EXECUTION COPY
AGREEMENT, dated April 13, 2005, between ▇▇▇▇-▇▇▇▇▇
Corporation, a Delaware corporation (the "COMPANY"),
the parties listed on the signature pages of this
agreement as Icahn Parties (each, an "ICAHN PARTY"
and, collectively, the "ICAHN PARTIES"), and the
parties listed on the signature pages of this
agreement as ▇▇▇▇ Parties (each, a "▇▇▇▇ PARTY" and,
collectively, the "▇▇▇▇ PARTIES").
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The Icahn Parties and the ▇▇▇▇ Parties have filed preliminary proxy
materials for use in connection with the Company's 2005 Annual Meeting of
Stockholders (collectively, the "PROXY MATERIALS") with the Securities and
Exchange Commission (the "SEC"), and each of the Icahn Parties and the ▇▇▇▇
Parties has agreed to immediately suspend their solicitation of proxies in
connection with such Annual Meeting and, upon the Company's acceptance of shares
for payment (the "TENDER ACCEPTANCE") in the Tender Offer (defined below), to
terminate such solicitation and to withdraw their slate of nominees to the
Company's board of directors. For the purpose of this Agreement, the filing of
amendments to a proxy statement and the filing of other proxy materials with the
SEC intended to be responsive to comments from the SEC do not constitute the
solicitation of proxies, all in a manner not inconsistent with the terms of this
Agreement.
The Company plans to announce a self tender offer to acquire between
$3.96 billion and $4.0 billion in purchase price of its common stock in a
modified "Dutch" auction with a price range of $85 to $92 per share, subject to
receipt of satisfactory financing pursuant to an existing bank commitment and
other customary conditions for issuer self tender offers (the "TENDER OFFER").
In consideration of the mutual promises, covenants and agreements
contained herein, the parties agree as follows:
1. Each of the Icahn Parties and the ▇▇▇▇ Parties, as applicable,
hereby suspend their solicitation of proxies in connection with the Company's
2005 Annual Meeting of Stockholders until the earlier of (1) May 25, 2005, (2)
April 29, 2005 if the Company has not commenced the Tender Offer by such date
and (3) the date, if any, on which the Tender Offer is terminated or abandoned
or the terms of which are amended in any material respect (other than an
amendment to increase the aggregate number of shares to be purchased in the
Tender Offer) (such earlier date, the "SOLICITATION DATE"), after which the
Icahn Parties and the ▇▇▇▇ Parties may at their election commence such
solicitation in accordance with terms of this Agreement. After the Tender
Acceptance, each of the Icahn Parties and the ▇▇▇▇ Parties agrees to withdraw
its notice of intent to nominate persons for election as directors of the
Company at the Company's 2005 Annual Meeting of Stockholders, dated March 2,
2005, pursuant to Article III, Section 10 of the Company's By-Laws, and shall
take all steps necessary to cease, and to cause all Affiliates (as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) immediately to cease, all efforts to nominate or elect directors to the
board of directors of the Company. After the Tender Acceptance, each of the
Icahn Parties and the ▇▇▇▇ Parties further agrees to vote for, and to
cause all Affiliates to vote for, the Company's nominees for election at the
2005 Annual Meeting of Stockholders.
2. Each of the Icahn Parties and the ▇▇▇▇ Parties agrees that, for a
period from the date of this Agreement through and including May 10, 2008 (the
"RESTRICTED PERIOD"), unless specifically invited in writing by the Company and
unless a majority of the Continuing Directors (as defined below) has given its
approval to such invitation, no such party will, nor will any such party permit
any of its Affiliates to, nor will any such party cause any other person to, in
any manner, directly or indirectly:
(a) make, or propose (publicly or otherwise), any tender or exchange
offer, merger or other transaction involving the Company or any Company
Affiliate or propose that the Company or any Company Affiliate engage in
or enter into any transaction or similar activity,
(b) make or propose (publicly or otherwise) any proxy solicitation
or solicitation of consents to vote any voting securities of the Company;
(c) form, join or in any way participate in a "group" (as defined
under the Exchange Act) in connection with any of the actions set forth in
clause (a);
(d) otherwise act, alone or in concert with others (including,
without limitation, any holder of securities or other interests in the
Company or any of its subsidiaries), to seek representation on the board
of directors of the Company or any of its subsidiaries or to seek to
control or influence the management, board of directors or policies of the
Company or any of its subsidiaries or to take any of the actions described
in clause (a);
(e) initiate, propose or otherwise solicit stockholders for the
approval of any stockholder proposal (as described in Rule 14a-8 under the
Exchange Act or otherwise) with respect to the Company; or
(f) encourage, assist or advise any third party or entity
(including, without limitation, any holder of securities or other
interests in the Company) with respect to any of the matters specified in
this Section 2, or enter into any arrangements to so do.
Each of the Icahn Parties and the ▇▇▇▇ Parties also agrees during the Restricted
Period not to request that the Company (or its directors, officers, employees or
agents), directly or indirectly, amend or waive any provision of this Section
(including this sentence), or permit any of its Affiliates to so request. For
purposes of this agreement: (1) "CONTINUING DIRECTORS" means, as of any date of
determination, any member of the board of directors of the Company who (A) was a
member of such board of directors on the date hereof or (B) was nominated for
election or elected to such board of directors with the approval of a majority
of the Continuing Directors who were members of such board of directors at the
time of such nomination or election; (2) "PERSON" shall be broadly interpreted
to include the media and any corporation, partnership, group, individual or
other entity; and (3) references to "THE
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COMPANY" include any successor to the Company and any subsidiaries of the
Company. Notwithstanding the foregoing, (x) in the event the Tender Acceptance
has not occurred on or before the Solicitation Date, the provisions of this
Section 2 shall be suspended with respect to the Icahn Parties and the ▇▇▇▇
Parties until such time as the Tender Acceptance shall occur, and the provisions
of this Section 2 shall terminate if the Tender Acceptance has not occurred on
or before June 23, 2005, (y) the limitation set forth in Section 2(c) shall not
apply with respect to any Icahn Party and its Affiliates constituting a "group"
with any other Icahn Party or Icahn Party Affiliate and (z) the limitations set
forth in Section 2(c) shall not apply with respect to any ▇▇▇▇ Party and its
Affiliates constituting a "group," with any other ▇▇▇▇ Party or ▇▇▇▇ Party
Affiliate.
3. (a) The Company agrees to commence the Tender Offer on or before
April 29, 2005.
(b) The Company agrees that, while all other business may be brought
before such Annual Meeting, it will cause its 2005 Annual Meeting of
Stockholders to be adjourned on May 10, 2005 before the nominations or elections
of directors to a date no earlier than June 7, 2005 and no later than June 9,
2005 for the purpose of nominating and electing directors. Provided that the
Tender Acceptance has not occurred and, in the event the Icahn Parties and the
▇▇▇▇ Parties notify the Company on or before June 5, 2005, of their desire to
further adjourn the meeting, the Company will cause the meeting to be further
adjourned until a date no earlier than June 21, 2005 and no later than June 23,
2005.
(c) The Icahn Parties and the ▇▇▇▇ Parties agree not to object to an
amendment to the Company's By-Laws expressly granting the Chairman the authority
to adjourn any meeting of stockholders. The Company agrees not to object to the
Icahn Parties' notice of nominations as invalid under the Company's By-Laws or
on the basis of claims asserted in the Action.
(d) Each of the Icahn Parties and the ▇▇▇▇ Parties agrees not to
comment or otherwise disclose publicly their plans and intentions as to whether
to tender shares into the Tender Offer (other than a disclosure that such party
intends to tender all shares then beneficially owned by such Party).
4. Immediately after this Agreement is executed, the Company will
inform the Court having jurisdiction over the Action of the fact of this
settlement, and thereafter will take all steps necessary to dismiss the Action,
with prejudice.
5. The Company agrees to issue a press release in the form attached
as Exhibit A. Each of the Icahn Parties and the ▇▇▇▇ Parties agree to issue a
press release in the form attached as Exhibit B promptly after the issuance of
the Company release. The press releases will be issued at or before 9:00 a.m.
(EDT) on Thursday, April 14, 2005. Prior to May 25, 2005, and at all times after
the Tender Acceptance, the Company and each of the Icahn Parties and the ▇▇▇▇
Parties further agree not to make any statements inconsistent with their
respective press releases.
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6. Each party to this Agreement acknowledges and agrees that money
damages would not be sufficient for any breach of this Agreement by such party
or any Affiliate of such party, and that the other party or parties to this
Agreement shall be entitled to equitable relief, including injunction and
specific performance as a remedy for such breach. Such remedies shall not be
deemed to be exclusive remedies for such a breach, but shall be in addition to
all other remedies available in law or equity.
7. (a) Effective upon the Tender Acceptance, each of the Icahn
Parties, on behalf of itself and each of its direct and indirect subsidiaries,
affiliates, predecessors, successors and assigns, and each of such party's
participants in the Proxy Contest (as defined below), and each of the past and
present principals, partners, officers and directors of any of them,
individually and collectively (each such Party an "ICAHN PERSON" and,
collectively, the "ICAHN PERSONS"), hereby releases, acquits, and forever
discharges the Company, and each of its direct and indirect subsidiaries,
parents, affiliates, predecessors, successors and assigns, and each of the
Company's participants in the Proxy Contest, and each of the past and present
principals, officers, directors, employees and attorneys of any of them, from
and with respect to any and all claims, counterclaims, actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, covenants,
contracts, agreements, promises, damages, judgments, obligations, controversies,
costs, expenses, attorneys' fees, liens, security interests, demands,
assertions, cross claims, disputes, indebtedness, executions of any nature, and
liabilities whatsoever possible, whether at law or in equity, statutory or
otherwise, whether known or unknown, asserted or unasserted, of every kind and
nature whatsoever, that any Icahn Person ever had, now has, or hereafter can,
shall, or may have against any Company Party (as defined below) for, upon, or by
reason of any matter, cause of action, or thing, whatsoever from the beginning
of the world to the date of the Tender Acceptance, asserted in or arising out of
or in connection with the Proxy Contest, the Nominations or the Action (each as
defined below), but expressly excluding (among other claims) any claim for
breach of or to enforce this Agreement.
(b) Effective upon the Tender Acceptance, each of the ▇▇▇▇ Parties,
on behalf of itself and each of its direct and indirect subsidiaries,
affiliates, predecessors, successors and assigns, and each of such party's
participants in the Proxy Contest (as defined below), and each of the past and
present principals, partners, officers and directors of any of them,
individually and collectively (each such Party a "▇▇▇▇ PERSON" and,
collectively, the "▇▇▇▇ PERSONS"), hereby releases, acquits, and forever
discharges the Company, and each of its direct and indirect subsidiaries,
parents, affiliates, predecessors, successors and assigns, and each of the
Company's nominees and participants in the Proxy Contest, and each of the past
and present principals, officers, directors, employees and attorneys of any of
them, from and with respect to any and all claims, counterclaims, actions,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
covenants, contracts, agreements, promises, damages, judgments, obligations,
controversies, costs, expenses, attorneys' fees, liens, security interests,
demands, assertions, cross claims, disputes, indebtedness, executions of any
nature, and liabilities whatsoever possible, whether at law or in equity,
statutory or otherwise, whether known or unknown, asserted or unasserted, of
every kind and nature whatsoever, that any ▇▇▇▇ Person ever had, now has, or
hereafter can, shall, or may have against any Company Party for, upon, or by
reason of any matter, cause of action, or thing, whatsoever from the beginning
of the world to the date of the Tender Acceptance, asserted in or arising
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out of or in connection with the Proxy Contest, the Nominations or the Action,
but expressly excluding (among other claims) any claim for breach of or to
enforce this Agreement.
(c) Effective upon the Tender Acceptance, the Company, on behalf of
itself and each of its direct and indirect subsidiaries, affiliates,
predecessors, successors and assigns, and each of the Company's nominees and
participants in the Proxy Contest, and each of the past and present principals,
officers and directors of any of them, individually and collectively (each such
Party a "COMPANY PARTY" and, collectively, the "COMPANY PARTIES"), hereby
releases, acquits, and forever discharges each Icahn Party and each ▇▇▇▇ Party
and each of its direct and indirect subsidiaries, parents, partners, affiliates,
predecessors, successors and assigns, and each of such party's nominees and
participants in the Proxy Contest, and each of the past and present principals,
officers, directors, partners, employees and attorneys of any of them, from and
with respect to any and all claims, counterclaims, actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, covenants, contracts,
agreements, promises, damages, judgments, obligations, controversies, costs,
expenses, attorneys' fees, liens, security interests, demands, assertions, cross
claims, disputes, indebtedness, executions of any nature, and liabilities
whatsoever possible, whether at law or in equity, statutory or otherwise,
whether known or unknown, asserted or unasserted, of every kind and nature
whatsoever, that any Company Party ever had, now has, or hereafter can, shall,
or may have against any Icahn Person or ▇▇▇▇ Person for, upon, or by reason of
any matter, cause of action, or thing, whatsoever from the beginning of the
world to the date of the Tender Acceptance, asserted in or arising out of or in
connection with the Proxy Contest, the Nominations or the Action (each as
defined below), but expressly excluding (among other claims) any claim for
breach of or to enforce this Agreement.
(d) "PROXY CONTEST" means the actions, omissions, solicitations,
filings, allegations, campaign, and events that were part of, arose from, or
were in connection with the solicitations of proxies by the Stockholders and the
participants named in the related proxy material and statements around the
Company's 2005 Annual Meeting of Stockholders.
(e) The "ACTION" means the action captioned in ▇▇▇▇-▇▇▇▇▇
CORPORATION VS. (1) ▇▇▇▇ ▇. ICAHN, (2) BARBERRY CORPORATION, (3) ▇▇▇▇▇▇
INVESTMENTS, LLC, (4) HIGH RIVER LIMITED PARTNERSHIP, (5) ICAHN PARTNERS MASTER
FUND LP, (6) ICAHN OFFSHORE LP, (7) CCI OFFSHORE LLC, (8) ICAHN PARTNERS LP, (9)
ICAHN ONSHORE LP, (10) CCI ONSHORE LLC, (11) ▇▇▇▇ PARTNERS LLC, (12) ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, AND (13) ▇▇▇▇ ▇▇▇▇▇, Civil Action No. CV-05-276-F, in the United
States District Court for the Western District of Oklahoma.
(f) "NOMINATIONS" means the Icahn Parties' nominations of ▇▇▇▇ ▇.
Icahn and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ to become members of the Board of Directors of the
Company, the Company's response to these nominations, and all related acts taken
by the Stockholders or the Company in relation thereto.
8. Any representation, warranty, promise, covenant, agreement or
obligation of the Icahn Parties, on the one hand, and the ▇▇▇▇ Parties, on the
other hand, are several and not joint.
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9. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same agreement.
10. This Agreement is governed by the laws of the State of New York
without giving effect to its conflicts of laws principles or rules.
The parties have duly executed this agreement.
▇▇▇▇-▇▇▇▇▇ CORPORATION
By:
--------------------------------
Name:
Title:
ICAHN PARTIES:
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------------------------------------
▇▇▇▇ ▇. ICAHN
BARBERRY CORPORATION
By:_________________________________
Name:
Title:
▇▇▇▇▇▇ INVESTMENTS, LLC
By:_________________________________
Name:
Title:
HIGH RIVER LIMITED PARTNERSHIP
By:_________________________________
Name:
Title:
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ICAHN PARTNERS MASTER FUND LP
By:_________________________________
Name:
Title:
ICAHN OFFSHORE LP
By:_________________________________
Name:
Title:
CCI OFFSHORE LLC
By:_________________________________
Name:
Title:
ICAHN PARTNERS LP
By:_________________________________
Name:
Title:
ICAHN ONSHORE LP
By:_________________________________
Name:
Title:
CCI ONSHORE LLC
By:_________________________________
Name:
Title:
▇▇▇▇ PARTIES:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇ PARTNERS LLC
By:_________________________________
Name:
Title:
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Exhibit A
▇▇▇▇-▇▇▇▇▇ REACHES SETTLEMENT WITH
ICAHN GROUP AND ▇▇▇▇ PARTNERS
Company Withdraws Litigation and Announces that Icahn and ▇▇▇▇
Will Withdraw Board Nominees Pending Completion of
Announced Share Repurchase Program
Oklahoma City, April 14, 2005 - ▇▇▇▇-▇▇▇▇▇ Corp. (NYSE: KMG) announced
today that it has entered into a settlement with Mr. ▇▇▇▇ ▇▇▇▇▇, certain
affiliated funds and ▇▇▇▇ Partners LLC. As a result, the company will dismiss
its complaint with prejudice filed March 10, 2005, in the United States District
Court for the Western District of Oklahoma.
▇▇▇▇-▇▇▇▇▇ also announced that based on the company's recent actions to
enhance stockholder value, including the previously announced separation of its
chemical business and recently announced $4 billion share repurchase program in
the form of a modified "Dutch Auction" tender offer, it has received written
notice from the Icahn Group and ▇▇▇▇ Partners confirming that they will
immediately cease proxy solicitation activities. The Icahn Group and ▇▇▇▇
Partners will withdraw their alternate board nominees from consideration for
election to the board of directors of ▇▇▇▇-▇▇▇▇▇ on successful completion of
▇▇▇▇-▇▇▇▇▇'▇ repurchase program. ▇▇▇▇-▇▇▇▇▇ has every expectation that it will
complete the repurchase program by mid-May, 2005.
"This settlement enables the company to deliver on its commitment to
deliver stockholder value and to advance its strategy as a pure-play exploration
and production company," said ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇ chairman and chief
executive officer. "Our conversations with Mr. Icahn and ▇▇▇▇ have been
productive."
▇▇▇▇-▇▇▇▇▇ is an Oklahoma City-based energy and inorganic chemical company
with worldwide operations and assets of more than $14 billion. For more
information visit the company's website at ▇▇▇.▇▇▇▇-▇▇▇▇▇.▇▇▇.
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Exhibit B
ICAHN GROUP & ▇▇▇▇ PARTNERS COMMEND ▇▇▇▇-▇▇▇▇▇ FOR AGREEING TO TAKE STEPS
TO ENHANCE SHAREHOLDER VALUE
New York, April 14, 2005 - ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ today announced that
they commend ▇▇▇▇-▇▇▇▇▇'▇ management and its Board of Directors for engaging in
productive discussions with us and other shareholders, and agreeing to take
steps to enhance shareholder value. They stated that "we believe that the steps
that ▇▇▇▇-▇▇▇▇▇ has undertaken will prove beneficial to all its shareholders."
Messrs. Icahn and ▇▇▇▇▇▇▇▇▇▇ indicated that they were suspending their proxy
contest for seats on the Board of Directors of the ▇▇▇▇-▇▇▇▇▇ pending the
commencement and successful completion of the tender offer for shares of its
common stock which ▇▇▇▇-▇▇▇▇▇ plans to commence shortly. When the tender offer
is successfully completed, the proxy contest will be terminated said Messrs.
Icahn and ▇▇▇▇▇▇▇▇▇▇.
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