Exhibit 10.1
STOCK OPTION AGREEMENT, dated as of the 31st day of March, 1999
(this "Agreement"), between Atlantic Richfield Company, a Delaware
corporation ("Issuer"), and BP Amoco p.l.c., an English public limited
company (including any assigns permitted under Section 11 hereof,
"Grantee").
RECITALS
A. The Merger Agreement. Contemporaneously with the entry into
this Agreement and the grant of the Option (as defined in Section 1(a)),
Issuer, Grantee, and Prairie Holdings, Inc., a Delaware corporation and a
wholly-owned subsidiary of Grantee ("Merger Sub"), are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Grantee and Issuer intend to effect the
Merger (as defined in the Merger Agreement).
B. The Stock Option Agreement. As an inducement and condition to
Grantee's willingness to enter into the Merger Agreement, and in
consideration thereof, the board of directors of Issuer has approved the
grant to Grantee of the Option pursuant to this Agreement and the
acquisition of Common Stock (as defined below) by Grantee pursuant to this
Agreement; provided, that such grant was expressly conditioned upon, and
made to have no effect until after, execution and delivery by Issuer,
Grantee and Merger Sub of the Merger Agreement.
C. Capitalized Terms. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. The Option. (a) Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase, subject to
the terms hereof, up to 64,861,617 fully paid and nonassessable shares
("Option Shares") of common stock, par value $2.50 per share, of Issuer
("Common Stock") at a price per share in cash equal to $82.82 (subject to
adjustment in accordance with this Agreement, the "Option Price");
provided, however, that in no event shall the number of Option Shares
exceed 19.9% of the shares
of Common Stock issued and outstanding at the time of exercise (without
giving effect to the Option Shares issued or issuable under the Option)
(the "Maximum Applicable Percentage"). The number of Option Shares
purchasable upon exercise of the Option and the Option Price are subject to
adjustment as set forth herein.
(b) In the event that any additional shares of Common Stock are
issued or otherwise become outstanding after the date of this Agreement
(other than pursuant to this Agreement), the aggregate number of Option
Shares purchasable upon exercise of the Option shall automatically be
increased (without any further action on the part of Issuer or Grantee
being necessary) so that, taking into consideration any such issuance, such
aggregate number equals the Maximum Applicable Percentage.
(c) The Option Price with respect to the Option Shares as to
which Grantee may propose to exercise this Option pursuant to Section 2, or
to request the repurchase of this Option by Issuer pursuant to Section 9
(in either case, the "Proposed Exercise Shares"), shall not be greater
than, and shall be adjusted downward to the extent necessary to be, the
Maximum Option Price (as defined below). The "Maximum Option Price" with
respect to any Proposed Exercise Shares shall be that price per share in
cash at which the Option must be exercisable in order to result in a Total
Profit (as defined in Section 19) to Grantee, determined as of the date of
such proposal, of $25,000,000, assuming for such purpose that this Option
were exercised on such date for all of the Option Shares subject to this
Option and that all of such Option Shares were sold for cash at the closing
market price on the New York Stock Exchange, Inc. (the "NYSE") for the
Common Stock as of the close of business on the preceding trading day (less
customary brokerage commissions); provided that the Maximum Option Price
may not be less than the par value per share of the Common Stock.
2. Exercise; Closing. (a) Conditions to Exercise; Termination.
Grantee may exercise the Option, in whole but not in part (except as
provided in Section 14 and Section 19), by giving a written notice thereof
as provided in Section 2(d) within 180 days following the occurrence of a
Triggering Event (as defined in Section 2(b)) unless prior to the giving of
such notice the Effective Time (as defined in the Merger Agreement) shall
have occurred. The Option shall terminate upon either (i) the occurrence of
the Effective Time or (ii) the close of business on the earlier of (x) the
date 180 days after the date on which a Triggering Event occurs and (y) the
date on which it is no
longer possible for a Triggering Event to occur, provided that no
Triggering Event shall have occurred prior to or upon such date.
(b) Triggering Event. A "Triggering Event" shall have occurred if
the Merger Agreement is terminated and Grantee then or thereafter becomes
entitled to receive an aggregate of $450,000,000 (taking into account any
amounts to which Grantee will have theretofore become entitled) as the ARCO
Termination Amount pursuant to Section 5.5.2 of the Merger Agreement.
(c) Notice of Triggering Event by Issuer. Issuer shall notify
Grantee promptly in writing of the occurrence of any Triggering Event and
the number of shares of Common Stock issued and outstanding as of the date
of such notice, it being understood that the giving of such notice by
Issuer shall not be a condition to the right of Grantee to exercise the
Option.
(d) Notice of Exercise by Grantee. If Grantee shall be entitled
to and wishes to exercise the Option, it shall send to Issuer a written
notice (an "Exercise Notice" and the date of which is referred to herein as
the "Notice Date") specifying (i) the total amount payable to Issuer on the
exercise of the Option in respect of the Option Shares and (ii) a place and
date (the "Closing Date") not earlier than three business days nor later
than 60 business days from the Notice Date for the closing of such purchase
(the "Closing"); provided, that if a filing is required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or prior notification to or application for approval of any other
regulatory authority in the U.S., U.K. or elsewhere is required in
connection with such purchase, Grantee and Issuer, as required, promptly
after the giving of the Exercise Notice shall file any and all required
notices, applications or other documents necessary for approval and shall
expeditiously process the same and in such event the period of time
referred to in clause (ii) shall commence on the date on which Grantee
furnishes to Issuer a supplemental written notice setting forth the Closing
Date, which notice shall be furnished as promptly as practicable after all
required notification periods shall have expired or been terminated and all
required approvals shall have been obtained and all requisite waiting
periods shall have passed. Each of Grantee and the Issuer agrees to use its
best reasonable efforts to cooperate with and provide information to Issuer
or Grantee, as the case may be, with respect to any required
filing, notice or application for approval to such regulatory authority.
(e) Payment of Purchase Price. At the Closing, Grantee shall pay
to Issuer the aggregate Option Price for the Option Shares in immediately
available funds by a wire transfer to a bank account designated by Issuer;
provided, that failure or refusal of Issuer to designate such a bank
account shall not preclude Grantee from exercising the Option.
(f) Delivery of Common Stock. At the Closing, simultaneously with
the payment of the purchase price by Grantee, Issuer shall deliver to
Grantee or such other Person as Grantee may nominate in writing, a
certificate or certificates representing the number of Option Shares
purchased by Grantee. If at the time of issuance of the Option Shares
hereunder, Issuer shall have issued any rights or other securities which
are attached to or otherwise associated with the Common Stock, then each
Option Share shall also represent such rights or other securities with
terms substantially the same as, and at least as favorable to Grantee as,
are provided under any shareholder rights agreement or similar agreement of
Issuer then in effect.
(g) Resale Restriction. The Grantee will not sell or transfer any
Option Shares or other securities acquired by Grantee upon exercise of the
Option except pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or in a
transaction exempt from registration under the Securities Act. Each
certificate for Common Stock delivered at the Closing may be endorsed with
a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to resale restrictions arising under the Securities Act of
1933, as amended."
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such reference if Grantee
shall have delivered to Issuer a copy of a letter from the staff of the
Securities and Exchange Commission, or a written opinion of counsel, in
form and substance reasonably satisfactory to Issuer, to the effect that
such legend is not required for purposes of the Securities Act. In
addition, such certificate or certificates shall bear any other legend as
may be required by applicable law.
(h) Ownership of Record; Tender of Purchase Price; Expenses. Upon
the tender of the applicable purchase price in immediately available funds
(following the giving of the Exercise Notice) at the Closing, Grantee shall
be deemed to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of Issuer
may then be closed or that a certificate or certificates representing such
shares of Common Stock may not have been delivered to Grantee. Issuer shall
pay all expenses, and any and all federal, national, state, provincial and
local taxes and other charges worldwide that may be payable in connection
with the preparation, issuance and delivery of stock certificates under
this Section 2 in the name of Grantee or its nominee, assignee, transferee
or designee.
3. Covenants of Issuer. In addition to its other agreements and
covenants herein, Issuer agrees:
(a) Shares Reserved for Issuance. To maintain, free from
preemptive rights, sufficient authorized but unissued or treasury
shares of Common Stock so that the Option may be fully exercised
without additional authorization of Common Stock after giving effect
to all other options, warrants, convertible securities and other
rights of third parties to purchase shares of Common Stock from
Issuer, and to issue the appropriate number of shares of Common Stock
pursuant to the terms of this Agreement;
(b) No Avoidance. Not to avoid or seek to avoid (whether by
charter amendment or through reorganiza tion, consolidation, merger,
issuance of rights, dissolution or sale of assets, or by any other
volun tary act) the observance or performance of any of the covenants,
agreements or conditions to be observed or performed hereunder by
Issuer; and
(c) Further Assurances. Promptly after the date hereof to take
all actions as may from time to time be required (including (i)
complying with all applicable premerger notification, reporting and
waiting period requirements under the HSR Act and (ii) in the event
that prior filing with, notification to or approval of any other
regulatory authority in the U.S., U.K. or elsewhere is necessary
before the Option may be exercised, cooperating fully with Grantee in
preparing and processing the required filings, notices or appli
cations) in order to permit Grantee to exercise the Option, to
purchase Option Shares pursuant to such
exercise and otherwise to exercise Grantee's rights under this
Agreement and to take all action necessary to protect the rights of
Grantee against dilution.
4. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:
(a) Merger Agreement. Issuer hereby makes each of the
representations and warranties contained in Sections 2.1.2.2 and 2.1.4
of the Merger Agreement as they relate to Issuer and this Agreement,
as if such representations and warranties were set forth herein.
(b) Shares Reserved for Issuance; Capital Stock. The Option
Shares issuable in accordance with the terms of this Agreement have
been duly reserved for issuance by Issuer and upon any issuance of
such shares in accordance with the terms hereof, such Option Shares
will be duly authorized, validly issued, fully paid and nonassessable,
and will be delivered free and clear of any lien, pledge, security
interest, claim or other encumbrance (other than those created by this
Agreement) and not subject to any preemptive rights.
(c) Corporate Authority. Issuer has all requisite corporate power
and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby; the execution and
delivery of this Agreement have been duly authorized by all necessary
corporate action on the part of Issuer, and, assuming the due
authorization, execution and delivery of this Agreement by Grantee,
this Agreement constitutes a valid and binding agreement of Issuer
enforceable against Issuer in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(d) Takeover Statutes. Assuming that Grantee's representation and
warranty in Section 2.1.10.1 of the Merger Agreement is true and
correct, Issuer's board of directors has taken all appropriate and
necessary actions such that Section 203 of the DGCL is inapplicable to
the execution and delivery of this Agreement and to the consummation
of the transactions contemplated hereby. No other "fair price,"
"moratorium," "control share acquisition" or other
similar anti-takeover statute or regulation (each a "Takeover
Statute") as in effect on the date hereof is applicable to the
execution and delivery of this Agreement, the Common Stock issuable
hereunder or to the other transactions contemplated by this Agreement.
No anti-takeover provision contained in Issuer's certificate of
incorporation or its by-laws prohibits or restricts the execution and
delivery of this Agreement or, at the time of any exercise of the
Option, will prohibit or restrict the issuance of Common Stock
hereunder or the consummation of the other transactions contemplated
by this Agreement.
5. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that Grantee has all requisite corporate
power and authority and has taken all corporate action necessary in order
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby; the execution and delivery
of this Agreement have been duly authorized by all necessary corporate
action on the part of Grantee, and, assuming the due authorization,
execution and delivery of this Agreement by Issuer, constitutes a valid and
binding agreement of Grantee enforceable against Grantee in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
6. Replacement. Upon (i) receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Agreement, (ii) receipt by Issuer of reasonably satisfactory
indemnification in the case of loss, theft or destruction and (iii)
surrender and cancellation of this Agreement in the case of mutilation,
Issuer will execute and deliver a new Agreement of like tenor and date. Any
such new Agreement executed and delivered shall constitute an additional
contractual obligation on the part of Issuer, whether or not the Agreement
so lost, stolen, destroyed or mutilated shall at any time be enforceable by
any Person other than the holder of the new Agreement.
7. Adjustments. In addition to the adjustment to the total number
of Option Shares pursuant to Section 1(b) and the adjustment to the Option
Price pursuant to Section 1(c), the total number of Option Shares
purchasable upon the exercise of the Option hereof and the Option Price
shall be subject to adjustment from time to time as follows:
(a) In the event of any change in the outstanding shares of
Common Stock by reason of stock dividends, splits, combinations,
subdivisions or reclassifications, mergers, recapitalizations,
extraordinary dividends or distributions, exchanges of shares or the
like, the type and number of Option Shares purchasable upon exercise
of the Option shall be appropriately adjusted, and proper provision
shall be made in the agreements governing any such transaction, so
that (i) Grantee shall receive upon exercise of the Option the number
and class of shares, other securities, property or cash that Grantee
would have received in respect of the Option Shares purchasable upon
exercise of the Option if the Option had been exercised and such
Option Shares had been issued to Grantee immediately prior to such
event or the record date therefor, as applicable; and (ii) in the
event any additional shares of Common Stock are to be issued or
otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of Option
Shares purchasable upon exercise of the Option shall be increased so
that, after such issuance the number of Option Shares so purchasable
equals the Maximum Applicable Percentage of the number of shares of
Common Stock issued and outstanding immediately after the consummation
of such change; and
(b) Whenever the number of Option Shares purchasable upon
exercise hereof is adjusted as pro vided in this Section 7, the Option
Price shall be adjusted by multiplying the Option Price by a fraction,
the numerator of which is equal to the number of Option Shares
purchasable prior to the adjustment and the denominator of which is
equal to the number of Option Shares purchasable after the adjustment.
8. Registration. (a) Upon the occurrence of a Triggering Event,
Issuer shall, at the request of Grantee included in the Exercise Notice, as
promptly as practicable prepare, file and keep current a shelf registration
state ment under the Securities Act covering all Option Shares issued and
issuable pursuant to the Option and shall use its best efforts to cause
such registration statement to become effective and remain current in order
to permit the sale or other disposition of any Option Shares issued upon
exercise of the Option in accordance with any plan of disposition requested
by Grantee; provided, however, that Issuer may postpone the filing of a
registration statement relating to a registration request by Grantee under
this Section 8 for a
period of time (not in excess of 30 days) if in its judgment such filing
would require the disclosure of material information that Issuer has a bona
fide business purpose for preserving as confidential. Issuer will use its
best efforts to cause such registration statement first to become effective
and then to remain effective for 270 days from the day such registration
statement first becomes effective or until such earlier date as all shares
registered shall have been sold by Grantee. In connection with any such
registration, Issuer and Grantee shall provide each other with
representations, warranties, indemnities, contribution and other agreements
customarily given in connection with such registrations. If requested by
Grantee in connection with such registration, Issuer shall become a party
to any underwriting agreement relating to the sale of such shares, but only
to the extent of obligating Issuer in respect of representations,
warranties, indemnities, contribution and other agreements customarily made
by issuers in such underwriting agreements.
(b) In the event that Grantee so requests, the closing of the
sale or other disposition of the Option Shares or other securities pursuant
to a registration statement filed pursuant to Section 8(a) shall occur
substantially simultaneously with the exercise of the Option.
9. Repurchase of Option and/or Shares. (a) Repurchase; Repurchase
Price. At the request of Grantee, given in writing within 180 days
following the occurrence of a Triggering Event (or such later period as is
provided in Section 2(d) with respect to any required filing, notice or
application for approval or pursuant to a request by Grantee in accordance
with Section 10), (i) Issuer shall repurchase the Option from Grantee, in
whole but not in part (except as provided in Section 9(c) and Section 19),
at a price (the "Option Repurchase Price") equal to the number of Option
Shares then purchasable upon exercise of the Option multiplied by the
amount by which the Market Price (as defined below) exceeds the applicable
Option Price (giving effect to the Maximum Option Price) or (ii) Issuer
shall repurchase all Option Shares then owned by Grantee at a price (the
"Option Share Repurchase Price") equal to the number of such Option Shares
multiplied by the Market Price; provided, however, that the Option
Repurchase Price or the Option Share Repurchase Price, as the case may be,
shall be reduced to the extent necessary for it not to exceed the maximum
amount for which Issuer is permitted, without a vote of the stockholders of
Issuer, to repurchase the Option or Option Shares, as the case may be, on
the date
of repurchase in accordance with the provisions of Article VII of
the certificate of incorporation of Issuer. The term "Market Price" shall
mean, for any share of Common Stock, the average of the closing sale prices
during the 90-day period immediately preceding the delivery of the
Repurchase Notice on the Composite Tape for NYSE-listed stocks, or, if the
Common Stock is not quoted on the Composite Tape, on the NYSE, or if the
Common Stock is not listed on the NYSE, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which the Common Stock is listed, or if the Common Stock is not listed on
any such exchange, the average of the closing bid quotations with respect
to a share of Common Stock during the 90-day period immediately preceding
the date of the Repurchase Notice on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then is use, or if
no such quotations are available, the Market Price on the date of the
Repurchase Notice of a share of Common Stock, as determined by the Board of
Directors of Issuer in good faith.
(b) Method of Repurchase. Grantee may exercise its right to
require Issuer to repurchase the Option, in whole but not in part, or all
Option Shares then owned by Grantee pursuant to this Section 9 by
surrendering for such purpose to Issuer, at its principal office, this
Agreement or certificates for such Option Shares, as applicable,
accompanied by a written notice or notices stating that Grantee elects to
require Issuer to repurchase the Option or such Option Shares in accordance
with the provisions of this Section 9 (such notice, a "Repurchase Notice").
As promptly as practicable, and in any event within 15 business days after
the surrender of this Agreement or a certificate or certificates
representing Option Shares and the receipt of the Repurchase Notice
relating thereto, Issuer shall deliver or cause to be delivered to Grantee
the applicable Option Repurchase Price or the Option Share Repurchase
Price.
(c) Effect of Statutory or Regulatory Restraints on Repurchase.
To the extent that, upon or following the giving of a Repurchase Notice,
Issuer is prohibited under applicable law or regulation from repurchasing
the Option or any Option Shares subject to such Repurchase Notice (and
Issuer hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly
as practicable in order to accomplish such repurchase), Issuer shall
immediately so notify Grantee in writing and thereafter deliver or cause to
be delivered, from time to time, to Grantee the portion of the Option
Repurchase Price or the Option Share Repurchase
Price that Issuer is no longer prohibited from delivering, within 2
business days after the date on which it is no longer so prohibited;
provided, however, that upon notification by Issuer in writing of such
prohibition, Grantee may, within 5 days of receipt of such notification
from Issuer, revoke in writing its Repurchase Notice, whether in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer
shall promptly (i) deliver to Grantee that portion of the Option Repurchase
Price or the Option Share Repurchase Price that Issuer is not prohibited
from delivering; and (ii) deliver to Grantee, as appropriate, (A) with
respect to the Option, a new stock option agreement evidencing the right of
Grantee to purchase that number of Option Shares for which the surrendered
stock option agreement was exercisable at the time of delivery of the
Repurchase Notice less the number of shares as to which the Option
Repurchase Price has theretofore been delivered to Grantee, or (B) with
respect to Option Shares, a certificate for the Option Shares as to which
the Option Share Repurchase Price has not theretofore been delivered to
Grantee. Notwithstanding anything to the contrary in this Agreement,
including, without limitation, the time limitations on the exercise of the
Option, Grantee may give notice of exercise of the Option for 180 days
after a notice of revocation has been issued pursuant to this Section 9(c)
and thereafter exercise the Option in accordance with the applicable
provisions of this Agreement.
(d) Acquisition Transactions. In addition to any other
restrictions or covenants, Issuer hereby agrees that, in the event that
Grantee delivers a Repurchase Notice, it shall not enter or agree to enter
into an agreement or series of agreements relating to a merger with or into
or the consolidation with any other Person, the sale of all or
substantially all of the assets of Issuer or any similar transaction or
disposition unless the other party or parties to such agreement or
agreements agree to assume in writing Issuer's obligations under Section
9(a) and, notwithstanding any notice of revocation delivered pursuant to
the proviso to Section 9(c), Grantee may require such other party or
parties to perform Issuer's obligations under Section 9(a) unless such
party or parties are prohibited by law or regulation from such performance,
in which case such party or parties shall be subject to the obligations of
the Issuer under Section 9(c).
10. Extension of Exercise Periods. The 180-day periods for
exercise of certain rights under Sections 2 and 9 shall be extended in each
such case at the request of Grantee to the extent necessary to avoid
liability by
Grantee under Section 16(b) of the Exchange Act by reason of such exercise.
11. Assignment. Neither party hereto may assign or delegate any
of its rights or obligations under this Agreement or the Option to any
other Person without the express written consent of the other party, except
that this Agreement or the Option may be assigned to any direct or indirect
wholly owned Subsidiary of Grantee. Any attempted assignment or delegation
in contravention of the preceding sentence shall be null and void.
12. Filings; Other Actions. Each of Grantee and Issuer will use
its best efforts to make all filings with, notices to and applications for
approval of, and to obtain consents of, all third parties and governmental
authorities necessary for the consummation of the transactions contemplated
by this Agreement. Subject to applicable law and the rules and regulations
of the NYSE, the Issuer will promptly file an application to have the
Option Shares listed on the NYSE, subject to notice of issuance, and will
use its best reasonable efforts to obtain approval of such application;
provided, that if the Issuer is unable to effect such listing on the NYSE
by the Closing Date, the Issuer will nevertheless be obligated to deliver
the Option Shares upon the Closing Date.
13. Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement by
either party hereto and that the obligations of the parties hereto shall be
specifically enforceable through injunctive or other equitable relief.
14. Severability; Etc. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision unless the substitution of such
provision would materially frustrate the express intent and purposes of
this Agreement, and (b) the remainder of this Agreement and the application
of such provision to other Persons or circumstances shall not be affected
by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision,
or the application thereof, in any other
jurisdiction. If for any reason a court or regulatory agency determines
that Grantee is not permitted to acquire pursuant to Section 2 the full
number of Option Shares provided in Section 1(a) hereof (as adjusted
pursuant to Sections 1(b) and 7 hereof), it is the express intention of
Issuer to allow Grantee to acquire such lesser number of Option Shares as
may be permissible, without any amendment or modification hereof.
15. Notices. Notices, requests, instructions or other documents
to be given under this Agreement shall be in writing and shall be deemed
given (i) when sent if sent by facsimile, provided that the facsimile is
promptly confirmed by telephone confirmation thereof, (ii) when delivered,
if delivered personally to the intended recipient, and (iii) one business
day later, if sent by overnight delivery via a national courier service,
and in each case addressed to a party at the respective addresses of the
parties set forth in the Merger Agreement.
16. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO CONTRACTS TO BE PERFORMED WHOLLY IN SUCH STATE. The
parties hereby irrevocably submit to the jurisdiction of the Federal courts
of the United States of America located in the State of Delaware and the
state courts of the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and in
respect of the transactions contemplated hereby and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpre tation or enforcement hereof, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement may not be enforced in or by such
courts, and the parties irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a court.
The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and
agree that mailing of process or other papers in connection with any such
action or proceeding in the manner provided in Section 15, or in such other
manner as may be permitted by Law, shall be valid and sufficient service
thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 16.
17. Expenses. Except as otherwise expressly pro vided herein or
in the Merger Agreement, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such expense, except that Issuer shall be
responsible for all fees and expenses (other than underwriting discounts or
commissions) relating to the registration of securities pursuant to Section
8.
18. Entire Agreement, Etc. This Agreement, the Confidentiality
Agreement and the Merger Agreement (including any exhibits thereto, the BP
Amoco Disclosure Letter and the ARCO Disclosure Letter) constitute the
entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties
with respect to the subject matter hereof. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement is not intended to confer
upon any Person, other than the parties hereto, and their respective
successors and permitted assigns, any rights or remedies hereunder.
19. Limitation on Profit. (a) Notwithstanding any other provision
of this Agreement, in no event shall Grantee's Total Profit (as hereinafter
defined) plus any ARCO Termination Amount paid to Grantee pursuant to
Section 5.5.2 of the Merger Agreement exceed in the aggregate $500,000,000
(the "Maximum Amount") and, if it otherwise would exceed such amount,
Grantee, at its sole election, shall either (i) reduce the number of Option
Shares subject to this Option, (ii) deliver to the Issuer for cancellation
Option Shares previously purchased by Grantee, (iii) pay cash to the
Issuer, or (iv) any combination thereof, so that Grantee's actually
realized Total Profit, when aggregated with such ARCO Termination
Amount so paid to Grantee, shall not exceed the Maximum Amount taking into
account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, this
Option may not be exercised for a number of Option Shares as would, as of
the date of exercise, result in a Notional Total Profit (as defined below)
which, together with any ARCO Termination Amount theretofore paid to
Grantee pursuant to Section 5.5.2 of the Merger Agreement, and after giving
effect to any election made by Grantee under Section 19(a), would exceed
the Maximum Amount; provided, that nothing in this sentence shall restrict
any exercise of the Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount received
by Grantee pursuant to Issuer's repurchase of the Option or any Option
Shares pursuant to Section 9, less, in the case of any repurchase of Option
Shares, Grantee's purchase price for such Option Shares, and (ii) (x) the
fair market value, or the aggregate net cash amounts received by Grantee
pursuant to the sale, of Option Shares (or (A) any other securities into
which such Option Shares are converted or exchanged or (B) any property,
cash or other securities received pursuant to adjustments made under
Section 7 ("Additional Property")), less (y) Grantee's purchase price for
such Option Shares.
(d) As used herein, the term "Notional Total Profit" with respect
to the Option Shares subject to this Option shall be the Total Profit
determined as of the date of such proposal assuming that this Option were
exercised in full on such date and assuming that (i) such Option Shares (or
any other securities into which such Option Shares are converted or
exchanged) were sold for cash at the closing market price on the NYSE for
the Common Stock as of the close of business on the preceding trading day
(less customary brokerage commissions) and (ii) any Additional Property was
sold at fair market value.
20. Captions. The Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions
hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by duly authorized officers of the parties hereto as of the day
and year first hereinabove written.
ATLANTIC RICHFIELD COMPANY
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
BP AMOCO p.l.c.
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: (E.J.P. Xxxxxx) - Sir Xxxx Xxxxxx
Title: Chief Executive Officer
By: /s/ B.E. Xxxxx
----------------------------------------
Name: B.E. Xxxxx
Title: Executive Vice President
