STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of June 30, 1996, by
and between Landmark Graphics Corporation, a Delaware corporation (the
"Company"), and Halliburton Company, a Delaware corporation (the "Grantee").
Recitals
The Grantee, the Company and Halliburton Acq. Company, a Delaware
corporation and a wholly-owned subsidiary of the Grantee ("Newco") propose to
enter into an Agreement and Plan of Merger dated as of the date hereof (the
"Merger Agreement") providing for, among other things, the merger (the "Merger")
of the Company with and into Newco which shall be the surviving corporation.
The Board of Directors of the Company has recommended the approval of
the Merger Agreement and the Merger by the holders of Company Common Stock.
As a condition and inducement to the Grantee's willingness to enter
into the Merger Agreement, the Grantee has requested that the Company agree, and
the Company has agreed, to grant the Grantee the Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, the Company and the Grantee agree as follows:
1. Capitalized Terms. Capitalized terms used but not defined
herein are defined in the Merger Agreement and are used herein with the
same meanings as ascribed to them therein; provided, however, that, as
used in this Agreement, "Person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
2. Grant of Option. Subject to the terms and conditions set
forth herein, the Company hereby grants to the Grantee an irrevocable
option (the "Option") to purchase, out of the authorized but unissued
Company Common Stock, a number of shares equal to up to 15.0% of the
shares of Company Common Stock outstanding as of the date hereof (as
adjusted as set forth herein) (the "Option Shares"), at a purchase
price of $31.857 per Option Share (the "Exercise Price").
3. Term. The Option shall be exercisable and shall remain in
full force and effect until the earliest to occur of (i) the Effective
Time, (ii) the first anniversary of the receipt by Grantee of written
notice from the Company of the occurrence of an Exercise
STOCK OPTION AGREEMENT
-1-
Event (as hereinafter defined) or (iii) termination of the Merger
Agreement prior to the occurrence of an Exercise Event, at which time
the Option shall terminate and be of no further force or effect (the
"Term"). The rights and obligations set forth in Sections 7, 8, 9 and
10 shall not terminate when the right to exercise the Option terminates
as set forth herein, but shall extend to such time as is provided in
those Sections.
4. Exercise of Option.
(a) The Grantee may exercise the Option, in whole or
in part, at any time and from time to time during the Term
following the occurrence of an Exercise Event. Notwithstanding
the expiration of the Term, the Grantee shall be entitled to
purchase those Option Shares with respect to which it has
exercised the Option in accordance with the terms hereof prior
to the expiration of the Term.
(b) As used herein, an "Exercise Event" shall mean
any of the following events:
(i) any Person (other than the Grantee or
any subsidiary of the Grantee) shall have commenced
(as such term is defined in Rule 14d-2 under the
Exchange Act) or shall have filed a registration
statement under the Securities Act with respect to a
tender offer or exchange offer to purchase any shares
of Company Common Stock such that, upon consummation
of such offer, such Person would own or control 25%
or more of the then outstanding Company Common Stock;
(ii) the Company or any subsidiary of the
Company shall have authorized, recommended, proposed
or publicly announced an intention to authorize,
recommend or propose, or entered into, an agreement
with any Person (other than the Grantee or any
subsidiary of the Grantee) to (A) effect a merger,
consolidation, share exchange or similar transaction
involving the Company or any of its Significant
Subsidiaries, (B) sell, lease or otherwise dispose of
assets of the Company or its subsidiaries
representing 15% or more of the consolidated assets
of the Company and its subsidiaries or (C) issue,
sell or otherwise dispose of (including by way of
merger, consolidation, share exchange or any similar
transaction) securities (or options, rights or
warrants to purchase, or securities convertible into
or exchangeable for, such securities) representing
15% or more of the voting power of the Company or any
of its Significant Subsidiaries;
(iii) any Person (other than the Grantee or
any Subsidiary of the Grantee or the Company or, in a
fiduciary capacity, any of its Subsidiaries) shall
have, subsequent to the date of this Agreement,
acquired beneficial ownership (as such term is
defined in Rule 13d-3 under the Exchange Act)
STOCK OPTION AGREEMENT
-2-
or the right to acquire beneficial ownership of, or
any "Group" (as such term is defined under the
Exchange Act) shall have been formed which
beneficially owns or has the right to acquire
beneficial ownership of, 25% or more of the then
outstanding Company Common Stock; or
(iv) the holders of Company Common Stock
shall not have approved the Merger Agreement at the
meeting of such stockholders held for the purpose of
voting on the Merger Agreement or such meeting shall
not have been called as required by the terms of the
Merger Agreement or shall have been canceled, in each
case after any Person (other than the Grantee or any
subsidiary of the Grantee) shall have publicly
announced a proposal, or publicly disclosed an
intention to make a proposal, to engage in any
transaction described in clauses (i), (ii) or (iii)
above, or the Company's Board of Directors shall have
withdrawn or modified in a manner materially adverse
to the Grantee the recommendation of the Company's
Board of Directors that the holders of the Company
Common Stock approve the Merger Agreement and the
Merger.
(c) If the Grantee wishes to exercise the Option, it shall
send a written notice (the date of which being herein referred to as
the "Notice Date") to the Company specifying (i) the total number of
Option Shares it intends to purchase pursuant to such exercise and (ii)
a place and a date not earlier than three (3) Business Days nor later
than fifteen (15) Business Days from the Notice Date for the closing of
such purchase (the "Closing Date"); provided, however, that, if the
closing of the purchase and sale pursuant to the Option (the "Closing")
cannot be consummated by reason of any applicable Law, Regulation or
Order, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and, provided, further,
that, without limiting the foregoing, if prior notification to or
approval of any Governmental Authority is required in connection with
such purchase, the Grantee and, if applicable, the Company shall
promptly file the required notice or application for approval and shall
expeditiously process the same (and the Company shall cooperate with
the Grantee in the filing of any such notice or application and the
obtaining of any such approval), and the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on
which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and,
in either event, any requisite waiting period has passed.
(d) Notwithstanding Section 4(c), in no event shall any
Closing Date be more than eighteen (18) months after the related Notice
Date, and, if the Closing Date shall not have occurred within eighteen
(18) months after the related Notice Date due to the failure to obtain
any required approval of a Governmental Authority, the exercise of the
Option effected on the Notice Date shall be deemed to have expired. If
(i) the Grantee receives official notice that an approval of any
Governmental Authority required for the purchase of
STOCK OPTION AGREEMENT
-3-
Option Shares will not be issued or granted or (ii) a Closing Date
shall not have occurred within eighteen (18) months after the related
Notice Date due to the failure to obtain any such required approval of
a Governmental Authority, the Grantee shall be entitled to exercise its
right as set forth in Section 6 or to exercise the Option in connection
with the resale of the Company Common Stock or other securities
pursuant to a registration statement as provided in Section 8. The
provisions of this Section 4 and Section 5 shall apply with appropriate
adjustments to any such exercise.
5. Payment and Delivery of Certificates.
(a) On each Closing Date, the Grantee shall pay to
the Company in immediately available funds by wire transfer to
a bank account designated by the Company an amount equal to
the Exercise Price multiplied by the Option Shares to be
purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery
of immediately available funds as provided in Section 5(a),
the Company shall deliver to the Grantee a certificate or
certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be fully paid and
nonassessable and free and clear of all Liens, and Grantee
shall deliver to the Company its written agreement that the
Grantee will not offer to sell or otherwise dispose of such
Option Shares in violation of applicable Law or the provisions
of this Agreement.
(c) Certificates for the Option Shares delivered at
each Closing shall be endorsed with a restrictive legend which
shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS ARISING UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF
JUNE 30, 1996. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE COMPANY OF A WRITTEN REQUEST THEREFOR.
A new certificate or certificates evidencing the same number
of shares of the Company Common Stock will be issued to the
Grantee in lieu of the certificate bearing the above legend,
which new certificate shall not bear such legend, insofar as
it applies to the Securities Act, if the Grantee shall have
delivered to the Company a copy of a letter from the staff of
the Commission, or an opinion of counsel in form and substance
reasonably satisfactory to the Company and its counsel, to the
effect that such legend is not required for purposes of the
Securities Act.
STOCK OPTION AGREEMENT
-4-
6. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in the Company Common
Stock by reason of a stock dividend, split-up, combination,
recapitalization, exchange of shares or similar transaction,
the type and number of shares or securities subject to the
Option, and the Exercise Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the
agreements governing such transaction, so that the Grantee
shall receive upon exercise of the Option the same class and
number of outstanding shares or other securities or property
that Grantee would have received in respect of the Company
Common Stock if the Option had been exercised immediately
prior to such event, or the record date therefor, as
applicable. If any additional shares of the Company Common
Stock are issued after the date of this Agreement (other than
pursuant to an event described in the first sentence of this
Section 6(a)), the Company shall give written notice thereof
to the Grantee and, at the Grantee's option exercisable within
ten (10) Business Days after the Grantee's receipt of such
notice, the number of shares of the Company Common Stock
subject to the Option shall be adjusted so that, after such
issuance, it equals 15.0% of the number of shares of the
Company Common Stock then issued and outstanding, so that
shares issued pursuant to the Option and shares remaining to
be issued pursuant to the Option will, in the aggregate, equal
15% of the then issued and outstanding shares of Company
Common Stock; provided, however, that the number of shares of
the Company Common Stock subject to the Option shall only be
increased to the extent the Company then has available
authorized but unissued and unreserved shares of the Company
Common Stock.
(b) If the Company shall enter into an agreement (i)
to consolidate or exchange shares with or merge into any
Person, other than the Grantee or one of its subsidiaries, and
shall not be the continuing or surviving corporation or other
Person of such consolidation or merger, (ii) to permit any
Person, other than the Grantee or one of its Subsidiaries, to
merge into the Company and the Company shall be the continuing
or surviving corporation, but, in connection with such merger,
the then outstanding shares of Company Common Stock shall be
changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property, or
the shares of Company Common stock outstanding immediately
before such merger shall after such merger represent less than
50% of the outstanding common shares and common share
equivalents of the Company or (iii) to sell, lease or
otherwise transfer all or substantially all of its assets to
any Person, other than the Grantee or one of its Subsidiaries,
then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option
shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into,
or exchanged for, an option, at the election of the Grantee,
of any of the following Persons (as designated by the Grantee)
(A) the Acquiring Corporation (as hereinafter defined), (B)
any Person that controls the
STOCK OPTION AGREEMENT
-5-
Acquiring Corporation or (C) in the case of a merger described
in clause (ii), the Company.
(c) For purposes of this Section 6, "Acquiring
Corporation" means (i) the continuing or surviving corporation
or other Person of a consolidation, share exchange or merger
with the Company (if other than the Company), (ii) the Company
in a merger or share exchange in which the Company is the
continuing or surviving corporation and (iii) the transferee
of all or substantially all of the Company's assets. The
provisions of Sections 7, 8, 9, 10 and 11 shall apply with
appropriate adjustments to any securities for which the Option
becomes exercisable pursuant to this Section 6.
7. Repurchase at the Option of Grantee.
(a) Unless the Option shall have theretofore expired
or been terminated in accordance with the terms hereof, at the
request of the Grantee made at any time commencing upon the
first occurrence of a Repurchase Event (as hereinafter
defined) and ending on the first anniversary thereof (the "Put
Period"), the Company (or any successor thereto) shall
repurchase from the Grantee (i) that portion of the Option
that then remains unexercised and (ii) all (but not less than
all) the shares of Company Common Stock purchased by the
Grantee pursuant hereto and with respect to which the Grantee
then has beneficial ownership. The date on which the Grantee
exercises its rights under this Section 7 is referred to as
the "Request Date." Such repurchase shall be at an aggregate
price (the "Section 7 Repurchase Consideration") equal to the
sum of:
(i) the aggregate exercise price paid for
any shares of Company Common Stock acquired pursuant
to the Option and with respect to which the Grantee
then has beneficial ownership;
(ii) the excess, if any, of the Applicable
Price (as defined below), over the Exercise Price
(subject to adjustment pursuant to Section 6) paid
(or, in the case of Option Shares with respect to
which the Option has been exercised but the Closing
Date has not occurred, payable) by the Grantee for
each share of Company Common Stock with respect to
which the Option has been exercised and with respect
to which the Grantee then has beneficial ownership,
multiplied by the number of such shares; and
(iii) the excess, if any, of (x) the
Applicable Price for each share of Company Common
Stock over (y) the Exercise Price (subject to
adjustment pursuant to Section 6), multiplied by the
number of shares of Company Common Stock with respect
to which the Option has not been exercised.
STOCK OPTION AGREEMENT
-6-
(b) If the Grantee exercises its rights under this
Section 7, the Company shall, within ten (10) Business Days
after the Request Date, pay the Section 7 Repurchase
Consideration to the Grantee in immediately available funds,
and the Grantee shall surrender to the Company the Option and
the certificates evidencing the shares of Company Common Stock
purchased thereunder with respect to which the Grantee then
has beneficial ownership, and the Grantee shall warrant to the
Company that, immediately prior to the repurchase thereof
pursuant to this Section 7, the Grantee had sole record and
beneficial ownership of such shares and that such shares were
then held free and clear of all Liens.
(c) For purposes of this Agreement, the "Applicable
Price' means the highest of (i) the highest price per share at
which a tender or exchange offer has been made for shares of
Company Common Stock after the date hereof and on or prior to
the Request Date, (ii) the price per share to be paid by any
third Person for shares of Company Common Stock, in each case
pursuant to an agreement for a merger or other business
combination transaction with the Company entered into on or
prior to the Request Date, or (iii) the highest closing sales
price per share of Company Common Stock quoted on the New York
Stock Exchange Composite Transactions or, if not so quoted, on
the New York Stock Exchange (or if Company Common Stock is not
quoted on the New York Stock Exchange, the highest bid price
per share as quoted on The NASDAQ Stock Market or, if the
shares of Company Common Stock are not quoted thereon, on the
principal trading market on which such shares are traded as
reported by a recognized source) during the sixty (60)
Business Days preceding the Request Date. If the consideration
to be offered, paid or received pursuant to either of the
foregoing clauses (i) or (ii) shall be other than in cash, the
value of such consideration shall be determined in good faith
by an independent nationally recognized investment banking
firm selected by the Grantee and reasonably acceptable to the
Company, which determination shall be conclusive for all
purposes of this Agreement.
(d) As used herein, a "Repurchase Event" means the
occurrence of any Exercise Event specified in Section
4(b)(ii), (iii) or (iv).
(e) Notwithstanding any provision to the contrary in
this Agreement, the Grantee may not exercise its rights
pursuant to this Section 7 in a manner that would result in
the cash payment to the Grantee of an aggregate amount under
this Section 7 of more than $24 million, including the amount,
if any, of the Termination Fee paid to the Grantee pursuant to
Section 9.05 of the Merger Agreement; provided, however, that
nothing in this sentence shall limit the Grantee's ability to
exercise the Option in accordance with its terms.
STOCK OPTION AGREEMENT
-7-
8. Repurchase at the Option of The Company.
(a) Unless the Grantee shall have previously
exercised its rights under Section 7, at the request of the
Company during the six-month period commencing at the
expiration of the Put Period (the "Call Period"), the Company
may repurchase from the Grantee, and the Grantee shall sell to
the Company, all (but not less than all) the shares of Company
Common Stock acquired by the Grantee pursuant hereto and with
respect to which the Grantee has beneficial ownership at the
time of such repurchase at a price per share equal to the
greater of (A) the Current Market Price (as hereinafter
defined) or (B) the Exercise Price per share in respect of the
shares so acquired (such price multiplied by the number of
shares of Company Common Stock to be repurchased pursuant to
this Section 8 being herein called the "Section 8 Repurchase
Consideration"); provided, however, that the Grantee, within
thirty (30) days following the Company's notice of its
intention to purchase shares pursuant to this Section 8, may
deliver an Offeror's Notice pursuant to Section 10, in which
case the provisions of Section 10 and not those of this
Section 8 shall control (unless the sale to a third Person
contemplated thereby is not consummated); and provided,
further, that the Company's rights under this Section 8 shall
be suspended (and the Call Period shall be extended
accordingly) during any period when the exercise of such
rights would subject the Grantee to liability pursuant to
Section 16(b) of the Exchange Act by reason of the issuance of
the Option, any adjustment pursuant to Section 6 hereof, the
Grantee's purchase of shares of Company Common Stock hereunder
or the Grantee's sale of shares pursuant to Section 7, 8 or
10.
(b) If the Company exercises its rights under this
Section 8 and the Grantee does not deliver an Offeror's Notice
or, having delivered an Offeror's Notice, the Grantee does not
sell the shares to a third Person pursuant thereto, the
Company shall, within ten (10) Business Days after the
expiration of the Grantee's rights to deliver an Offeror's
Notice or to sell the shares subject to an Offeror's Notice to
a third Person, pay the Section 8 Repurchase Consideration in
immediately available funds, and the Grantee shall surrender
to the Company certificates evidencing the shares of Company
Common Stock purchased hereunder, and the Grantee shall
warrant to the Company that, immediately prior to the
repurchase thereof pursuant to this Section 8, the Grantee had
sole record and beneficial ownership of such shares and that
such shares were then held free and clear of all Liens.
(c) As used herein, "Current Market Price" means the
average closing sales price per share of Company Common Stock
quoted on the New York Stock Exchange Composite Transactions,
or, if not so quoted, on the New York Stock Exchange (or if
Company Common Stock is not quoted on the New York Stock
Exchange, on The NASDAQ Stock Market or, if the shares of
Company Common Stock are not quoted thereon, on the principal
trading market on which such shares
STOCK OPTION AGREEMENT
-8-
are traded as reported by a recognized source) for the ten
(10) Business Days preceding the date of the Company's request
for repurchase pursuant to this Section 8.
9. Registration Rights. The Company shall, if requested by the
Grantee at any time and from time to time within three years of the
first exercise of the Option (the "Registration Period"), as
expeditiously as practicable prepare, file and cause to be made
effective up to two registration statements under the Securities Act if
such registration is necessary or desirable in order to permit the
offering, sale and delivery of any or all shares of Company Common
Stock or other securities that have been acquired by or are issuable to
the Grantee upon exercise of the Option in accordance with the intended
method of sale or other disposition stated by the Grantee, including,
at the sole discretion of the Company, a "shelf" registration statement
under Rule 415 under the Securities Act or any successor provision, and
the Company shall use all reasonable efforts to qualify such shares or
other securities under any applicable state securities laws. Without
the Grantee's prior written consent, no other securities may be
included in any such registration. The Grantee agrees to use all
reasonable efforts to cause, and to cause any underwriters of any sale
or other disposition to cause, any sale or other disposition pursuant
to such registration statement to be effected on a widely distributed
basis so that upon consummation thereof no purchaser or transferee
shall own beneficially more than 2% of the then outstanding voting
power of the Company. The Company shall use all reasonable efforts to
cause each such registration statement to become effective, to obtain
all consents or waivers of other parties which are required therefor
and to keep such registration statement effective for such period not
in excess of 180 days from the day such registration statement first
becomes effective as may be reasonably necessary to effect such sale or
other disposition. The obligations of the Company hereunder to file a
registration statement and to maintain its effectiveness may be
suspended for one or more periods of time not exceeding sixty (60) days
in the aggregate if the Board of Directors of the Company shall have
determined in good faith that the filing of such registration or the
maintenance of its effectiveness would require disclosure of nonpublic
information that would materially and adversely affect the Company. The
expenses associated with the preparation and filing of any such
registration statement pursuant to this Section 9 and any sale covered
thereby (including any fees related to blue sky qualifications and
filing fees in respect of the National Association of Securities
Dealers, Inc.) ("Registration Expenses") shall be for the account of
the Company except for underwriting discounts or commissions or
brokers' fees in respect to shares to be sold by the Grantee and the
fees and disbursements of the Grantee's counsel; provided, however,
that the Company shall not be required to pay for any Registration
Expenses with respect to such registration if the registration request
is subsequently withdrawn at the request of the Grantee unless the
Grantee agrees to forfeit its right to request one registration;
provided further, however, that, if at the time of such withdrawal the
Grantee has learned of a material adverse change in the results of
operations, condition (financial or other), business or prospects of
the Company from that known to the Grantee at the time of its request
and has withdrawn the request with reasonable promptness following
disclosure by the Company of such
STOCK OPTION AGREEMENT
-9-
material adverse change, then the Grantee shall not be required to pay
any of such expenses and shall retain all remaining rights to request
registration. The Grantee shall provide all information reasonably
requested by the Company for inclusion in any registration statement to
be filed hereunder. If during the Registration Period the Company shall
propose to register under the Securities Act the offering, sale and
delivery of Company Common Stock for cash for its own account or for
any other stockholder of the Company pursuant to a firm underwriting,
it shall, in addition to the Company's other obligations under this
Section 9, allow the Grantee the right to participate in such
registration provided that the Grantee participates in the
underwriting; provided, however, that, if the managing underwriter of
such offering advises the Company in writing that in its opinion the
number of shares of Company Common Stock requested to be included in
such registration exceeds the number which can be sold in such
offering, the Company shall, after fully including therein all
securities to be sold by the Company, include the shares requested to
be included therein by Grantee pro rata (based on the number of shares
intended to be included therein) with the shares intended to be
included therein by Persons other than the Company. In connection with
any offering, sale and delivery of Company Common Stock pursuant to a
registration statement effected pursuant to this Section 9, the Company
and the Grantee shall provide each other and each underwriter of the
offering with customary representations, warranties and covenants,
including covenants of indemnification and contribution. For purposes
of determining whether two requests have been made under this Section
9, only requests relating to a registration statement that has become
effective under the Securities Act and pursuant to which the Grantee
has disposed of all shares covered thereby in the manner contemplated
therein shall be counted.
10. First Refusal. At any time after the first occurrence of
an Exercise Event and prior to the second anniversary of the first
purchase of shares of Company Common Stock pursuant to the Option, if
the Grantee shall desire to sell, assign, transfer or otherwise dispose
of all or any of the shares of Company Common Stock or other securities
acquired by it pursuant to the Option, it shall give the Company
written notice of the proposed transaction (an "Offeror's Notice"),
identifying the proposed transferee, accompanied by a copy of a binding
offer to purchase such shares or other securities signed by such
transferee and setting forth the terms of the proposed transactions. An
Offeror's Notice shall be deemed an offer by the Grantee to the
Company, which may be accepted, in whole but not in part, within ten
(10) Business Days of the receipt of such Offeror's Notice, on the same
terms and conditions and at the same price at which the Grantee is
proposing to transfer such shares or other securities to such
transferee. The purchase of any such shares or other securities by the
Company shall be settled within ten (10) Business Days of the date of
the acceptance of the offer and the purchase price shall be paid to the
Grantee in immediately available funds. In the event of the failure or
refusal of the Company to purchase all the shares or other securities
covered by an Offeror's Notice, the Grantee may, within sixty (60) days
from the date of the Offeror's Notice, sell all, but not less than all,
of such shares or other securities to the proposed transferee at no
less than the price specified and on terms no more favorable than those
set forth in the Offeror's Notice; provided, however, that the
provisions of this
STOCK OPTION AGREEMENT
-10-
sentence shall not limit the rights the Grantee may otherwise have if
the Company has accepted the offer contained in the Offeror's Notice
and wrongfully refuses to purchase the shares or other securities
subject thereto. The requirements of this Section 10 shall not apply to
(a) any disposition as a result of which the proposed transferee would
own beneficially not more than 2% of the outstanding voting power of
the Company, (b) any disposition of Company Common Stock or other
securities by a Person to whom the Grantee has assigned its rights
under the Option with the consent of the Company, (c) any sale by means
of a public offering registered under the Securities Act or (d) any
transfer to a wholly-owned Subsidiary of the Grantee which agrees in
writing to be bound by the terms hereof.
11. Listing. If the Company Common Stock or any other
securities then subject to the Option are then listed on the New York
Stock Exchange, the Company, upon the occurrence of an Exercise Event,
will promptly file an application to list on the New York Stock
Exchange the shares of the Company Common Stock or other securities
then subject to the Option and will use all reasonable efforts to cause
such listing application to be approved as promptly as practicable.
12. Replacement of Agreement. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, the Company
will execute and deliver a new Agreement of like tenor and date. Any
such new Agreement shall constitute an additional contractual
obligation of the Company, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable by
anyone.
13. Miscellaneous.
(a) Expenses. Except as otherwise provided in the
Merger Agreement or in Sections 7, 8 and 9 hereof, each of the
parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this
Agreement may be waived at any time by the party that is
entitled to the benefits of such provision. This Agreement may
not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by
the parties hereto.
(c) Entire Agreement; No Third Party Beneficiary;
Severability. Except as otherwise set forth in the Merger
Agreement, this Agreement (including the Merger Agreement and
the other documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between
the parties with respect to the subject
STOCK OPTION AGREEMENT
-11-
matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies
hereunder. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(d) Governing Law. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of
Texas, regardless of the Laws that might otherwise govern
under applicable principles of conflicts of law; provided,
however, that any matter involving the internal corporate
affairs of any party hereto shall be governed by the
provisions of the GCL.
(e) Descriptive Headings. The descriptive headings
contained herein are for convenience or reference only and
shall not affect in any way the meaning or interpretation of
this Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation) or mailed
by registered or certified mail (return receipt requested) to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to the Company to:
Landmark Graphics Corporation
15150 Memorial Drive
Houston, Texas 77079-4304
Attention: Patti Massaro, General Counsel
and Corporate Secretary
Telecopier No.: (713) 560-1383
with a copy to:
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Robert E. Crawford, Jr.
Telecopier No.: (214) 745-5390
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: David W. Heleniak
Telecopier No.: (212) 848-7179
STOCK OPTION AGREEMENT
-12-
If to Grantee to:
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Attention: Lester L. Coleman, Executive
Vice President and General Counsel
Telecopier No.: (214) 978-2658
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Attention: William E. Joor III, Esq.
Telecopier No.: (713) 615-5282
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which
shall be considered one and the same agreement and shall
become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being
understood that both parties need not execute the same
counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option
shall be assigned by either of the parties hereto (whether by
operation of law or otherwise) without the prior written
consent of the other party, except that the Grantee may assign
this Agreement to a wholly-owned Subsidiary of the Grantee;
provided, however, that no such assignment shall have the
effect of releasing the Grantee from its obligations
hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
(i) Further Assurances. In the event of any exercise
of the Option by the Grantee, the Company and the Grantee
shall execute and deliver all other documents and instruments
and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such
exercise.
(j) Specific Performance. The parties hereto agree
that this Agreement may be enforced by either party through
specific performance, injunctive relief and other equitable
relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with
the obtaining of any such
STOCK OPTION AGREEMENT
-13-
equitable relief and that this provision is without prejudice
to any other rights that the parties hereto may have for any
failure to perform this Agreement.
IN WITNESS WHEREOF, the Company and the Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
LANDMARK GRAPHICS CORPORATION
By:_______________________________
Robert P. Peebler
President, Chief Executive Officer
and Chief Operating Officer
HALLIBURTON COMPANY
By:_______________________________
Lester L. Coleman
Executive Vice President
and General Counsel
VEHOU05:17946.1
STOCK OPTION AGREEMENT
-14-