Explanatory Note Regarding the Merger Agreement
This section of this proxy statement/prospectus describes the material provisions of the merger agreement, but does not describe all of the terms of the merger agreement and may not contain all of the information about the merger agreement that is important to you. The following summary is qualified by reference to the complete text of the merger agreement, which is attached as Annex A to this proxy statement/prospectus and incorporated by reference herein. The rights and obligations of Occidental, Anadarko and Merger Subsidiary are governed by the express terms and conditions of the merger agreement and not by this summary or any of the other information contained in this proxy statement/prospectus. You are urged to read the full text of the merger agreement because it is the legal document that governs the merger.
The merger agreement contains representations, warranties and covenants by each of the parties to the agreement, which were made only for purposes of the agreement, as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Occidental, Merger Subsidiary, Anadarko or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants contained in the merger agreement or any other agreement between such parties may change after the date of each such agreement, which subsequent information may or may not be fully reflected in Occidental’s or Anadarko’s public disclosures or the public disclosures of any of their respective subsidiaries or affiliates. Each such agreement should not be read alone, but should instead be read in conjunction with the other information regarding the respective agreement, the merger, Occidental, Anadarko and their respective affiliates and businesses, which is contained in, or incorporated by reference into, this proxy statement/prospectus, as well as in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that each of Occidental and Anadarko has made or will make with the SEC. See “Where You Can Find More Information” beginning on page .
The merger agreement provides, upon the terms and subject to the conditions set forth therein and in accordance with the DGCL, for Merger Subsidiary to merge with and into Anadarko, with Anadarko continuing as the surviving corporation and an indirect wholly owned subsidiary of Occidental.
At the effective time of the merger, the certificate of incorporation of Anadarko, as in effect immediately prior to the completion of the merger, will be amended and restated in its entirety as set forth in Exhibit A to the merger agreement and, as so amended and restated, will be the certificate of incorporation of the surviving corporation, except with respect to the name of the surviving corporation, which will be Anadarko Petroleum Corporation. The by-laws of Merger Subsidiary, as in effect immediately prior to the completion of the merger, will be the by-laws of the surviving corporation. As used herein, the “effective time” of the merger means the time at which the certificate of merger with respect to the merger is duly filed with the Secretary of State of the State of Delaware or at such later time as Occidental and Anadarko may agree and specify in such certificate of merger.
Unless another place and time is agreed to in writing by Occidental and Anadarko, the closing of the merger will occur on the second business day following the day on which the last of the conditions (other than those conditions that by their nature are to be fulfilled at the closing, but subject to the waiver or fulfillment of such conditions) set forth in the merger agreement has been fulfilled or waived. Immediately after the closing of the merger, Anadarko will file a certificate of merger with respect to the merger with the Secretary of State of the State of Delaware, at which time the merger will be effective.
Conversion of Shares
At the effective time of the merger, each outstanding share of Anadarko common stock (other than the cancelled shares, dissenting shares (if any) and certain shares of Anadarko common stock subject to stock awards that will be treated in the manner described under the heading “Treatment of Anadarko Stock Options and Other Stock-Based Awards”) will automatically be cancelled and retired and will cease to exist and each holder thereof will thereafter have no rights with respect to such securities other than the right to receive:
| • | $59.00 in cash (as such amount of cash may potentially be adjusted as described under the heading “—Share Cap Adjustment”, the “per share cash consideration”), without interest, and 0.2934 (as such amount may potentially be adjusted as described under the heading “—Share Cap Adjustment”, the “exchange ratio”) of a validly issued, fully paid and non-assessable share of Occidental common stock (such cash consideration and stock consideration together, as they may potentially be adjusted as described under the heading “—Share Cap Adjustment”, the “merger consideration”); |
| • | any dividends or other distributions with a record date prior to the effective time of the merger which are declared by Anadarko in accordance with the merger agreement and which remain unpaid at the effective time of the merger; |
| • | (i) at the time of delivery of the Occidental common stock by the exchange agent, the amount of dividends or other distributions, if any, with a record date after the effective time of the merger paid with respect to such shares of Occidental common stock and a payment date on or before the date of delivery of the Occidental common stock and not previously paid and (ii) at the appropriate payment date, the amount of dividends or other distributions, if any, with a record date after the effective time of the merger but before the delivery of Occidental common stock by the exchange agent and a payment date subsequent to such delivery of such Occidental common stock by the exchange agent pursuant to the merger agreement, payable with respect to such shares of Occidental common stock, in each case without interest; and |
| • | any cash to be paid in lieu of any fractional share of Occidental common stock as described under the heading “—Treatment of Fractional Shares”. |
Shares of Anadarko common stock owned by Anadarko, Occidental, Merger Subsidiary or any of their respective direct or indirect wholly owned subsidiaries will be cancelled in the merger without payment of any consideration, as described under the heading “—Cancelled Shares”.
Following the effective time of the merger, Occidental will make available to the exchange agent, as needed, the merger consideration to be delivered in respect of certificates and book-entry shares formerly representing shares of Anadarko common stock.
If the merger would otherwise result in the issuance of shares of Occidental common stock (including shares that would be deliverable pursuant to converted stock-based awards pursuant to the merger agreement) in excess of 19.99% of the outstanding shares of Occidental common stock immediately prior to the closing of the merger (the “share cap”) then:
| • | the exchange ratio will be reduced by the smallest number (rounded up to the nearest 0.0001) that causes the total number of shares of Occidental common stock (including shares that would be deliverable pursuant to converted stock-based awards pursuant to the merger agreement) issuable in the merger to not exceed the share cap (the “exchange ratio reduction number”); and |
| • | the per share cash consideration will be increased by the amount in cash equal to (x) the exchange ratio reduction number multiplied by (y) the Parent Closing Price. |
Cancelled Shares
At the effective time of the merger, all shares of Anadarko common stock that are owned by Occidental, Merger Subsidiary or Anadarko or any of their respective direct or indirect wholly owned subsidiaries will be cancelled and retired and will cease to exist and no stock of Occidental, cash or other consideration will be
delivered in exchange therefor. For the avoidance of doubt, shares of Anadarko common stock held in trust or otherwise set aside from shares held in Anadarko’s treasury pursuant to any Anadarko benefit plan will not be cancelled shares and will be converted, at the effective time of the merger, into the right to receive the merger consideration.
Treatment of Fractional Shares
Anadarko stockholders will not receive any fractional shares of Occidental common stock pursuant to the merger. Each holder of Anadarko common stock that otherwise would have been entitled to receive a fractional share of Occidental common stock immediately prior to the effective time of the merger will receive an amount in cash, without interest, rounded to the nearest cent, in lieu of such fractional share. The value of such cash payment will be calculated by the exchange agent and will represent the holder’s proportionate interest in a trust of proceeds established from the open-market sale of that number of shares of Occidental common stock equal to the excess of (i) the aggregate number of shares of Occidental common stock delivered to the exchange agent by Occidental pursuant to the terms of the merger agreement over (ii) the aggregate number of whole shares of Occidental common stock distributed to the holders of certificates or book-entry shares previously representing shares of Anadarko common stock pursuant to the merger agreement.
Exchange of Anadarko Stock Certificates and Book-Entry Shares
Promptly after the effective time of the merger, Occidental will send, or will cause the exchange agent to send, to each holder of record of Anadarko common stock converted into the right to receive the merger consideration, a letter of transmittal for use in the exchange and instructions explaining how to surrender Anadarko shares to the exchange agent. Anadarko stockholders should not return stock certificates with the enclosed proxy card. Exchange of any book-entry shares of Anadarko common stock will be effected in accordance with Occidental’s customary procedures with respect to securities represented by book entry. Holders of unexchanged shares of Anadarko common stock will not be entitled to receive the merger consideration or any dividends or other distributions payable by Occidental after the closing until their shares are properly surrendered. No interest will be paid or will accrue for the benefit of holders of the certificates or book-entry shares that formerly represented outstanding shares of Anadarko common stock on the cash or other merger consideration payable pursuant to the merger agreement, any cash in lieu of fractional shares or any unpaid dividends and distributions payable pursuant to the merger agreement to such holders of certificates or book-entry shares that formerly represented outstanding shares of Anadarko common stock.
Withholding
Each of Anadarko, the surviving corporation, Occidental and the exchange agent will be entitled to deduct and withhold from any amounts otherwise payable pursuant to the merger agreement to any person such amounts as are required to be deducted and withheld with respect to the making of such payment under any provision of federal, state, local or foreign tax law. To the extent that amounts are so deducted or withheld by Anadarko, the surviving corporation, Occidental or the exchange agent, any amounts so withheld will be treated for all purposes of the merger agreement as having been paid to the person in respect of which such deduction and withholding was made.
Appraisal Rights
No dissenting Anadarko stockholders will be entitled to the right to receive the merger consideration unless and until the stockholder has failed to perfect or has effectively withdrawn or lost the holder’s right to seek appraisal in connection with the merger under the DGCL. Dissenting Anadarko stockholders who properly comply with the provisions of Section 262 of the DGCL as to appraisal rights and do not withdraw or otherwise lose these rights will be entitled to receive payment, solely from the surviving corporation, of the appraisal value of the dissenting shares to the extent permitted by and in accordance with the provisions of Section 262 of the DGCL. If an Anadarko stockholder (i) affirmatively withdraws its demand for appraisal of such dissenting shares under the circumstances provided by and in accordance with the DGCL, (ii) fails to establish its entitlement to appraisal as provided in the DGCL or (iii) takes or fails to take any action the consequences of which is that such holder is not entitled to payment for its shares under the DGCL, then such holder will forfeit the right to appraisal of such shares of Anadarko common stock and such shares of Anadarko common stock will thereupon cease to constitute dissenting shares, and if such forfeiture occurs following the effective time of the merger,
each such share of Anadarko common stock will thereafter be deemed to have been converted into and to have become, as of the effective time of the merger, the right to receive, without interest thereon, the merger consideration. Anadarko may not, except with the prior written consent of Occidental, settle, make any payments with respect to, offer to settle, approve the withdrawal of any claim or agree to any of the foregoing with respect to the dissenting shares. As used herein, dissenting shares means shares of Anadarko common stock with respect to which appraisal rights are properly demanded and not withdrawn under the DGCL.
Lost Certificates
If a certificate representing shares of Anadarko common stock has been lost, stolen or destroyed, then, before an Anadarko stockholder will be entitled to receive the merger consideration to be paid in respect of the shares of Anadarko common stock represented by such lost, stolen or destroyed certificate, the holder will need to deliver an affidavit of that fact and, if required by Occidental or the surviving corporation, post a bond, in such reasonable amount as the surviving corporation may direct, as indemnity against any claim that may be made against it with respect to such certificate.
Potential Adjustment to Merger Consideration to Prevent Dilution
In the event that, before the completion of the merger, any change in the outstanding shares of capital stock of Occidental or Anadarko occurs as a result of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, or any stock dividend thereon with a record date during such period, the relevant components of the merger consideration will be appropriately adjusted in order to provide Anadarko stockholders with the economic effect contemplated by the parties in the merger agreement. No such adjustment will be made for cash dividends or grants of equity compensation not prohibited by the merger agreement.
Treatment of Anadarko Stock Options and Other Stock-Based Awards
Anadarko Stock Options. Upon completion of the merger, each outstanding Anadarko stock option will be cancelled and converted into the right to receive a cash amount equal to the product of (i) the excess, if any, of (1) the Option Consideration over (2) the per share exercise price of such Anadarko stock option; and (ii) the aggregate number of shares of Anadarko common stock subject to such Anadarko stock option. Each Anadarko stock option with an exercise price equal to or greater than the Option Consideration will be cancelled and terminated, without any payment in respect thereof.
Anadarko RSU Awards. Upon completion of the merger, each outstanding Anadarko RSU award will convert into an Occidental restricted stock/cash unit award with respect to both (i) the number (rounded to the nearest whole number) of shares of Occidental common stock determined by multiplying (x) the number of shares of Anadarko common stock subject to such Anadarko RSU award by (y) the exchange ratio and (ii) the U.S. dollar amount (rounded to the nearest whole cent) determined by multiplying (1) the number of shares of Anadarko common stock subject to such Anadarko RSU award by (2) the per share cash consideration. Such converted award will otherwise continue on the same terms and conditions as were applicable under such Anadarko RSU award, including any provisions for acceleration of vesting. Such terms and conditions include “double-trigger” protection of the converted award, meaning that upon certain qualifying terminations of employment during the applicable protection period following the closing of the merger, the award will immediately vest and become unrestricted as of such termination.
Anadarko RS Awards. Upon completion of the merger, each outstanding Anadarko RS award will convert into an Occidental restricted stock/cash award with respect to both (i) the number (rounded to the nearest whole number) of shares of Occidental common stock determined by multiplying (x) the number of shares of Anadarko common stock subject to such Anadarko RS award by (y) the exchange ratio and (ii) the U.S. dollar amount (rounded to the nearest whole cent) determined by multiplying (1) the number of shares of Anadarko common stock subject to such Anadarko RS award by (2) the per share cash consideration. Such converted award will otherwise continue on the same terms and conditions as were applicable under such Anadarko RS award, including any provisions for acceleration of vesting. Such terms and conditions include “double-trigger” protection of the converted award, meaning that upon certain qualifying terminations of employment during the applicable protection period following the closing of the merger, the award will immediately vest and become unrestricted as of such termination.
Anadarko PU Awards. Upon completion of the merger, each outstanding Anadarko PU award will immediately vest and will be cancelled and converted into the right to receive a cash amount equal to the
product of (x) 200% of the target number of shares of Anadarko common stock subject to such Anadarko PU award multiplied by (y) $76.00, less applicable tax withholdings. This amount will be payable on the earliest date that would not result in the imposition of any tax under Section 409A of the Code.
Anadarko Deferred Share Awards. Upon completion of the merger, each outstanding Anadarko deferred share award will be cancelled and converted into the right to receive the merger consideration in respect of each share of Anadarko common stock subject to such Anadarko deferred share award. This amount will be payable within five business days following the completion of the merger or, if later, the earliest date that would not result in the imposition of tax under Section 409A of the Code.
For additional information on Anadarko’s stock-based awards, see “The Merger—Interests of Directors and Executive Officers of Anadarko in the Merger” beginning on page .
Conduct of Business
Each of Occidental and Anadarko has agreed to certain covenants in the merger agreement restricting the conduct of its business between May 9, 2019 and the earlier of the completion of the merger and the termination of the merger agreement.
Interim Operations of Anadarko. The merger agreement provides that until the effective time of the merger, except with the prior written consent of Occidental (such consent not to be unreasonably withheld, conditioned or delayed), Anadarko and its subsidiaries will conduct their business in the ordinary course consistent with past practice and in a manner not involving entry into businesses that are materially different from the business of Anadarko and its subsidiaries on the date of the merger agreement. Anadarko has also agreed that during this period it and its subsidiaries will use their commercially reasonable efforts to preserve intact their business organizations and relationships with third parties. In addition, Anadarko has agreed to the following specific restrictions on the conduct of its business during this period, which are subject to exceptions described in the merger agreement. Anadarko generally has agreed that, except with the prior written consent of Occidental (such consent not to be unreasonably withheld, conditioned or delayed), it will not, and will not permit any of its subsidiaries to:
| • | adopt or propose any change in its certificate of incorporation or by-laws; |
| • | adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; |
| • | issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of Anadarko or its subsidiaries, with certain exceptions; |
| • | effect a stock split or combine, subdivide, reclassify or otherwise adjust its outstanding shares of capital stock (including any shares of capital stock underlying options or other stock or stock-based awards), or declare any dividends, other than regular quarterly cash dividends consistent with past practice (which may not exceed $0.30 per share with respect to Anadarko dividends but, with respect to Western Midstream Partners, LP dividends, may include increases to the extent consistent with financial guidance published prior to the date of the merger agreement) and intra-group dividends among Anadarko and its subsidiaries; |
| • | redeem, purchase or otherwise acquire, directly or indirectly, any of its or its subsidiaries’ capital stock, with certain exceptions for repurchases, redemptions or acquisitions (i) required by the terms of its capital stock or any securities outstanding as of the date of the merger agreement, (ii) required by or in connection with the respective terms, as of the date of the merger agreement, of any company benefit plan or any dividend reinvestment plan in the ordinary course of the operations of such plan and consistent with past practice or (iii) in satisfaction of applicable tax withholdings and/or the exercise price of any Anadarko stock-based awards; |
| • | amend the terms of any outstanding options to purchase shares of Anadarko common stock or of any outstanding restricted stock, stock units or stock appreciation rights (provided that such covenant will not limit the administration of the relevant plans in accordance with past practices and interpretations of the Anadarko Board and the Compensation and Benefits Committee of the Anadarko Board); |
| • | make or authorize any capital expenditures except in amounts that are not in excess of (i) the aggregate budgeted amount indicated in the capital budget provided to Occidental and (ii) with respect to any line item in such capital budget, in an amount not to exceed the amount budgeted to such line item by more than the percentage specified therein; provided, however, that if the effective time of the merger does not occur in 2019, with respect to capital expenditures in future periods that are not covered by such capital budget, such maximum amounts will be based on a reasonable extrapolation of permissible expenditures from the capital budget; and provided, further, that Western Midstream Partners, LP will not make or authorize capital expenditures outside the ordinary course of business consistent with past practice; |
| • | increase the compensation or benefits of any director, officer or employee (except for normal increases in the ordinary course of business consistent with past practice or as required under applicable law or any company benefit plan existing on the date of the merger agreement) or enter into, adopt, extend or renew (with respect to extension or renewal only, for a term in excess of one year) (or waive or amend any performance or vesting criteria or accelerate funding under) any employment, change in control, severance, bonus, profit sharing, retirement, restricted stock, stock option, deferred compensation or other director, executive or employee benefit plan, policy, agreement or arrangement (except as required by applicable law or the terms of an agreement or arrangement existing on the date of the merger agreement or, with respect to individual non-U.S. payroll employees, in the ordinary course of business consistent with past practice or as required by applicable law); |
| • | acquire (i) any business or person or division thereof (whether by merger or consolidation, by purchase of all or a substantial portion of the assets or equity or voting interest in such persons, businesses or divisions or by any other manner) or (ii) any other assets (except certain E&P assets or any non-E&P assets acquired in the ordinary course of business consistent with past practice); |
| • | make any acquisition of any assets, property or securities of any person if such acquisition would, individually or in the aggregate, reasonably be expected to prevent, materially impede, materially interfere with or materially delay the completion of the merger; |
| • | sell, lease, license, encumber or otherwise dispose of any material assets or property, except pursuant to existing contracts or commitments or in the ordinary course of business consistent with past practice and in no event in an amount exceeding $100 million in the aggregate (provided that in no event will Anadarko, directly or indirectly, sell, lease, license, encumber or otherwise dispose of any equity interest in Western Midstream Partners, LP); |
| • | incur any indebtedness for borrowed money, guarantee or assume any such indebtedness of another person, issue or sell warrants or other rights to acquire any debt securities of Anadarko or any of its subsidiaries, enter into any “keep well” or other agreement to maintain any financial condition of another person, or enter into any arrangement having the economic effect of any of the foregoing (other than (i) any such indebtedness among any person and its wholly owned subsidiaries, among any person’s wholly owned subsidiaries, and guarantees thereof, (ii) additional borrowings under Anadarko’s existing credit facility or existing credit facilities of its subsidiaries, in each case in accordance with the terms thereof or (iii) any such indebtedness incurred to replace, renew, extend, refinance or refund any indebtedness of Anadarko or any of its subsidiaries, in the case of clauses (ii) and (iii), subject to certain limitations); |
| • | modify, amend, terminate or waive any material rights under any material contract or enter into any agreement that would constitute a material contract, other than as expressly contemplated in the merger agreement or in the ordinary course of business consistent with past practice with respect to certain contracts (provided that Anadarko will not enter into any contracts or extensions of existing contracts relating to Anadarko’s U.S. offshore business with terms extending beyond December 31, 2019); |
| • | settle or compromise any claim, demand, lawsuit or state or federal regulatory proceeding, or waive, release or assign any rights or claims, in any such case (i) in an amount in excess of $25 million, (ii) that is otherwise qualitatively material to Anadarko or (iii) that imposes any material obligation to be performed by, or material restriction imposed against, Anadarko or its subsidiaries after the closing date of the merger (provided that Anadarko may not settle or propose to settle or compromise any transaction litigation except as permitted by the terms of the merger agreement); |
| • | change any method of financial accounting or financial accounting practice (except for changes that are not material or are required by concurrent changes in GAAP or applicable law); |
| • | enter into any joint venture, partnership, participation or other similar arrangement with respect to its U.S.-onshore business and operations other than in the ordinary course of business consistent with past practice and in an aggregate amount of assets contributed by Anadarko or any of its subsidiaries not exceeding $100 million; |
| • | enter into any joint venture, partnership, participation or other similar arrangement with respect to its U.S.-offshore business and operations; |
| • | make any loan, capital contribution or advance to or investment in any other person (other than Anadarko or any wholly owned subsidiary of Anadarko in the ordinary course of business consistent with past practice and other than pursuant to capital calls required pursuant to the terms of existing equity investments) except for advances for reimbursable employee expenses in the ordinary course of business consistent with past practice; |
| • | take any action that would limit Occidental’s or Anadarko’s freedom to license, cross-license or otherwise dispose of any of Anadarko’s intellectual property; |
| • | except as required by law, make, revoke or amend any material election relating to taxes or change any of its tax accounting or procedures currently in effect, settle any tax proceeding or file any amended tax return, in each case, that is reasonably likely to result in an increase to a tax liability, if that increase is material to Anadarko and its subsidiaries taken as a whole; |
| • | enter into any agreement that limits in any material respect the ability of Anadarko or its subsidiaries or would limit in any material respect the ability of Occidental or its subsidiaries after the merger to compete in any line of business or geographic area; |
| • | take any action that would reasonably be expected to prevent, materially impede, interfere with or delay the completion of the merger and the transactions contemplated by the merger agreement; |
| • | (i) except in the case of Western Midstream Partners, LP and its subsidiaries, enter into any new interest rate hedges other than extensions or replacements of existing hedges in the ordinary course of business entered into no earlier than September 1, 2019 or any new commodity hedges and (ii) in the case of Western Midstream Partners, LP and its subsidiaries, enter into any new interest rate hedges or commodity hedges other than in the ordinary course of business consistent with past practice; |
| • | incur any third-party capital in respect of any non-consented AFEs without the prior written consent of Occidental (such consent not to be unreasonably withheld, conditioned or delayed); |
| • | take other specified actions agreed to by the parties; or |
| • | agree or commit to do any of the foregoing. |
Interim Operations of Occidental. The merger agreement provides that until the effective time of the merger, except with the prior written consent of Anadarko (such consent not to be unreasonably withheld, conditioned or delayed), Occidental and its subsidiaries will conduct their business in a manner not involving the entry by Occidental or its subsidiaries into lines of business that are materially different from the lines of business of Occidental and its subsidiaries as of the date of the merger agreement. Occidental generally has agreed that, except with the prior written consent of Anadarko (such consent not to be unreasonably withheld, conditioned or delayed), it will not, and will not permit any of its subsidiaries to:
| • | adopt or propose any change in the certificate of incorporation or by-laws of Occidental (other than any certificate of designations adopted in connection with the Berkshire Hathaway investment); |
| • | adopt a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Occidental; |
| • | except as contemplated by the Berkshire Hathaway investment, effect a stock split or combine, subdivide or reclassify Occidental’s outstanding shares of capital stock, or declare any dividends on Occidental’s capital stock, other than regular quarterly cash dividends consistent with past practice |
(including increases in such dividends consistent with past practice), and in any case not including any special dividend (provided, however, that Occidental will not declare, set aside or pay any dividend except in accordance with the terms of the merger agreement, described under the heading “—Coordination of Dividends”);
| • | acquire any assets, property or securities if, individually or in the aggregate, such acquisition or acquisitions would reasonably be expected to prevent, materially impede, materially interfere with or materially delay the completion of the merger and the transactions contemplated by the merger agreement; or |
| • | agree or commit to do any of the foregoing. |
Anadarko Stockholder Meeting. The merger agreement requires Anadarko, as promptly as practicable after Occidental’s registration statement on Form S-4, of which this proxy statement/prospectus forms a part, is declared effective, to duly call, give notice of, convene and hold a meeting of its stockholders (the “Anadarko stockholder meeting”) for the purpose of obtaining the required approval of the merger proposal by the Anadarko stockholders (the “Anadarko stockholder approval”). Matters contemplated by the Anadarko stockholder approval are the only matters (other than matters of procedure and matters required by law to be voted on by Anadarko’s stockholders in connection therewith or, with Occidental’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), matters contemplated to otherwise have been submitted to the Anadarko stockholders at Anadarko’s 2019 annual stockholder meeting) that Anadarko may propose to be voted on by the Anadarko stockholders at the Anadarko stockholders meeting.
Anadarko may not adjourn, postpone or otherwise delay the Anadarko stockholder meeting without the prior written consent of Occidental unless (i) after consultation with Occidental, Anadarko believes in good faith that such adjournment or postponement is reasonably necessary to allow reasonable additional time to (x) solicit additional proxies necessary to obtain the Anadarko stockholder approval, or (y) distribute any supplement or amendment to the Anadarko proxy statement the distribution of which the Anadarko Board has determined in good faith to be necessary under applicable law after consultation with, and taking into account the advice of, outside legal counsel or (ii) for an absence of a quorum. Notwithstanding the foregoing, Anadarko may not, without the prior written consent of Occidental (such consent not to be unreasonably withheld, conditioned or delayed), postpone the Anadarko stockholder meeting more than a total of three times pursuant to clause (i)(x) or (ii) of the immediately preceding sentence, and no such postponement or adjournment pursuant to clause (i)(x) or (ii) of the immediately preceding sentence will be, without the prior written consent of Occidental (such consent not to be unreasonably withheld, conditioned or delayed), for a period exceeding ten business days and in no event may Anadarko postpone the Anadarko stockholder meeting without the written consent of Occidental if doing so would require the setting of a new record date. Anadarko will otherwise coordinate and cooperate with Occidental with respect to the timing of the Anadarko stockholder meeting and will otherwise comply with all legal requirements applicable to the Anadarko stockholder meeting.
No Solicitation. Anadarko has agreed that it and its subsidiaries will not, and that it will direct and use its reasonable best efforts to cause its and its subsidiaries’ respective officers, directors, employees, investment bankers, consultants, attorneys, accountants, agents and other representatives not to, directly or indirectly:
| • | take any action to solicit, initiate or knowingly encourage or facilitate the making of any acquisition proposal (as defined below) or any inquiry with respect to an acquisition proposal; |
| • | engage in discussions or negotiations with any person with respect to an acquisition proposal (except to notify them of the existence of the applicable provisions of the merger agreement); |
| • | disclose any nonpublic information or afford access to properties, books or records to any person that has made, or to Anadarko’s knowledge is considering making, an acquisition proposal; |
| • | approve or recommend, propose to approve or recommend, or execute or enter into any agreement relating to an acquisition proposal; or |
| • | propose publicly or agree to do any of the foregoing. |
An “acquisition proposal” is any bona fide written offer or proposal for, or bona fide written indication of interest in, any:
| • | direct or indirect acquisition or purchase of any business or assets of Anadarko or any of its subsidiaries that constitutes, either individually or in the aggregate, 20% or more of the net revenues, net income, EBITDA or assets of Anadarko and its subsidiaries, taken as a whole; |
| • | direct or indirect acquisition or purchase of 20% or more of any class of equity securities of Anadarko or of any of its subsidiaries whose business constitutes 20% or more of the net revenue, net income, EBITDA or assets of Anadarko and its subsidiaries, taken as a whole; |
| • | tender offer or exchange offer that, if completed, would result in any person owning 20% or more of any class of equity securities of Anadarko, or any of its subsidiaries whose business constitutes 20% or more of the net revenues, net income, EBITDA or assets of Anadarko and its subsidiaries, taken as a whole; or |
| • | merger, consolidation, business combination, joint venture, partnership, recapitalization, liquidation, dissolution or similar transaction involving Anadarko or any of its subsidiaries whose business constitutes 20% or more of the net revenues, net income, EBITDA or assets of Anadarko and its subsidiaries, taken as a whole, other than the transactions contemplated by the merger agreement. |
The Anadarko Board may, however, make any disclosure if, in the good faith judgment of the Anadarko Board, after consultation with outside counsel, the failure to make such disclosure would be reasonably likely to be inconsistent with the Anadarko directors’ exercise of their fiduciary duties to Anadarko’s stockholders under applicable law. If the disclosure relates to an acquisition proposal, it will be deemed to constitute a change in the Anadarko Board’s recommendation in favor of the adoption of the merger agreement unless the Anadarko Board reaffirms its recommendation in that disclosure. In addition but subject to the terms and conditions contained in the merger agreement, prior to the adoption of the merger agreement by the Anadarko stockholders, Anadarko may:
| • | furnish information and access, but only in response to a request, to a person making a bona fide, written acquisition proposal to the Anadarko Board that was not obtained in breach of the non-solicitation provisions or certain other deal-protection provisions of the merger agreement; and |
| • | participate in discussions and negotiate with the person or its representatives making the acquisition proposal. |
Anadarko may only furnish information and participate in discussions as described above, however, if Anadarko first delivers to Occidental written notice advising Occidental that Anadarko intends to take such action, and:
| • | the Anadarko Board concludes in good faith, after (i) receipt of the advice of a financial advisor of nationally recognized reputation and outside legal counsel, that such acquisition proposal constitutes or could reasonably be expected to result in a superior proposal (as defined below) and (ii) taking into account any revised terms proposed by Occidental after Occidental is notified of such acquisition proposal pursuant to the terms of the merger agreement, that failure to do so would be reasonably likely to be inconsistent with its fiduciary duties to Anadarko’s stockholders under applicable law; |
| • | prior to any engagement or disclosure otherwise permitted by the merger agreement, Anadarko receives from the person making the acquisition proposal an executed confidentiality agreement whose material confidentiality terms are, in all material respects, no less favorable to Anadarko and no less restrictive to the person making the acquisition proposal than those contained in the existing confidentiality agreement between Anadarko and Occidental, and any information provided to such person is provided to Occidental prior to or substantially concurrently with the time it is provided to such person. |
In the event that on or after the date of the merger agreement Anadarko receives an acquisition proposal or any request for nonpublic information relating to Anadarko or any of its subsidiaries or for access to the properties, books or records of Anadarko or any of its subsidiaries by any person that has made, or to Anadarko’s knowledge may be considering making an acquisition proposal, Anadarko will (i) promptly (and in no event later than 24 hours after receipt thereof) notify (which notice will be provided orally and in writing and will identify the person making such acquisition proposal or request and set forth the material terms thereof) Occidental
thereof, (ii) keep Occidental reasonably and promptly informed of the status and material terms of (including changes to the status or material terms of) any such acquisition proposal or request and (iii) as promptly as practicable (but in no event later than 24 hours after receipt) provide Occidental unredacted copies of all material correspondence and written materials sent or provided to Anadarko or any of its subsidiaries that describes any terms or conditions thereof (including any proposed transaction agreements and schedules and exhibits thereto and any financing commitments related thereto as well as written summaries of any material oral communications relating to the terms and conditions thereof).
A “superior proposal” is a bona fide written acquisition proposal for or in respect of at least a majority of the outstanding shares of Anadarko common stock or Anadarko’s and its subsidiaries’ assets:
| • | on terms that the Anadarko Board determines, in its good faith judgment (after consultation with, and taking into account the advice of, a financial advisor of nationally recognized reputation and outside legal counsel), taking into account all the terms and conditions of such acquisition proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation, as well as any revisions to the terms of the merger or the merger agreement proposed by Occidental, are more favorable to Anadarko’s stockholders than the merger and other transactions contemplated by the merger agreement; and |
| • | constitutes a transaction that is reasonably likely to be consummated on the terms proposed, taking into account all legal, financial, regulatory and other aspects of that proposal. |
Anadarko Board’s Recommendation to Stockholders. Anadarko has agreed that the Anadarko Board will recommend the adoption of the merger agreement to Anadarko’s stockholders and to include such recommendation in this proxy statement/prospectus. The merger agreement provides that, subject to the exceptions described below, neither the Anadarko Board nor any committee thereof will (i) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in any manner adverse to Occidental, the approval of the merger agreement, the merger or the recommendation of the Anadarko Board (any action referred to in this clause (i), a “change in the Anadarko recommendation”) or (ii) approve or recommend, or propose publicly to approve or recommend, any acquisition proposal. For purposes of the merger agreement, a change in the Anadarko recommendation includes (x) any approval or recommendation of (or public proposal to approve or recommend) an acquisition proposal by the Anadarko Board or any committee thereof and (y) any failure by Anadarko to include the Anadarko Board recommendation in this proxy statement/prospectus. Notwithstanding the foregoing restrictions, prior to obtaining the Anadarko stockholder approval:
| • | the Anadarko Board is permitted, in response to a superior proposal received after the date of the merger agreement and not resulting from a breach of the merger agreement, to not make the Anadarko Board recommendation or to withdraw or modify, in a manner adverse to Occidental, the Anadarko Board recommendation, or to cause Anadarko to terminate the merger agreement in accordance with its terms to enter into a definitive agreement providing for a superior proposal, if: |
| • | the Anadarko Board determines in its good faith judgment, after consulting with outside legal counsel, that making the Anadarko Board recommendation or failing to effect a change in the Anadarko recommendation would be reasonably likely to be inconsistent with the exercise of its fiduciary duties; |
| • | Anadarko has given Occidental advance written notice of its decision to take such action, including the reasons for the change and specifying the material terms and conditions of the applicable acquisition proposal and the identity of the person making the proposal; |
| • | for a period of four business days following the notice delivered pursuant to the immediately preceding bullet (the “superior proposal match period”), Occidental is given the opportunity to propose revisions to the terms of the merger agreement (or to make another proposal) in response to such acquisition proposal and during such period Anadarko has made its representatives reasonably available to negotiate with Occidental (to the extent Occidental wishes to negotiate) with respect to such proposed revisions or other proposal, if any (provided that any amendment or modification (other than immaterial amendments or modifications) of such acquisition proposal will require a new notice period with a new superior proposal match period of three business days); and |
| • | the Anadarko Board determines in good faith that the acquisition proposal is a superior proposal at the end of the superior proposal match period (as may be extended) and after consultation with, and taking into account the advice of, a financial advisor of nationally recognized reputation and outside legal counsel, as well as any revisions to the terms of the merger or the merger agreement proposed by Occidental; |
| • | the Anadarko Board is permitted, in response to an intervening event (as defined below) occurring after the date of the merger agreement and not relating to an acquisition proposal, to not make the Anadarko Board recommendation, or to effect a change in the Anadarko recommendation, if: |
| • | the Anadarko Board determines in its good faith judgment, as a result of the intervening event, after consulting with outside legal counsel, that making the recommendation or failing to effect a change in the Anadarko recommendation would be reasonably likely to be inconsistent with the exercise of its fiduciary duties to stockholders; |
| • | for a period of five business days following the notice delivered by Anadarko to Occidental of the decision of the Anadarko Board to take such action (the “intervening event match period”), which notice will describe the intervening event in reasonable detail, Occidental is given the opportunity to propose revisions to the merger agreement (or to make another proposal) in response to such intervening event and during such period Anadarko has made its representatives reasonably available to negotiate with Occidental (to the extent Occidental wishes to negotiate) with respect to such proposed revisions or other proposal, if any (provided that any change in fact (other than an immaterial change) relating to such intervening event will require a new notice period with a new intervening event match period of three business days); and |
| • | Occidental does not make, within the intervening event match period (as may be extended) a proposal that the Anadarko Board determines, in good faith, after consultation with, and taking into account the advice of, a financial advisor of nationally recognized reputation and outside legal counsel, would obviate the need to not make or withdraw or modify the Anadarko Board recommendation. |
An “intervening event” means any event, development or change in circumstances that was not known to the Anadarko Board, or the consequences of which were not reasonably foreseeable as of the date of the merger agreement, which event, change or development becomes known to the Anadarko Board prior to obtaining the approval of the Anadarko stockholders. However, the following events, changes or developments will not constitute an intervening event:
| • | the receipt, existence or terms of an acquisition proposal or any matter relating to, or consequences of, such acquisition proposal; or |
| • | any change in the price or trading volume of Anadarko’s common stock, Occidental’s common stock or any other securities of Anadarko, Occidental or any of their respective subsidiaries (provided that the underlying causes of such changes may constitute, or be taken into account in determining whether there has been, an intervening event). |
Even if the Anadarko Board changes its recommendation in favor of the merger agreement in a manner adverse to Occidental (but provided that Anadarko does not terminate the merger agreement in order to accept a superior proposal), Anadarko must still call a stockholder meeting as otherwise required by the merger agreement and submit the adoption of the merger agreement and the merger to the vote of Anadarko’s stockholders.
Best Efforts Covenant. Occidental and Anadarko have agreed to cooperate with each other and use their best efforts to promptly:
| • | take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable under the merger agreement and applicable laws to consummate and make effective the merger and the other transactions contemplated by the merger agreement as soon as practicable, including, without limitation, preparing and filing promptly and fully all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents; and |
| • | obtain as soon as practicable all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any third party or governmental body, agency, authority or official which are necessary, proper or advisable to consummate the merger and the other transactions contemplated by the merger agreement. |
Occidental and Anadarko have submitted the notifications required under the HSR Act relating to the merger. The FTC granted early termination of the applicable waiting period under the HSR Act on June 3, 2019. Prior to closing, Occidental and Anadarko have each agreed to keep the other apprised of the status of matters relating to the completion of the merger and work cooperatively in connection with obtaining all required approvals or consents of any governmental agency, body, authority or entity in connection with the merger. Occidental and Anadarko have certain rights to review and be informed of filings or written materials made or submitted by the other party to any governmental agency, body, authority or entity in connection with the transactions contemplated by the merger agreement, and are required to provide the other party with the opportunity to participate in any meeting with any governmental agency, body, authority or entity in respect of any filing, investigation or other inquiry in connection with the transactions contemplated by the merger agreement, provided that Occidental is entitled to lead all such processes.
Without limiting the foregoing, Occidental and Anadarko have also agreed to use their best efforts to:
| • | avoid the entry of, or to have vacated or terminated, any decree, order, or judgment that would restrain, prevent or delay the closing, on or before the end date (as defined under “—Termination of the Merger Agreement” below), including without limitation defending through litigation on the merits any claim asserted in any court by any person; and |
| • | avoid or eliminate each and every impediment under any antitrust, competition or trade regulation law that may be asserted by any governmental agency, body, authority or entity with respect to the merger so as to enable the closing to occur as soon as reasonably possible (and in any event no later than the end date), including, without limitation, (i) proposing, negotiating, committing to and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture or disposition of such businesses, product lines or assets of Occidental, Anadarko and their respective subsidiaries and (ii) otherwise taking or committing to take actions that after the closing would limit Occidental or its subsidiaries’ freedom of action with respect to, or its or their ability to retain, one or more of the businesses, product lines or assets of Occidental, Anadarko and their respective subsidiaries, in each case as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order in any suit or proceeding, which would otherwise have the effect of preventing or materially delaying the closing. |
Occidental and, if requested by Occidental, Anadarko will agree to divest, sell, dispose of, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or Occidental or Occidental’s subsidiaries’ ability to retain, any of the businesses, product lines or assets of Occidental, Anadarko or any of their respective subsidiaries, but only if such action is conditioned upon the completion of the merger. Neither Anadarko nor any of its subsidiaries may, without Occidental’s prior written consent, sell, divest or dispose of any assets, license any specified Anadarko intellectual property, commit to any sale, divestiture or disposal of businesses, product lines or assets of Anadarko and Anadarko’s subsidiaries or any license of specified Anadarko intellectual property or take any other action or commit to take any action that would limit Anadarko’s, Occidental’s or any of their respective subsidiaries’ freedom of action with respect to, or their ability to retain any of, their businesses, product lines or assets or specified Anadarko intellectual property.
However, notwithstanding the foregoing, Occidental is not required to take (or to request or authorize Anadarko or any of Anadarko’s subsidiaries to undertake) any action if it would reasonably be expected to result in a substantial detriment. For this purpose, “substantial detriment” means changes or effects which would, individually or in the aggregate (and after giving effect to any reasonably expected proceeds of any divestiture or sale of assets), result in, or be reasonably likely to result in, a material adverse effect on Anadarko and its subsidiaries, taken as a whole, at or after the effective time of the merger. Any requirement to divest, hold separate or limit the operation of any division, subsidiary, interest, business, product line, asset or property relating to the operations conducted by Occidental and its subsidiaries prior to the effective time of the merger
will be deemed to result in a substantial detriment if such action with respect to a comparable amount of assets or businesses of Anadarko and its subsidiaries, taken together with all other such actions taken, would be reasonably likely, in the aggregate, to have a material adverse effect on Anadarko and its subsidiaries, taken as a whole, at or after the effective time of the merger.
Certain Employee Benefits Matters. For one year following the effective time of the merger, Occidental will continue to provide to each individual who is employed by Anadarko and its subsidiaries as of the effective time of the merger who remains employed with Occidental or any of its subsidiaries (each an “affected employee”), for so long as such affected employee remains employed by Occidental or any of its subsidiaries during such one-year period:
| • | base compensation that is no less favorable than that which was provided to the affected employee immediately before the effective time of the merger; |
| • | short- and long-term incentive compensation opportunities that are no less favorable in the aggregate than those which were provided to the affected employee immediately before the effective time of the merger, and |
| • | all other compensation and employee benefits (excluding severance) that are no less favorable in the aggregate than those which were provided to the affected employee immediately before the effective time of the merger. |
For purposes of determining whether compensation and employee benefits are no less favorable in the aggregate, (i) retention, sale, stay or change-in-control payments or awards or any similar compensation or benefit will not be taken into account, (ii) in lieu of stock-based awards, Occidental may substitute other forms of cash-based compensation having substantially equivalent value and equivalent vesting terms and (iii) Occidental may determine the value of defined benefit pension plan benefits provided immediately prior to the effective time of the merger in its good faith discretion; provided, however, that defined benefit pension plan benefits will not be taken into account for purposes of determining whether all other compensation and employee benefits are no less favorable in the aggregate for any particular affected employee, if Occidental provides such affected employee with retirement benefits (excluding retiree welfare benefits) that are no less favorable than those provided to similarly situated employees of Occidental and its subsidiaries. However, notwithstanding the foregoing, the terms and conditions of employment for any affected employees who are covered by a collective bargaining agreement, works council agreement, or other contract or agreement with any labor union, works council or other employee representative organization will continue to be governed by such contract or agreement.
Occidental will, or will cause the surviving corporation to, give affected employees full credit for purposes of eligibility, vesting and benefit accrual (other than benefit accruals under any defined benefit pension or eligibility or benefit accruals under any post-employment or retiree health or welfare plan that, in each case, is not an Anadarko benefit plan) under any employee benefit plans or arrangements maintained by Occidental or any subsidiary of Occidental for such affected employees’ service with Anadarko or any of its subsidiaries (including any predecessor or acquired entity or any other entity for which Anadarko and its subsidiaries have given credit for prior service) to the same extent recognized by Anadarko immediately prior to the effective time of the merger, except to the extent that such credit would result in a duplication of benefits or compensation for the same period of service.
Occidental will, or will cause the surviving corporation to, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the affected employees under any welfare benefit plans in which such employees may be eligible to participate after the effective time of the merger, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the effective time of the merger under any welfare plan maintained for the affected employees immediately prior to the effective time of the merger, and (ii) for the year in which the effective time of the merger occurs, provide each affected employee with credit for any co-payments and deductibles paid prior to the effective time of the merger in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans in which such employees are eligible to participate after the effective time of the merger.
Indemnification and Insurance of Anadarko Directors and Officers. Occidental has agreed that:
| • | for six years after the effective time of the merger, it will cause the surviving corporation and each of its subsidiaries (other than Western Midstream Partners, LP and its subsidiaries) to indemnify, defend and hold harmless each person who is now, or has been at any time prior to the date of the merger agreement or who becomes, prior to the effective time of the merger, a director, officer or employee of Anadarko or of any such subsidiary, as applicable, or who acts as a fiduciary under any Anadarko benefit plan or is or was serving at the request of Anadarko or of such subsidiary as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, employee benefit plan, trust or other enterprise against all losses, claims, damages, costs, fines, penalties, expenses (including attorneys’ and other professionals’ fees and expenses), liabilities or judgments or amounts that are paid in settlement of, or incurred in connection with, any threatened or actual claim (including a claim of a violation of applicable law) or other proceeding, whether civil, criminal, administrative, investigative or otherwise and whether or not such claim or proceeding results in a formal civil or criminal litigation or regulatory action to which such person is involved based, in whole or in part, on or arising, in whole or in part, out of such service or by reason of anything done or not done by such person in any such capacity, whether pertaining to any act or omission occurring or existing prior to, at or after the effective time of the merger and whether asserted or claimed prior to, at or after the effective time of the merger, in each case to the fullest extent permitted by applicable law; |
| • | it will cause the surviving corporation to put in place, and Occidental will fully prepay no later than immediately prior to the closing of the merger, “tail” insurance policies with a claims reporting or discovery period of at least six years from the effective time of the merger with terms and conditions no less favorable than the current directors’ and officers’ liability insurance policies maintained by Anadarko with respect to matters, acts or omissions existing or occurring at or prior to the effective time of the merger; provided that Occidental may elect in its sole discretion, but will not be required, to spend more than 300% of the last annual premium paid by Anadarko prior to the date of the merger agreement for the six years of coverage under such “tail” policy. |
Coordination of Dividends. Occidental and Anadarko have agreed to coordinate the record and payment dates for their regular quarterly dividends to ensure that (i) Anadarko stockholders will not receive two dividends, or fail to receive one dividend, in any quarter with respect to their Anadarko common stock and Occidental common stock that such holders receive in exchange therefor in the merger and (ii) without limiting clause (i), that the date on which any quarterly dividend is declared and the record date with respect to any quarterly dividend is no later than five business days following the one-year anniversary of such dates for the corresponding quarter of the preceding year (provided that in the quarter in which the closing of the merger occurs, if the record date of Anadarko’s quarterly dividend has been declared and is a date prior to the effective time of the merger, then such quarterly dividend declaration date and record date of Anadarko will occur no later than such date as is necessary to ensure that holders of Anadarko common stock receive a quarterly dividend in accordance with clause (i)).
Financing. Occidental and Anadarko have agreed to cooperate with each other with respect to customary actions that are reasonably requested by Occidental to be taken by Anadarko or its subsidiaries under Anadarko’s existing credit facility or with respect to any of Anadarko’s outstanding debt securities in connection with the merger, subject to certain exceptions and requirements.
Occidental and Merger Subsidiary have agreed to, and have agreed to cause their respective subsidiaries to, use reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to arrange and obtain the committed financing (as defined below) on the terms and conditions set forth in the commitment letters (as defined below), including using reasonable best efforts to:
| • | maintain in effect the commitment letters until the completion of the transactions contemplated by the merger agreement (provided that the commitments under the commitment letters may be reduced in accordance with certain specific conditions); and |
| • | unless Occidental reduces the commitments under the commitment letters to zero pursuant to certain commitment reductions permitted by the merger agreement, (i) timely (and in any event by the effective time of the merger) negotiate and enter into definitive agreements with respect to the facilities |
contemplated by the commitment letters on the terms and conditions set forth therein, (ii) satisfy or cause to be waived on a timely basis (and in any event by the effective time of the merger) all conditions to funding applicable to Occidental set forth in the commitment letters or such definitive agreements that are within its (or any of its affiliates’) control and otherwise comply with its obligations thereunder and (iii) upon the satisfaction or waiver of such conditions, consummate, and cause the financing sources to fund, the committed financing at the effective time of the merger (including using reasonable best efforts to enforce all of its rights under the commitment letters).
“Commitment letters” means (i) the commitment letter dated as of May 9, 2019 from BofA, BAML and CGMI, pursuant to which BofA and CGMI have agreed, subject to the terms and conditions therein, to provide Occidental with debt financing in connection with the merger and the other transactions contemplated by the merger agreement and (ii) the executed fee letters referenced therein. “Committed financing” means the debt financing committed pursuant to the commitment letters. If Occidental obtains substitute commitment letters or alternative financing commitment letters, the terms “commitment letters” and “committed financing” will include such substitute commitment letters and alternative financing commitment letters and the substitute financing and alternative financing contemplated thereby, as applicable.
Occidental may substitute one or more commitments from financial institutions to provide substitute debt financing for all or any portion of the committed financing if such substitute financing satisfies certain conditions set forth in the merger agreement. Further, if any portion of the committed financing becomes unavailable, and such unavailable amount is reasonably required for Occidental and Merger Subsidiary to satisfy their obligations under the merger agreement at the effective time of the merger, Occidental will promptly notify Anadarko in writing of such unavailable financing and Occidental will use its reasonable best efforts to arrange and obtain, as promptly as reasonably practicable, alternative financing from alternative sources that satisfies certain conditions set forth in the merger agreement.
Occidental has agreed not to permit any amendment or modification to or waiver of any provision or remedy under, the commitment letters, any other definitive agreement related to the committed financing or the securities purchase agreement governing the Berkshire Hathaway investment, with certain exceptions. Occidental has also agreed to keep Anadarko reasonably informed on a timely basis of the status of Occidental’s efforts to obtain the committed financing, to satisfy the conditions of the committed financing and to give Anadarko prompt notice of any fact, change, event or circumstance that is reasonably likely to have, individually or in the aggregate, a material adverse impact on the committed financing, and of certain other occurrences specified in the merger agreement relating to the committed financing.
Until the effective time of the merger (or the earlier termination of the merger agreement), Anadarko has agreed to, and has agreed to cause each of its subsidiaries (other than Western Midstream Partners, LP and its subsidiaries) to, use its and their reasonable best efforts to cause its and their representatives to, use their respective reasonable best efforts to provide such customary cooperation as is reasonably requested by Occidental in writing to assist Occidental in the arrangement, syndication and completion of the committed financing or other bank financing or capital markets financing entered into to finance Occidental’s and Merger Subsidiary’s obligations under the merger agreement (collectively, the “financing”), including by using reasonable best efforts to take certain actions specified in the merger agreement.
Notwithstanding the foregoing, in connection with the financing or any cooperation contemplated by the financing covenant in the merger agreement, none of Anadarko or its subsidiaries or any of their respective representatives will:
| • | be required to provide any cooperation pursuant to the financing covenant to the extent such cooperation would reasonably be expected to interfere unreasonably with the ongoing business or operations of Anadarko and its subsidiaries; |
| • | be required to pass resolutions or consents to approve or authorize the execution of the financing or any other cooperation contemplated by the financing covenant, or execute or deliver any certificate, document, legal opinion, instrument or agreement or agree to any change or modification of any existing certificate, document, instrument or agreement in connection therewith, in each case, that (i) is effective prior to the effective time of the merger or that would be effective if the effective time of the merger does not occur (other than certain authorization letters) or (ii) would be inaccurate in light of the facts and circumstances at the time approved, authorized, executed or delivered, as applicable; |
| • | become bound by any terms of the financing prior to the effective time of the merger; |
| • | be required to pay any commitment or other similar fee or incur any other cost or expense for which it has not received simultaneous or prior reimbursement or, with respect to immaterial costs or expenses, for which it is not indemnified by or on behalf of Occidental in connection with the financing or any other cooperation contemplated by the financing covenant prior to the effective time of the merger; |
| • | be required to disclose or provide any information in connection with the financing or any other cooperation contemplated by the financing covenant, the disclosure of which, in the judgment of Anadarko, is restricted by contract or applicable law, is subject to attorney-client privilege (except that such person will use reasonable best efforts to disclose such information in a way that would not jeopardize such privilege) or could result in the disclosure of any trade secrets or the violation of any confidentiality obligation; provided, in each case, that Anadarko will, to the extent practicable and not prohibited by contract or applicable law, inform Occidental promptly of such contract, law, privilege or potential disclosure or violation; |
| • | be required to prepare or deliver (i) any financial information in a form not customarily prepared by Anadarko or its subsidiaries in the ordinary course of their business and not readily available to it, (ii) any financial information with respect to a fiscal period that has not yet ended or (iii) any pro forma financial information or projections; |
| • | be required to deliver any legal opinion or negative assurance letter in connection with the financing or any other cooperation contemplated by the financing covenant; |
| • | be required to take any action that would reasonably be expected to conflict with, result in any violation or breach of, or default (with or without notice, lapse of time, or both) under, any of their respective organizational or governing documents, or any applicable law or contracts; |
| • | be required to take any action that would cause Anadarko or any of its subsidiaries to breach any representation, warranty, covenant or agreement in the merger agreement; |
| • | be required to take any action that could reasonably be expected to cause any director, officer or employee or stockholder of Anadarko or any of its subsidiaries to incur any personal liability; or |
| • | be an issuer or other obligor with respect to the financing prior to the effective time of the merger. |
Occidental has agreed to indemnify and hold harmless Anadarko and each of its subsidiaries and their respective representatives from and against any and all liabilities, losses, damages, claims, costs, expenses (including reasonable attorney’s fees), interest, awards, judgments and penalties suffered or incurred in connection with any and all of the matters contemplated by the financing covenant (other than arising from fraud or willful misconduct on the part of Anadarko or its subsidiaries), whether or not the merger is consummated or the merger agreement is terminated. Occidental will also, promptly upon request by Anadarko, reimburse Anadarko for all reasonable out-of-pocket costs (including reasonable attorneys’ fees) incurred by Anadarko or its subsidiaries in connection with the financing covenant, whether or not the merger is consummated or the merger agreement is terminated.
Anadarko has agreed that, from and after January 1, 2020 until the effective time of the merger, none of Anadarko or any of its subsidiaries (other than Western Midstream Partners, LP or its subsidiaries) will, without the prior written consent of Occidental (not to be unreasonably withheld or delayed), file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future (provided that Anadarko and its subsidiaries may file any Form S-8 registration statement and consummate any transaction under such Form S-8 registration statement).
Occidental and Merger Subsidiary have also acknowledged and agreed that obtaining or consummating any or all of the committed financing or any other financing is not a condition to the merger, and that if any of the committed financing or other financing is not obtained or consummated, Occidental and Merger Subsidiary will
each continue to be obligated to consummate the merger, subject to the conditions described under “—Conditions to the Completion of the Merger” below.
Other Covenants. The merger agreement contains certain other covenants and agreements, including covenants relating to, among other matters:
| • | the resignations of Anadarko directors; |
| • | Occidental taking all necessary actions to cause the shares of Occidental common stock issuable in connection with the merger to be approved for listing on the NYSE (subject to official notice of issuance); |
| • | Occidental causing Merger Subsidiary to comply with its obligations under the merger agreement; |
| • | cooperation between Anadarko and Occidental regarding additional filings with governmental entities; |
| • | cooperation between Anadarko and Occidental in the preparation of this proxy statement/prospectus; |
| • | confidentiality and access by each party to certain information about the other party during the period before the effective time of the merger; |
| • | cooperation between Anadarko and Occidental in connection with public announcements; |
| • | further assurances regarding actions necessary to vest, perfect or confirm of record in the surviving corporation any and all right, title and interest in the rights, properties or assets of Anadarko as a result of the merger; |
| • | notification to the other party of any notices from governmental entities or any actions commenced or threatened in connection with the merger; |
| • | taking all actions as are legally permissible to eliminate or minimize the effects of takeover laws on the merger and the transactions contemplated thereby; |
| • | causing any dispositions of Anadarko common stock resulting from the merger and any acquisitions of Occidental common stock resulting from the merger by each individual who may become subject to reporting requirements of Section 16(a) of the Exchange Act to be exempt under Rule 16b-3 promulgated under the Exchange Act; |
| • | cooperation between the parties and the use of Anadarko’s reasonable best efforts to cause (i) the delisting of the Anadarko common stock from the NYSE as promptly as practicable after the effective time of the merger and (ii) deregistration of the Anadarko common stock pursuant to the Exchange Act as promptly as practicable after such delisting; |
| • | cooperation between the parties with respect to the treatment of certain indebtedness of Anadarko; and |
| • | cooperation between Anadarko and Occidental in the defense or settlement of any stockholder litigation relating to the merger. |
Representations and Warranties
Anadarko makes various representations and warranties to Occidental in the merger agreement that are subject in some cases to exceptions and qualifications set forth in the merger agreement. These representations and warranties relate to, among other things:
| • | corporate authorization to enter into the merger agreement and to consummate the transactions contemplated by the merger agreement; |
| • | the stockholder vote and governmental approvals required in connection with the contemplated transactions; |
| • | absence of any breach of organizational documents, law or certain material agreements as a result of the contemplated transactions; |
| • | capitalization; |
| • | ownership of subsidiaries; |
| • | matters relating to Western Midstream Partners, LP; |
| • | filings with the SEC; |
| • | financial statements; |
| • | accuracy of information provided for inclusion in this proxy statement/prospectus; |
| • | disclosure controls and procedures and internal control over financial reporting; |
| • | absence of material changes since December 31, 2018; |
| • | absence of undisclosed material liabilities; |
| • | litigation; |
| • | tax matters; |
| • | employee benefits and labor matters; |
| • | compliance with laws; |
| • | regulatory matters, including compliance with (i) anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act of 1977 and the U.K. Bribery Act 2010, (ii) money laundering related laws, such as the U.S. Currency and Foreign Transaction Reporting Act of 1970 and the U.S. Money Laundering Control Act of 1986 and (iii) economic sanctions/trade laws; |
| • | environmental matters; |
| • | title to properties; |
| • | material contracts and contracts relating to Anadarko’s exploration and production operations; |
| • | intellectual property; |
| • | confidentiality agreements; |
| • | finders’ or advisors’ fees; |
| • | receipt by the Anadarko Board of opinions of Anadarko’s financial advisors as to the fairness, from a financial point of view, of the merger consideration to be received by Anadarko stockholders pursuant to the merger agreement; |
| • | inapplicability of the Delaware anti-takeover statute; and |
| • | termination of the Agreement and Plan of Merger, dated as of April 11, 2019, by and among Chevron Corporation, Justify Merger Sub 1 Inc., Justify Merger Sub 2 Inc. and Anadarko, and payment of the related termination fee. |
In addition, Occidental and Merger Subsidiary make representations and warranties to Anadarko. These representations and warranties relate to, among other things:
| • | corporate authorization to enter into the merger agreement and to consummate the transactions contemplated by the merger agreement; |
| • | the governmental approvals required in connection with the contemplated transactions; |
| • | absence of any breach of organizational documents, law or certain material agreements as a result of the contemplated transactions; |
| • | capitalization; |
| • | filings with the SEC; |
| • | financial statements; |
| • | accuracy of information provided for inclusion in this proxy statement/prospectus; |
| • | disclosure controls and procedures and internal control over financial reporting; |
| • | absence of material changes since December 31, 2018; |
| • | absence of undisclosed material liabilities; |
| • | litigation; |
| • | compliance with laws; |
| • | regulatory matters, including compliance with (i) anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act of 1977 and the U.K. Bribery Act 2010, (ii) money laundering related laws, such as the U.S. Currency and Foreign Transaction Reporting Act of 1970 and the U.S. Money Laundering Control Act of 1986 and (iii) economic sanctions/trade laws; |
| • | the commitment letters and sufficiency of funds; |
| • | capitalization of Merger Subsidiary; and |
| • | ownership of Anadarko common stock. |
The representations and warranties in the merger agreement do not survive the closing or termination of the merger agreement.
Certain of the representations and warranties made by the parties are qualified as to “knowledge”, “materiality” or “material adverse effect”. For purposes of the merger agreement, “material adverse effect” means, with respect to either Occidental or Anadarko, as applicable, any state of facts, change, development, event, effect, condition or occurrence (each, an “effect”) that, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the financial condition, business, assets or continuing results of operations of the relevant company and its subsidiaries, taken as a whole. However, in no event will any of the following effects, alone or in combination, be deemed to constitute, or be taken into account, in determining whether there has been, or would be, a material adverse effect:
| • | any changes in general U.S. or global economic conditions or securities, credit, financial or other capital markets conditions; |
| • | any changes or conditions affecting the oil and gas industry in general (including changes to commodity prices, general market prices and regulatory changes affecting the industry); |
| • | any weather-related or other force majeure event (including earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters); |
| • | acts of war (whether or not declared), armed hostility (by recognized governmental forces or otherwise), sabotage, terrorism or cyber-attack, and any escalation or general worsening of any of the foregoing; |
| • | the negotiation, execution, announcement, pendency, compliance with or performance of the merger agreement, the transactions contemplated thereby or the terms thereof or the completion of the transactions contemplated thereby, including the impact thereof on the relationships of the relevant company and its subsidiaries with customers, suppliers, partners, employees or governmental bodies, agencies, officials or authorities (provided that this clause will not apply to any representation or warranty made by the relevant company in the section entitled “Non-Contravention” of the merger agreement (and, solely with respect to Anadarko, certain representations and warranties set forth in the merger agreement related to the entitlement of any current or former employee, consultant or officer of Anadarko or any of its subsidiaries as a result of the completion of the transactions contemplated by the merger agreement to severance pay, unemployment compensation or any other payment (except as provided in the merger agreement or as required by law) or the acceleration of the time of payment or vesting, increase in the amount of compensation due to any such employee, consultant or officer or triggering of any other material obligation pursuant to any company benefit plan, except as provided in the merger agreement) (or any condition to any party’s obligation to consummate the merger relating to such representation and warranty) to the extent the purpose of such representation and warranty is to address the consequences resulting from the execution and delivery of the merger agreement or the completion of the merger); |
| • | any action taken or failure to take action that the other party has requested in writing; |
| • | changes in applicable law or regulation or in GAAP or in accounting standards, or any changes in the interpretation or enforcement of any of the foregoing, or any changes in general legal, regulatory or political conditions; |
| • | any decline in the market price, or change in trading volume, of such party’s capital stock; or |
| • | any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, or budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position (it being understood that the exceptions in this clause and the clause immediately prior to this clause will not prevent or otherwise affect a determination that the underlying cause of any such change, decline or failure referred to therein (if not otherwise falling within any of the exceptions provided in the merger agreement) is a material adverse effect); |
provided that, in the case of the first four clauses listed above, to the extent the impact on the relevant company and its subsidiaries, taken as a whole, is disproportionate to the impact on other similarly situated entities, the incrementally disproportionate impact or impacts will be taken into account in determining whether there has been, or would reasonably be expected to be, a material adverse effect.
Conditions to Completion of the Merger
The obligations of each of Occidental, Anadarko and Merger Subsidiary to complete the merger are subject to the satisfaction or, to the extent permitted by law and in accordance with the merger agreement, waiver of the following conditions:
| • | adoption by the Anadarko stockholders of the merger agreement; |
| • | expiration or termination of the HSR Act waiting period; |
| • | absence of any legal or regulatory prohibition on completion of the merger; |
| • | Occidental’s registration statement on Form S-4, which includes this proxy statement/prospectus, being effective and not subject to any stop order by the SEC; and |
| • | approval for the listing on the NYSE of the shares of Occidental common stock to be issued in the merger. |
In addition, the obligations of each of Occidental, Anadarko and Merger Subsidiary to complete the merger are subject to the satisfaction or, to the extent permitted by law and in accordance with the merger agreement, waiver of the following conditions:
| • | accuracy as of closing of the representations and warranties made by the other party to the extent specified in the merger agreement; |
| • | performance in all material respects of all of the obligations of the other party required to be performed by it in the merger agreement prior to the closing date of the merger; and |
| • | receipt of a certificate executed by an authorized officer of the other party certifying that the conditions above have been satisfied. |
Termination of the Merger Agreement
Right to Terminate. The merger agreement may be terminated at any time prior to the effective time of the merger, even if the Anadarko stockholders have previously approved the merger, in any of the following ways:
| • | By the mutual written consent of Occidental and Anadarko. |
| • | By either Occidental or Anadarko: |
| • | if the merger has not been completed by February 9, 2020 (or, if the reason for not closing by February 9, 2020 is that the regulatory conditions specified in the merger agreement have not been satisfied by that date or because of an injunction prohibiting completion of the merger, and all other closing conditions of the parties have been satisfied, duly waived or are then capable of |
being satisfied, May 9, 2020), provided that neither Occidental nor Anadarko can terminate the merger agreement due to the occurrence of the end date if its failure to fulfill any obligation under the merger agreement has principally caused or resulted in the failure to complete the merger on or before such end date; or
| • | if the Anadarko stockholder approval has not been obtained by reason of the failure to obtain the required vote at a duly held meeting of stockholders or at any adjournment thereof; or |
| • | if there is any law or regulation that makes completion of the merger illegal or otherwise prohibited or if any judgment, injunction, order or decree enjoining Occidental or Anadarko from consummating the merger is entered and such judgment, injunction, order or decree becomes final and nonappealable; provided that this right to terminate the merger agreement will not be available to any party whose failure to fulfill any obligation under the covenant to use best efforts has principally caused or resulted in the imposition of such restraint or the failure of such restraint to be resisted, resolved or lifted; or |
| • | if there has been a breach by the other party of any of its representations, warranties, covenants or agreements contained in the merger agreement, which breach results in the failure to satisfy certain conditions to the obligations of Occidental and Merger Subsidiary (in the case of a breach by Anadarko) or certain conditions to the obligations of Anadarko (in the case of a breach by Occidental) to the merger, and such breach is incapable of being cured or, if capable of being cured, has not been cured within 30 days after written notice thereof to the party alleged to be in breach. |
| • | By Occidental: |
| • | prior to receipt of the Anadarko stockholder approval, if there has been a change in the Anadarko recommendation, whether or not permitted by the terms of the merger agreement (or the Anadarko Board or any committee thereof resolves to effect a change in the Anadarko recommendation). |
| • | By Anadarko: |
| • | in order to enter into a definitive agreement with respect to a superior proposal, only if Anadarko has complied with the specific procedures and requirements set out in the merger agreement with regard to the superior proposal and has paid the applicable termination fee. |
If the merger agreement is terminated as described above, the merger agreement will be void and have no effect, and there will be no liability or obligation on the part of any party, except that:
| • | certain provisions contained in the merger agreement with respect to the effect of termination, the allocation of costs and expenses and the termination fees will survive the termination of the merger agreement; |
| • | the agreements contained in the confidentiality agreement between Occidental and Anadarko will survive the termination of the merger agreement; and |
| • | no termination will relieve any party of any liability or damages resulting from any material and intentional breach by that party of the merger agreement. |
In addition, none of the financing sources will have any liability to Anadarko or any of its affiliates, and neither Anadarko nor any of its affiliates will have any rights or claims against any financing sources, relating to or arising out of the merger agreement, the debt commitment letters, the financing for the transactions contemplated by the merger agreement or otherwise. “Financing sources” means any agent, arranger, lender or other entity that has committed to provide or arrange, or has entered into definitive agreements related to, the committed financing or any other financing, or any of such person’s affiliates or its or their respective officers, directors, employees, partners, trustees, shareholders, controlling persons, agents, representatives, successors or assigns.
Termination Fees Payable by Anadarko. Anadarko has agreed to pay or cause to be paid to Occidental $1 billion in connection with a termination of the merger agreement under the following circumstances:
| • | if Occidental terminates the merger agreement pursuant to a change in the Anadarko recommendation, then Anadarko will pay or cause to be paid $1 billion not later than the date of termination of the merger agreement; |
| • | if (i) the merger agreement is terminated by Anadarko or Occidental pursuant to not having obtained the Anadarko stockholder approval by reason of the failure to obtain the required vote at a duly held meeting of stockholders or any adjournment thereof and (ii) on or before the date of such termination an acquisition proposal has been made and become publicly known, whether or not withdrawn, prior to the special meeting, then Anadarko will pay or cause to be paid $1 billion not later than the date an acquisition proposal (defined for this purpose with all references to “20%” in the definition of acquisition proposal (found on page 109) being replaced with references to “50%”) is consummated or a definitive agreement is entered into by Anadarko providing for any such acquisition proposal, so long as such acquisition proposal is consummated or such definitive agreement is executed within 12 months after the date of termination; |
| • | if (i) the merger agreement is terminated by Anadarko or Occidental due to the failure to consummate the merger by the end date and the Anadarko stockholder approval has not been obtained and (ii) on or before the date of such termination an acquisition proposal has been made and become publicly known, whether or not withdrawn, prior to the date of such termination, then Anadarko will pay or cause to be paid $1 billion not later than the date an acquisition proposal (defined for this purpose with all references to “20%” in the definition of acquisition proposal being replaced with references to “50%”) is consummated or a definitive agreement is entered into by Anadarko providing for any such acquisition proposal, so long as such acquisition proposal is consummated or such definitive agreement is executed within 12 months after the date of termination; |
| • | if (i) the merger agreement is terminated by Occidental pursuant to a breach by Anadarko of any of its representations, warranties, covenants or agreements, which breach resulted in the failure to satisfy one or more of certain additional conditions to the obligations of Occidental and Merger Subsidiary to the merger, and the Anadarko stockholder approval has not been obtained and (ii) on or before the date of such termination an acquisition proposal has been made and become publicly known, whether or not withdrawn, prior to the date of such termination, then Anadarko will pay or cause to be paid $1 billion not later than the date an acquisition proposal (defined for this purpose with all references to “20%” in the definition of acquisition proposal being replaced with references to “50%”) is consummated or a definitive agreement is entered into by Anadarko providing for any such acquisition proposal, so long as such acquisition proposal is consummated or such definitive agreement is executed within 12 months after the date of termination; or |
| • | if the merger agreement is terminated by Anadarko pursuant to its entry into a definitive agreement with respect to a superior proposal, then Anadarko will pay or cause to be paid $1 billion not later than the date of termination of the merger agreement. |
Termination Fees Payable by Occidental. Occidental has agreed to pay or cause to be paid to Anadarko $1 billion if the merger agreement is terminated by Anadarko pursuant to a breach by Occidental of any of its representations, warranties, covenants or agreements, which breach resulted in the failure to satisfy certain conditions to the obligations of Anadarko to the merger. In such circumstances, Occidental will pay or cause to be paid $1 billion within two business days after the date of termination of the merger agreement.
Except as described above, all costs and expenses incurred in connection with the merger agreement and related transactions will be paid by the party incurring such costs or expenses, except that Occidental will pay (i) expenses incurred in connection with printing, mailing and filing this proxy statement/prospectus, (ii) fees paid in respect of the HSR Act in connection with the merger and (iii) all reasonable and documented fees, costs and expenses incurred (x) in connection with any cooperation provided or action taken in connection with the treatment of Anadarko’s existing credit agreement or any of Anadarko’s outstanding debt securities in connection with the merger or (y) in connection with the financing.
Any provision of the merger agreement may be amended or waived prior to the effective time of the merger if the amendment or waiver is in writing and signed, in the case of an amendment, by Occidental, Anadarko and Merger Subsidiary or, in the case of a waiver, by the party against whom the waiver is to be effective. After the adoption of the merger agreement by the stockholders of Anadarko, no amendment or waiver may, without the further approval of Anadarko’s stockholders, alter or change the amount or kind of merger consideration or any term of Occidental’s certificate of incorporation. Notwithstanding the foregoing, no amendments or modifications to the provision to which the financing sources are expressly made third-party beneficiaries pursuant to the merger agreement may be made in a manner adverse to any financing source without the prior written consent of the financing sources.
Governing Law; Jurisdiction; Waiver of Jury Trial
The merger agreement will be construed in accordance with and governed by the law of the State of Delaware, without regard to principles of conflicts of laws. However, matters relating to claims, controversies, or disputes of any kind or nature against any financing sources that are in any way related to the merger agreement or the merger, including any dispute arising out of or relating in any way to any debt financing to be consummated by Occidental or any of its subsidiaries in connection with the merger, will be construed and governed by the law of the state of New York, without regard to the principles of conflicts of laws thereof. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, the merger agreement or the transactions contemplated thereby may only be brought in the Court of Chancery of the State of Delaware (or, only if such court declines to accept jurisdiction over a particular matter, then in the United States District Court for the District of Delaware or, if jurisdiction is not then available in the United States District Court for the District of Delaware (but only in such event), then in any court of the State of Delaware sitting in New Castle County) and any appellate court from any of such courts (the “Delaware Courts”) and each party irrevocably consents to the exclusive jurisdiction of the Delaware Courts in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, the parties, with respect to matters relating to claims, controversies or disputes of any kind or nature against any financing source that are in any way related to the merger agreement or the merger, including any dispute arising out of or relating in any way to any committed financing, irrevocably submit exclusively to the jurisdiction of the courts of any federal court sitting in the Borough of Manhattan in the City of New York (or, only if such court lacks subject matter jurisdiction, in any New York State court sitting in the Borough of Manhattan in the City of New York), and waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement of the merger agreement or of any such document, that it is not subject to the merger agreement or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue of such action, suit or proceeding may not be appropriate or that the merger agreement or any such document may not be enforced in or by such courts, and the parties irrevocably agree that all claims relating to such action, suit or proceeding will be heard and determined in such a state or federal court. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any of the Delaware Courts. Each of the parties to the merger agreement irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to the merger agreement or the transactions contemplated thereby.
The parties will be entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement in addition to any other remedy to which they are entitled at law or in equity.
Neither the merger agreement nor any other agreement contemplated thereby is intended to confer on any person other than the parties thereto any rights or remedies, except for:
| • | the provisions of the merger agreement relating to indemnification and exculpation from liability for the directors and officers of Anadarko; |
| • | from and after the completion of the merger, the holders of Anadarko common stock and Anadarko stock-based awards (solely with respect to the provisions governing such holders’ rights to receive the merger consideration or related payments in respect of stock-based awards); and |
| • | certain specified provisions of the merger agreement applicable to the financing sources that are intended to benefit and be enforceable by the financing sources. |
