on
the preceding trading day (less customary brokerage commissions) and including
all amounts theretofore received or concurrently being paid to the Grantee
pursuant to clauses (i), (ii) and (iii) of the definition of Total Profit.
"Offeror's Notice" shall have the meaning ascribed to such
term in Section 8 herein.
"Person" shall have the meaning specified in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act.
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"Profit Cap" shall mean $25 million, unless the conditions to
the payment by Anadarko of the additional $100 million fee under Section 7.5(b)
of the Merger Agreement shall have occurred, in which case "Profit Cap" shall
mean $125 million.
"Put Consideration" shall have the meaning ascribed to such
term in Section 5 herein.
"Put Date" shall have the meaning ascribed to such term in
Section 5 herein.
"Put Period" shall have the meaning ascribed to such term in
Section 5 herein.
"Put Right" shall have the meaning ascribed to such term in
Section 5 herein.
"Registration Expenses" shall mean the expenses associated
with the preparation and filing of any registration statement pursuant to
Section 7 herein and any sale covered thereby (including any fees related to
blue sky qualifications and filing fees in respect of the National Association
of Securities Dealers, Inc.), but excluding underwriting discounts or
commissions or brokers' fees in respect to shares to be sold by the Grantee and
the fees and disbursements of the Grantee's counsel.
"Registration Period" shall mean, subject to Section 4 hereof,
the period of two years following the first exercise of the Anadarko Stock
Option by the Grantee.
"Subcorp" shall mean Dakota Merger Corp., a Utah corporation
and a wholly owned subsidiary of Anadarko.
"Total Profit" shall mean the aggregate (before income taxes)
of the following: (i) all amounts received by the Grantee or concurrently being
paid to the Grantee pursuant to Section 5 for the repurchase of all or part of
the unexercised portion of the Anadarko Stock Option, (ii) (A) the amounts
received by the Grantee or concurrently being paid to the Grantee pursuant to
the sale of Anadarko Stock Option Shares (or any other securities into which
such Anadarko Stock Option Shares are converted or exchanged), including sales
made to Anadarko or pursuant to a registration statement under the Securities
Act or any exemption therefrom, less (B) the Grantee's purchase price for such
Anadarko Stock Option Shares and (iii) all amounts received by the Grantee from
Anadarko or concurrently being paid to the Grantee pursuant to Section 7.5(b) of
the Merger Agreement.
"Unexercised Anadarko Stock Option Shares" shall mean, from
and after the Exercise Date until the expiration of the Anadarko Stock Option
Term, those Anadarko Stock Option Shares as to which the Anadarko Stock Option
remains unexercised from time to time.
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