CONFORMED COPY
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UPR
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of April 2, 2000 is by and
between Union Pacific Resources Group Inc., a Utah corporation ("UPR"), and
Anadarko Petroleum Corporation, a Delaware corporation (the "GRANTEE").
RECITALS
The Grantee, Utah 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 UPR 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 UPR agree, and UPR has
agreed, to grant the Grantee the UPR Stock Option.
As a condition and inducement to UPR's willingness to enter into the
Merger Agreement, UPR has separately requested that the Grantee agree, and the
Grantee has agreed, to grant UPR the Anadarko Stock Option pursuant to the
Anadarko Stock Option Agreement dated as of April 2, 2000 by and between the
Grantee and UPR.
The Board of Directors of UPR 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 the Grantee has approved the Merger
Agreement, the Merger and this Agreement and has recommended approval of the
issuance of shares 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, UPR 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 UPR STOCK OPTION.
(a) GRANT OF UPR STOCK OPTION. Subject to the terms and conditions set
forth herein, UPR hereby grants to the Grantee an irrevocable option to
purchase, out of the authorized but unissued UPR Common Stock, 50,138,515 shares
of UPR Common Stock (as adjusted as set forth herein) (the "UPR STOCK OPTION
SHARES"), at the Exercise Price.
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(b) EXERCISE PRICE. The exercise price (the "EXERCISE PRICE") of the
UPR Stock Option shall be the lesser of (i) $17.60 per UPR Stock Option Share
and (ii) the Exchange Ratio multiplied by the closing price of Anadarko Common
Shares on the date of exercise of the UPR Stock Option.
(c) TERM. The UPR 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 UPR
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 "UPR
STOCK OPTION TERM"). If the UPR Stock Option is not theretofore exercised, the
rights and obligations set forth in this Agreement shall terminate at the
expiration of the UPR Stock Option Term.
(d) EXERCISE OF UPR STOCK OPTION.
(i) The Grantee may exercise the UPR Stock Option, in whole or in
part, at any time and from time to time during the UPR Stock Option Term.
Notwithstanding the expiration of the UPR Stock Option Term, the Grantee shall
be entitled to purchase those UPR Stock Option Shares with respect to which it
has exercised the UPR Stock Option in accordance with the terms hereof prior to
the expiration of the UPR Stock Option Term.
(ii) If the Grantee wishes to exercise the UPR Stock Option, it shall
send a written notice (an "EXERCISE NOTICE") (the date of which being herein
referred to as the "NOTICE DATE") to UPR specifying (i) the total number of UPR
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 UPR 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 UPR Stock Option Shares by virtue of the application of such
Applicable Law, the Grantee and, if applicable, UPR shall promptly file the
required notice or application for Authorization and the Grantee, with the
cooperation of UPR, 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 UPR Stock Option effected on the Notice Date shall be deemed to
have expired.
(e) PAYMENT AND DELIVERY OF CERTIFICATES.
(i) At each Closing, the Grantee shall pay to UPR in immediately
available funds by wire transfer to a bank account designated by UPR an amount
equal to the Exercise
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Price multiplied by the number of UPR 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, UPR shall deliver to the Grantee a
certificate or certificates representing the UPR Stock Option Shares to be
purchased at such Closing, which UPR 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 UPR its written agreement that the
Grantee will not offer to sell or otherwise dispose of such UPR Stock Option
Shares in violation of applicable Law or the provisions of this Agreement.
(f) CERTIFICATES. Certificates for the UPR 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 UPR 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 UPR OF A WRITTEN REQUEST THEREFOR.
A new certificate or certificates evidencing the same number of shares of UPR
Common Stock 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 UPR
a copy of a letter from the staff of the Commission, or an opinion of counsel in
form and substance reasonably satisfactory to UPR 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 UPR Common Stock pursuant to any
exercise of the UPR Stock Option, UPR shall have issued any share purchase
rights or similar securities to holders of UPR Common Stock, then each UPR Stock
Option Share purchased pursuant to the UPR 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 UPR Common Stock.
3. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in UPR Common Stock 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
UPR 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 UPR
Stock Option the same class and number of outstanding shares or other securities
or property that Grantee would have received in respect of UPR Common Stock if
the UPR Stock Option had been exercised immediately prior to such event, or the
record date therefor, as applicable.
(b) If any additional shares of UPR Common Stock are issued after the
date of this Agreement (other than pursuant to an event described in Section
3(a) above), the number of
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shares of UPR Common Stock then remaining subject to
the UPR Stock Option shall be adjusted so that, after such issuance of
additional shares, such number of shares then remaining subject to the UPR Stock
Option, together with shares theretofore issued pursuant to the UPR Stock
Option, equals 19.9% of the number of shares of UPR Common Stock 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 UPR Stock Option, the Grantee shall, unless the Grantee shall
exercise the Put Right or UPR shall exercise the Call Right, retain sole
ownership of the shares of UPR Common Stock 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 UPR Stock Option Term and (ii) 120 days
after the conditions to the payment by UPR of the additional $100 million fee
under Section 7.5(a) of the Merger Agreement shall have occurred (the "PUT
PERIOD"), UPR (or any successor thereto) shall, at the election of the Grantee
(the "PUT RIGHT"), repurchase from the Grantee (i) that portion of the UPR Stock
Option relating to all or any part of the Unexercised UPR Stock Option Shares
(or as to which the UPR Stock Option has been exercised but the Closing has not
occurred) and (ii) all or any portion of the UPR 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
UPR 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 UPR 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 UPR Common Stock over (y) the Exercise Price multiplied by
the number of Unexercised UPR Stock Option Shares as to which the
Grantee is exercising the Put Right.
(b) If the Grantee exercises its rights under this Section 5, UPR
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 UPR the UPR Stock Option or portion of the UPR Stock Option and the
certificates evidencing the UPR Stock Option Shares purchased thereunder. The
Grantee shall warrant to UPR that, immediately prior to the repurchase thereof
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pursuant to this Section 5, the Grantee had sole record and Beneficial Ownership
of the UPR Stock Option or such shares, or both, as the case may be, and that
the UPR Stock Option or such shares, or both, as the case may be, were then held
free and clear of all Liens.
(c) If the UPR Stock Option has been exercised, in whole or in part,
as to any UPR 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 UPR Stock Option in accordance with its terms.
6. REPURCHASE AT THE OPTION OF UPR.
(a) To the extent the Grantee shall not have previously exercised its
rights under Section 5, at the request of UPR made at any time during the
120-day period commencing at the expiration of the Put Period (the "CALL
PERIOD"), UPR may repurchase from the Grantee, and the Grantee shall sell, or
cause to be sold, to UPR, all (but not less than all) of the shares of UPR
Common Stock 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 shares of UPR Common Stock to be repurchased pursuant to this
Section 6 being herein called the "CALL CONSIDERATION"). The date on which UPR
exercises its rights under this Section 6 is referred to as the "CALL DATE."
(b) If UPR exercises its rights under this Section 6, UPR shall,
within five Business Days pay the Call Consideration in immediately available
funds, and the Grantee shall surrender to UPR certificates evidencing the shares
of UPR Common Stock purchased hereunder, and the Grantee shall warrant to UPR
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) UPR 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 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 shares of UPR Common Stock or other
securities that have been acquired by or are issuable to the Grantee upon
exercise of the UPR Stock Option in accordance with the intended method of sale
or other disposition stated by the Grantee, including, at the sole discretion of
UPR, a "shelf" registration statement under Rule 415 under the Securities Act or
any successor provision, and UPR shall use all reasonable efforts to qualify
such shares or other securities under any applicable state securities laws. UPR
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
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statement first becomes effective as may be reasonably necessary to effect such
sale or other disposition. The obligations of UPR 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 UPR 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 UPR. 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 UPR, 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 UPR notifies the Grantee of its decision to so repurchase.
(b) The Registration Expenses shall be for the account of UPR;
PROVIDED, HOWEVER, that UPR 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
UPR for inclusion in any registration statement to be filed hereunder. If during
the Registration Period UPR shall propose to register under the Securities Act
the offering, sale and delivery of UPR Common Stock for cash for its own account
or for any other stockholder of UPR pursuant to a firm underwriting, it shall,
in addition to UPR'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 UPR in writing that in its opinion the
number of shares of UPR Common Stock requested to be included in such
registration exceeds the number that can be sold in such offering, UPR shall,
after fully including therein all securities to be sold by UPR, 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 UPR.
(d) In connection with any offering, sale and delivery of UPR Common
Stock pursuant to a registration statement effected pursuant to this Section 7,
UPR and the Grantee shall provide each other and each underwriter of the
offering with customary 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 UPR Common Stock
pursuant to the UPR Stock Option, if the Grantee shall desire to sell, assign,
transfer or otherwise dispose of all or any of the UPR Stock Option Shares or
other securities acquired by it pursuant to the UPR Stock Option, it shall give
UPR 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 UPR, which may be accepted, in whole but not
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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 UPR 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 UPR 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 UPR 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 UPR, (b) any disposition of
UPR Common Stock or other securities by a Person to whom the Grantee has
assigned its rights under the UPR Stock Option with the consent of UPR, (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 UPR for cancellation UPR Stock Option Shares previously purchased by
Grantee, (ii) pay cash or other consideration to UPR, (iii) reduce the amount of
the fee payable to Grantee under Section 7.5(a) 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 UPR
Stock Option may not be exercised for a number of UPR 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 UPR Stock Option otherwise would exceed the
Profit Cap, the Grantee, at its sole UPR Stock Option, may increase the Exercise
Price for that number of UPR Stock Option Shares 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 UPR 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 UPR Common Stock or any other securities then subject
to the UPR Stock Option are then listed on the NYSE, UPR, upon the occurrence of
an Exercise Event, will promptly file an application to list on the NYSE the
shares of UPR Common Stock or other securities then subject to the UPR 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 UPR of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of
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loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, UPR will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement shall
constitute an additional contractual obligation of UPR, 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 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
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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 UPR to:
Union Pacific Resources Group Inc.
UPR Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Grantee to:
Anadarko Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(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 UPR 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.
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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 UPR Stock
Option by the Grantee, UPR 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.
IN WITNESS WHEREOF, UPR and the Grantee have caused this UPR 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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Chairman and Chief Executive
Officer
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
Title: Chairman, President and Chief
Executive Officer
A-1
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.
"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 shares of UPR Common Stock 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 shares of UPR
Common Stock pursuant to an agreement for a UPR 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 UPR, 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.
"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 UPR Common Stock 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 shares of UPR Common Stock are not quoted thereon,
on The Nasdaq Stock Market or, if the shares of UPR Common Stock 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.
A-2
"EXERCISE EVENT" shall mean any of the events giving rise to the
obligation of UPR to pay the $25 million fee under Section 7.5(a) 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 UPR
Stock Option Shares as to which the Grantee may propose to exercise the UPR
Stock Option, the Total Profit determined as of the date of the Exercise Notice
assuming that the UPR Stock Option were exercised on such date for such number
of UPR Stock Option Shares and assuming such UPR Stock Option Shares, together
with all other UPR Stock Option Shares held by the Grantee and its Affiliates as
of such date, were sold for cash at the closing market price for UPR Common
Stock 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.
"PROFIT CAP" shall mean $25 million, unless the conditions to the
payment by UPR of the additional $100 million fee under Section 7.5(a) 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.
A-3
"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 UPR Stock Option by the
Grantee.
"SUBCORP" shall mean Dakota Merger Corp., a Utah corporation and a
wholly owned subsidiary of Grantee.
"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 UPR Stock Option, (ii) (A) the amounts received by
the Grantee or concurrently being paid to the Grantee pursuant to the sale of
UPR Stock Option Shares (or any other securities into which such UPR Stock
Option Shares are converted or exchanged), including sales made to UPR or
pursuant to a registration statement under the Securities Act or any exemption
therefrom, less (B) the Grantee's purchase price for such UPR Stock Option
Shares and (iii) all amounts received by the Grantee from UPR or concurrently
being paid to the Grantee pursuant to Section 7.5(a) of the Merger Agreement.
"UNEXERCISED UPR STOCK OPTION SHARES" shall mean, from and after the
Exercise Date until the expiration of the UPR Stock Option Term, those UPR Stock
Option Shares as to which the UPR Stock Option remains unexercised from time to
time.
"UPR STOCK OPTION" shall mean the UPR Stock Option granted by UPR to
Grantee pursuant to Section 2 herein.
"UPR STOCK OPTION SHARES" shall have the meaning ascribed to such term
in Section 2 herein.
"UPR STOCK OPTION TERM" shall have the meaning ascribed to such term
in Section 2 herein.
