Exhibit 10.1
XXXX-XxXXX STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of October 14, 1998 (the
"Agreement"), by and between Xxxx-XxXxx Corporation, a Delaware corporation
("Issuer"), and Oryx Energy Company, a Delaware corporation ("Grantee").
WHEREAS, Grantee and Issuer are concurrently herewith entering into
an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"; capitalized terms not defined herein shall have the meanings set
forth in the Merger Agreement), providing for, among other things, the merger
of Grantee with and into Issuer with Issuer as the surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's willingness to
enter into the Merger Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below); and
WHEREAS, as a condition and inducement to Issuer's willingness to
enter into the Merger Agreement, Issuer has requested that Grantee agree, and
Grantee has agreed, to grant Issuer an option to purchase shares of Grantee's
common stock on substantially the same terms as the Option.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 9,434,181 (as adjusted as set forth herein)
shares (the "Option Shares") of Common Stock, par value $1.00 per share, of
Issuer (the "Issuer Common Stock") at a purchase price of $46.94 per Option
Share (the "Purchase Price").
2. Exercise of Option. (a) If not in material breach of the
Merger Agreement or the Oryx Stock Option Agreement, Grantee may exercise the
Option, in whole or in part, at any time or from time to time following the
occurrence of a Purchase Event (as defined below); provided that, except as
otherwise provided herein, the Option shall terminate and be of no further
force and effect upon the earliest to occur of (i) the Effective Time of the
Merger, (ii) 12 months after the first occurrence of a Purchase Event or
(iii) termination of the Merger Agreement prior to the occurrence of a
Purchase Event (unless such termination itself constitutes a Purchase Event).
Notwithstanding the termination of the Option, Grantee shall be entitled to
purchase those Option Shares with respect to which it has exercised the
Option pursuant to this Section 2(a) in accordance with the terms hereof
prior to the termination of the Option. The termination of the Option shall
not affect any rights hereunder which by their terms extend beyond the date
of such termination.
(b) As used herein, a "Purchase Event" means the termination of
the Merger Agreement under any circumstance which would entitle Grantee to
receive any fee from the Issuer pursuant to Section 7.2(b) of the Merger
Agreement.
(c) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 20 business days from such
Notice Date for the closing of such purchase (a "Closing"; and the date of
such Closing, a "Closing Date"); provided that such Closing shall be held
only if (A) such purchase would not otherwise violate or cause the violation
of applicable law (including the HSR Act) and (B) no law, rule or regulation
shall have been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order, decree or ruling issued
by a court or other Governmental Entity of competent jurisdiction shall be in
effect, which prohibits delivery of such Option Shares (and the parties
hereto shall use their reasonable best efforts to have any such order,
injunction, decree or ruling vacated or reversed). If such Closing cannot be
consummated by reason of a restriction set forth in clause (A) or (B) above,
notwithstanding the provisions of Section 2(a), such Closing Date shall be
within 20 business days following the elimination of such restriction.
3. Payment and Delivery of Certificates. (a) On each Closing
Date, Grantee shall pay to Issuer in immediately available funds by wire
transfer to a bank account designated by Issuer an amount equal to the
Purchase Price multiplied by the Option Shares to be purchased on such
Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear of all
Liens, and Grantee shall deliver to Issuer a letter agreeing that Grantee
shall not offer to sell or otherwise dispose of such Option Shares in
violation of applicable law or the provisions of this Agreement. If, at the
time of issuance of any Option Shares pursuant to an exercise of all or part
of the Option hereunder, Issuer shall not have redeemed the Xxxx-XxXxx Rights
(the "Rights"), or shall have issued any similar securities, then each Option
Share issued pursuant to such exercise shall also represent a corresponding
Right or new rights with terms substantially the same as and at least as
favorable to Grantee as are provided under the Rights Agreement or any
similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
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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 OCTOBER 14, 1998. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE
ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in 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 SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required for purposes
of the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference.
4. Authorized Stock. Issuer hereby represents and warrants to
Grantee that Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the
date hereof until the obligation to deliver Issuer Common Stock upon the
exercise of the Option or any Substitute Option (as hereinafter defined)
terminates, will have reserved for issuance, upon exercise of the Option or
any Substitute Option, shares of Issuer Common Stock necessary for Grantee to
exercise the Option or Substitute Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional shares
of Issuer Common Stock or other securities which may be issued pursuant to
Section 6 upon exercise of the Option or Substitute Option. The shares of
Issuer Common Stock to be issued upon due exercise of the Option or
Substitute Option, including all additional shares of Issuer Common Stock or
other securities which may be issuable upon exercise of the Option or
Substitute Option pursuant to Section 6, upon issuance pursuant hereto, shall
be duly and validly issued, fully paid and nonassessable, and shall be
delivered free and clear of all Liens, including any preemptive rights of any
stockholder of Issuer.
5. Purchase Not for Distribution. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option or Substitute Option will not be taken
with a view to the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt from
registration under the Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the
event of any change in Issuer Common Stock by reason of a reclassification,
recapitalization, stock split, split-up, combination, exchange of shares,
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stock dividend, dividend payable in any other securities, or any similar
event, the type and number of shares or securities subject to the Option, and
the Purchase Price therefor, shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction, so that
Grantee shall receive upon exercise of the Option the number and class of
shares or other securities or property that Grantee would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such event or the record date therefor, as applicable. If any
additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the immediately
preceding sentence), the number of shares of Issuer Common Stock subject to
the Option shall be adjusted so that, after such issuance, it equals 19.9% of
the number of shares of Issuer Common Stock then issued and outstanding,
without giving effect to any shares subject to or issued pursuant to the
Option.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee
or one of its Subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such merger, the
shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall after such merger represent less than 50%
of the outstanding voting securities of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its Subsidiaries, then, and in each such case,
the agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon the
terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of Grantee, of either
(I) the Acquiring Corporation (as defined below) or (II) any person that
controls the Acquiring Corporation (any such person specified in clause (I)
or (II) being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option;
provided that the exercise price therefor and number of shares subject
thereto shall be as set forth in this Section 6 and the repurchase rights
relating thereto shall be as set forth in Section 8; provided, further, that
the Substitute Option shall be exercisable immediately upon issuance without
the occurrence of a Purchase Event; and provided, further, that if the terms
of the Substitute Option cannot, for legal reasons, be
the same as the Option (subject to the variations described in the foregoing
provisos), such terms shall be as similar as possible and in no event less
advantageous to Grantee. Substitute Option Issuer shall also enter into an
agreement with Grantee in substantially the same form as this Agreement
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(subject to the variations described in the foregoing provisos), which shall
be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as defined below) as is equal to the
Assigned Value (as defined below) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided
by the Average Price (as defined below), rounded up to the nearest whole
share. The exercise price per share of Substitute Common Stock of the
Substitute Option (the "Substitute Option Price") shall then be equal to the
Purchase Price multiplied by a fraction in which the numerator is the number
of shares of Issuer Common Stock for which the Option was theretofore
exercisable and the denominator is the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the
aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
outstanding Substitute Common Stock but for the limitation in the first
sentence of this Section 6(e), Substitute Option Issuer shall make a cash
payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 6(e) over (ii) the value of the Substitute Option after giving effect
to the limitation in te first sentence of this Section 6(e). This difference
shall be determined in good faith by a nationally recognized investment
banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in
Section 6(b) unless the Acquiring Corporation and, if applicable, any
beneficial owner of 50% or more of the outstanding voting stock of the
Acquiring Corporation (after giving effect to the transaction) assume in
writing all the obligations of Issuer hereunder and take all other actions
that may be necessary so that the provisions of this Agreement are given full
force and effect (including, without limitation, any action that may be
necessary so that the holders of the other shares of common stock issued by
Substitute Option Issuer are not entitled to exercise any rights comparable
to the Rights by reason of the issuance or exercise of the Substitute Option
and the shares of Substitute Common Stock are otherwise in no way
distinguishable from or have lesser economic value than other shares of
common stock issued by Substitute Option Issuer (other than any diminution in
value resulting from the fact, if applicable, that the shares of Substitute
Common Stock are restricted securities, as defined in Rule 144 under the
Securities Act or any successor provision)).
(g) For purposes of this Agreement, the following terms have the
following meanings:
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(1) "Acquiring Corporation" means (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving corporation and (iii) the transferee of all or substantially
all of Issuer's assets.
(2) "Assigned Value" means the highest of (w) the price per share
of Issuer Common Stock at which a tender offer or exchange offer for
Issuer Common Stock has been made after the date hereof and prior to the
consummation of the consolidation, merger or sale referred to in Section
6(b), (x) the price per share to be paid by any third party or the
consideration per share to received by holders of Issuer Common Stock,
in each case pursuant to the agreement with Issuer with respect to the
consolidation, merger or sale referred to in Section 6(b), (y) the
highest closing sales price per share for Issuer Common Stock quoted on
the NYSE (or if such Issuer Common Stock is not quoted on the NYSE, the
highest bid price per share as quoted on the National Association of
Securities Dealers Automated Quotation System or, if the shares of
Issuer Common Stock are not quoted thereon, on the principal trading
market on which such shares are traded as reported by a recognized
source) during the 12-month period immediately preceding the
consolidation, merger or sale referred to in Section 6(b) and (z) in the
event the transaction referred to in Section 6(b) is a sale of all or
substantially all of Issuer's assets, an amount equal to (i) the sum of
the price paid in such sale for such assets (including assumed
liabilities) and the current market value of the remaining assets of
Issuer, as determined in good faith by a nationally recognized
investment banking firm selected by Grantee, divided by (ii) the number
of shares of Issuer Common Stock outstanding at such time. In the event
that a tender offer or exchange offer is made for Issuer Common Stock or
an agreement is entered into for a merger or consolidation involving
consideration other than cash, the value of the securities or other
property issuable or deliverable in exchange for Issuer Common Stock
shall be determined in good faith by a nationally recognized investment
banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price per
share of a share of Substitute Common Stock quoted on the NYSE (or if
such Substitute Common Stock is not quoted on the NYSE, the highest bid
price per share as quoted on the National Association of Securities
Dealers Automated Quotation System or, if the shares of Substitute
Common Stock are not quoted thereon, on the principal trading market on
which such shares are traded as reported by a recognized source) for the
twenty trading days immediately preceding the fifth business day prior
to the consolidation, merger or sale in question, but in no event higher
than the closing price of the shares of Substitute Common Stock on the
day preceding such consolidation, merger or sale; provided that if
Substitute Option Issuer is Issuer, the Average Price shall be computed
with respect to a share of common stock issued by Issuer, the person
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merging into Issuer or by any company which controls such person, as
Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital stock
(or similar equity interest) with the greatest voting power in respect
of the election of directors (or persons similarly responsible for the
direction of the business and affairs) of the Substitute Option Issuer.
7. Repurchase of Option and Option Shares. (a) Notwithstanding
the provisions of Section 2(a), at any time commencing upon the first
occurrence of a Repurchase Event (as defined below) and ending 12 months
thereafter, Issuer (or any successor entity thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the
Option (if and to the extent not previously exercised or
terminated) at a price equal to the excess, if any, of (x) the
Applicable Price (as defined below) as of the Section 7 Request
Date (as defined below) for a share of Issuer Common Stock over (y)
the Purchase Price (subject to adjustment pursuant to Section
6(a)), multiplied by the number of shares of Issuer Common Stock
with respect to which the Option has not been exercised (the
"Option Repurchase Price"); and
(ii) at the request of an owner of Option Shares from time to
time, repurchase such number of Option Shares as such owner shall
designate at a price equal to the Applicable Price as of the
Section 7 Request Date multiplied by the number of Option Shares
requested to be repurchased by such owner (the "Option Share
Repurchase Price").
(b) If Grantee or an owner of Option Shares exercises its rights
under this Section 7, Issuer shall, within 10 business days after the
Section 7 Request Date, pay the Option Repurchase Price or Option Share
Repurchase Price, as the case may be, in immediately available funds, and
Grantee or such owner, as the case may be, shall surrender to Issuer the
Option or Option Shares, as the case may be.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Applicable Price", as of any date, means the highest of (A)
the highest price per share at which a tender offer or exchange offer
has been made for shares of Issuer Common Stock after the date hereof
and on or prior to such date, (B) the highest price per share to be paid
by any third party for shares of Issuer Common Stock or the
consideration per share to be received by holders of Issuer Common
Stock, in each case pursuant to an agreement for an Acquisition Proposal
with Issuer entered into on or prior to such date or (C) the highest
closing sales price per share of Issuer Common Stock quoted on the NYSE
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(or if Issuer Common Stock is not quoted on the NYSE, the highest bid
price per share as quoted on the National Association of Securities
Dealers Automated Quotations System or, if the shares of Issuer Common
Stock are not quoted thereon, on the principal trading market on which
such shares are traded as reported by a recognized source) during the 60
business days preceding such date. If the consideration to be offered,
paid or received pursuant to either of the foregoing clauses (A) or (B)
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 selected by Grantee.
(ii) "Repurchase Event" means the occurrence of a Purchase Event
followed by the consummation of any transaction the proposal of which
would constitute an Acquisition Proposal.
(iii) "Section 7 Request Date" means the date on which Grantee or an
owner of Option Shares exercises its rights under this Section.
8. Repurchase of Substitute Option. (a) At any time after
issuance of the Substitute Option and prior to the expiration of the
Substitute Option, Substitute Option Issuer (or any successor entity thereof)
shall:
(i) at the request of Grantee, repurchase from Grantee the
Substitute Option (if and to the extent not previously exercised or
terminated) at a price equal to the excess, if any, of (x) the Highest
Closing Price as of the Section 8 Request Date (as defined below) for a
share of Substitute Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 6(a)), multiplied by the number of shares
of Substitute Common Stock with respect to which the Substitute Option
has not been exercised (the "Substitute Option Repurchase Price"); and
(ii) at the request of an owner of shares of Substitute Common
Stock issued upon exercise of the Substitute Option, repurchase such
number of shares of Substitute Common Stock as such owner shall
designate at a price equal to the Highest Closing Price as of the
Section 8 Request Date multiplied by the number of shares of Substitute
Common Stock requested to be repurchased by such owner (the "Substitute
Share Repurchase Price").
(b) If Grantee or an owner of shares of Substitute Common Stock
issued upon exercise of the Substitute Option exercises its rights under this
Section 8, Substitute Option Issuer shall, within 10 business days after the
Section 8 Request Date, pay the Substitute Option Repurchase Price or
Substitute Share Repurchase Price, as the case may be, in immediately
available funds, and Grantee or such owner, as the case may be, shall
surrender to Issuer the Option or shares of Substitute Common Stock, as the
case may be.
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(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Highest Closing Price" means the highest closing sales price
for shares of Substitute Common Stock quoted on the NYSE (or if the
Substitute Common Stock is not quoted on the NYSE, the highest bid price
per share as quoted on the National Association of Securities Dealers
Automated Quotations System or, if the shares of Substitute Common Stock
are not quoted thereon, on the principal trading market on which such
shares are traded as reported by a recognized source) during the six-
month period preceding the Section 8 Request Date; and
(ii) "Section 8 Request Date" means the date on which Grantee or an
Owner exercises its rights under this Section.
9. Registration Rights. Issuer shall, if requested by Grantee or
any owner of Option Shares (collectively with Grantee, the "Owners") at any
time and from time to time within three years of the first exercise of the
Option, as expeditiously as possible prepare and file up to two registration
statements under the Securities Act if such registration is necessary in
order to permit the sale or other disposition of any or all shares of
securities that have been acquired by or are issuable to such Owners upon
exercise of the Option in accordance with the intended method of sale or
other disposition stated by such Owners, including a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities under any applicable state securities laws. Issuer shall use all
reasonable efforts to cause each such registration statement to become
effective, to obtain all consents or waivers of other parties which 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 Issuer hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
one or more periods of time not exceeding 30 days in the aggregate if the
Board of Directors of Issuer shall have determined that the filing of such
registration statement or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect Issuer. Any registration statement prepared and filed under this
Section 9, and any sale covered thereby, shall be at Issuer's expense except
for underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Owners' counsel related thereto. The Owners shall provide
all information reasonably inclusion in any registration statement to be
filed hereunder. If during the time period referred to in the first sentence
of this Section 9 Issuer effects a registration under the Securities Act of
Issuer Common Stock for its own account or for any other stockholders of
Issuer (other than on Form S-4 or Form S-8, or any successor form), it shall
allow the Owners the right to participate in such registration, and such
participation shall not affect the obligation of Issuer to effect two
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registration statements for the Owners under this Section 9; provided that,
if the managing underwriters of such offering advise Issuer in writing that
in their opinion the number of shares of Issuer Common Stock requested to be
included in such registration exceeds the number which can be sold in such
offering, Issuer shall include the shares requested to be included therein by
the Owners pro rata with the shares intended to be included therein by
Issuer. In connection with any registration pursuant to this Section 9,
Issuer and the Owners shall provide each other and any underwriter of the
offering with customary representations, warranties, covenants,
indemnification and contribution in connection with such registration.
10. Listing; Reasonable Best Efforts. (a) If Issuer Common Stock
or any other securities to be acquired upon exercise of the Option are then
listed on the NYSE or any other securities exchange or market, Issuer, upon
the request of any Owner, will promptly file an application to list the
shares of Issuer Common Stock or other securities to be acquired upon
exercise of the Option on the NYSE or such other securities exchange or
market and will use its best efforts to obtain approval of such listing as
soon as practicable.
(b) Issuer will use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
permit the exercise of the Option or the Substitute Option in accordance with
the terms and conditions hereof, as soon as practicable after the date
hereof, including making any appropriate filing of pursuant to the HSR Act
and any other Regulatory Law, supplying as promptly as practicable any
additional information and documentary material that may be requested
pursuant to the HSR Act and any other Regulatory Law, and taking all other
actions necessary to cause the expiration or termination of the applicable
waiting periods under the HSR Act as soon as practicable.
11. Limitation of Grantee Profit. (a) Notwithstanding any other
provision herein, in no event shall Grantee's Total Profit (as defined below)
exceed $70 million (the "Maximum Profit") and, if it otherwise would exceed
such amount, Grantee, at its sole discretion, shall either (i) reduce the
number of shares subject to the Option, (ii) deliver to Issuer for
cancellation shares of Issuer Common Stock (or other securities into which
such Option Shares are converted or exchanged), (iii) pay cash to Issuer, or
(iv) any combination of the foregoing, so that Grantee's actually realized
Total Profit shall not exceed the Maximum Profit after taking into account
the foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall mean:
(i) the aggregate amount of (A) any excess of (x) the net cash amounts
received by Grantee pursuant to a sale of Option Shares (or securities into
which such shares are converted or exchanged) to any unaffiliated third
party within 12 months after the exercise of the Option, over (y) the
Grantee's aggregate purchase price for such Option Shares (or other
securities), plus (B) any amounts received by Grantee on the transfer
of the Option (including amounts payable to Grantee pursuant to Section 7),
plus (C) any equivalent amounts with respect to the Substitute Option, plus
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(D) any amounts received by Grantee pursuant to Section 7.2 of the Merger
Agreement, minus (ii) the amounts of any cash previously paid to Issuer
pursuant to this Section 11 plus the value of the Option Shares (or other
securities) previously delivered to Issuer for cancellation pursuant to this
Section 11.
(c) Notwithstanding any other provision of this Agreement, nothing
in this Agreement shall affect the ability of Grantee to receive, nor relieve
Issuer's obligation to pay, any payment provided for in Section 7.2 of the
Merger Agreement; provided that if and to the extent the Total Profit
received by Grantee would exceed the Maximum Profit following receipt of such
payment, Grantee shall be obligated to comply with the terms of Section 11(a)
within 30 days of the latest of (i) the date of receipt of such payment, (ii)
the date of receipt of the net cash by Grantee pursuant to the sale of Option
Shares (or securities into which such Option Shares are converted or
exchanged) to any unaffiliated party within 12 months after the exercise of
this Option with respect to such Option Shares, (iii) the date of receipt of
net cash from disposition of the Option and (iv) the date of receipt of
equivalent amounts pursuant to the sale of the Substitute Option or shares of
Substitute Common Stock (or other securities into which such Substitute
Common Stock is converted or exchanged).
(d) For purposes of Section 11(a) and clause (ii) of Section 11(b),
the value of any Option Shares delivered to Issuer shall be the Assigned Value
of such Option Shares and the value of any Substitute Common Stock delivered
to Issuer shall be the Highest Closing Price of such Substitute Common Stock.
12. Loss, Theft, Etc. of Agreement. This Agreement (and the
Option granted hereby) is exchangeable, without expense, at the option of
Grantee, upon presentation and surrender of this Agreement at the principal
office of Issuer for other Agreements providing for Options of different
denominations entitling the holder thereof to purchase in the aggregate the
same number of shares of Issuer Common Stock purchasable hereunder. The
terms "Agreement" and "Option" as used herein include any other Agreements
and related Options for which this Agreement (and the Option granted hereby)
may be exchanged. Upon receipt by Issuer 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, 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 anyone.
13. Miscellaneous. (a) Expenses. Except as otherwise provided
in Section 9 hereof or in the Merger Agreement, each of the parties hereto
shall bear and pay all 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.
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(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,
together with the Merger Agreement, (a) 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 (b) is not
intended to confer upon any person other than the parties hereto any rights
or remedies hereunder. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or a federal or
state regulatory agency to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines
that the Option does not permit Grantee to acquire, or does not require
Issuer (or Substitute Option Issuer) to repurchase, the full number of shares
of Issuer Common Stock (or Substitute Common Stock) as provided in Sections 2
and 7 (or in the case of Substitute Common Stock Sections 2 and 8), as
adjusted pursuant to Section 6, it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser
number of shares as may be permissible without any amendment or modification
hereof.
(D) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED THEREIN.
(e) 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.
(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given as set forth in Section 8.2 of the
Merger Agreement.
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the
same agreement and shall become effective when both counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in whole to any
affiliate of Grantee at any time. Except as provided in the next sentence,
Grantee may not, without the prior written consent of Issuer (which shall not
be unreasonably withheld), assign this Agreement to any other person. Upon
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the occurrence of a Purchase Event, Grantee may sell, transfer, assign or
otherwise dispose of, in whole at any time, its rights and obligations
hereunder. In the case of any sale, transfer, assignment or disposition of
this Option, Issuer shall do all things reasonably necessary to facilitate
such transaction. This Agreement shall not be assignable by Issuer except by
operation of law. 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.
(i) Representations and Warranties. The representations and
warranties contained in Sections 3.1(a) and 3.2(a) of the Merger Agreement,
and, to the extent they relate to this Stock Option Agreement, in Sections
3.1(c), (f), (l) and (m) and 3.2(c), (f) and (m) of the Merger Agreement, are
incorporated herein by reference.
(j) Rights Plan. Until the Option has been exercised or
terminated in full and Grantee no longer holds any Option Shares, Issuer
shall not amend, modify or waive any provision of the Xxxx-XxXxx Rights
Agreement (the "Rights Agreement") or take any other action which would cause
Grantee or any of its "Affiliates" or "Associates" to become an "Acquiring
Person", or which would cause a "Stock Acquisition Date" or "Distribution
Date", any event specified in Section 11(a)(ii) or 13 of the Rights Agreement
or any similar event with respect to the Rights to occur, by reason of the
existence or exercise (in whole or in part) of the Option, the beneficial
ownership by Grantee or any of its "Affiliates" or "Associates" of any of the
Option Shares, or the consummation of the other transactions contemplated
hereby (all terms in quotes are used as defined in the Rights Agreement).
This covenant shall also apply to any Substitute Option or shares of
Substitute Common Stock issued in respect thereof, and to any securities into
which any Option Shares or Substitute Common Stock are converted or
exchanged.
(k) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and 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.
(l) Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity. Both 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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(m) Submission to Jurisdiction; Waivers. Each of Issuer and
Grantee irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
may be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of Issuer and Grantee hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the nonexclusive jurisdiction of
the aforesaid courts. Each of Issuer and Grantee hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a)
any claim that it is not personally subject to the jurisdiction of the above-
named courts for any reason other than the failure to lawfully serve process,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized as of the day and year first written above.
XXXX-XxXXX CORPORATION
By:/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
ORYX ENERGY COMPANY
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chairman/CEO
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