Exhibit (d)(2)
SHARE PURCHASE OPTION AND
BUSINESS OPPORTUNITIES AGREEMENT
SHARE PURCHASE OPTION AND BUSINESS OPPORTUNITIES AGREEMENT ("Agreement"),
dated as of May 19, 1994, by and between ATLANTIC RICHFIELD COMPANY, a Delaware
corporation ("ARCO"), 515 South Flower Street, Los Angeles, California 90071 and
VASTAR RESOURCES, INC., a Delaware corporation ("VASTAR"), 15375 Memorial Drive,
Houston, Texas 77079.
Recitals
--------
WHEREAS, in October 1993, ARCO transferred to ARCO Southwest, Inc., a
Delaware corporation which is now named VASTAR, properties and related rights
and liabilities comprising the principal businesses of ARCO Oil and Gas
Company's AOGC Eastern District, Western District Mid-Continent Business Unit
and certain other properties and interests;
WHEREAS, VASTAR has issued to ARCO all of the shares of its issued and
outstanding Common Stock (the "Common Stock");
WHEREAS, VASTAR is investigating a possible public offering of a portion
of its Common Stock;
WHEREAS, ARCO is the common parent of an affiliated group of corporations,
which includes VASTAR and its subsidiaries, and files a consolidated federal
income tax return for such affiliated group (the "Consolidated Return");
WHEREAS, ARCO desires the right, but not the obligation, to maintain
ownership of a sufficient percentage of VASTAR's securities to allow VASTAR and
its subsidiaries to be included in the Consolidated Return; and
WHEREAS, ARCO and VASTAR have entered into a Tax Sharing Agreement, dated
effective as of October 1, 1993, that allows, among other things, VASTAR to use
credits under Section 29 and 43 of the Internal Revenue Code which might not be
available on a current basis to VASTAR and its subsidiaries if they were not
included in the Consolidated Return.
NOW, THEREFORE, in connection with ARCO's beneficial ownership of VASTAR's
Common Stock, and in consideration of the foregoing, the mutual promises
contained herein and other valuable consideration the receipt and sufficiency of
which are hereby acknowledged, ARCO and VASTAR hereby agree as follows:
1. Purchase of Shares. As principal shareholder of VASTAR, ARCO is
------------------
granted the cumulative, continuing right, but without any obligation, to
purchase from VASTAR such number of shares of VASTAR Common Stock and/or
preferred stock, if such shall be issued and outstanding, as ARCO may determine
in its sole judgment to be appropriate to ensure that ARCO may continue to
include VASTAR and its subsidiaries in the Consolidated Return (in accordance
with Section 1504 of the Internal Revenue Code of 1986, as amended from time to
time, or any successor or additional section dealing with the inclusion of an
entity within an affiliated group for purposes of filing a consolidated return)
regardless of whether the need for such purchase of shares of Common Stock or
preferred stock arises in conjunction with the issuance of Common Stock or
preferred stock by VASTAR, arises by circumstances affecting the voting rights,
value or other attributes of preferred stock, if any, which may have been issued
by VASTAR, arises in conjunction with the issuance by VASTAR of options to
acquire Common Stock or preferred stock of VASTAR, or otherwise arises.
2. Option Notice. VASTAR shall notify ARCO in writing of any plans it
-------------
has to issue additional shares of Common Stock, shares of preferred stock or
options to acquire shares of Common Stock or preferred stock of VASTAR twenty
days before the issuance of such shares or options, as the case may be (the
"Option Notice").
3. Option Exercise and Price. ARCO may, at any time after receipt by it
-------------------------
of an Option Notice or at any time that circumstances may arise whereby ARCO
determines in its sole judgment that it would be appropriate to purchase
additional shares of Common Stock or preferred stock to ensure ARCO's ability to
continue to include VASTAR and its subsidiaries in the Consolidated Return,
exercise its option granted hereby by delivering to VASTAR (i) a written notice
to such effect specifying the number of shares of Common Stock and/or preferred
stock of VASTAR that ARCO has determined to purchase and (ii) the purchase price
for such shares, which shall be the closing price on the last preceding business
day prior to the payment of the purchase price at which such Common Stock or
preferred stock was traded on the New York Stock Exchange, as published in the
Wall Street Journal, or if the Common Stock or preferred stock was not traded on
- -------------------
the New York Stock Exchange then the closing price at which such Common Stock or
preferred stock was traded on such day on such other exchange or recognized
trading system, such as the NASDAQ, as published in the Wall Street Journal, and
-------------------
if the Common Stock or preferred stock was not traded on any exchange or
recognized trading system, then the fair market value of the preferred stock on
such day.
VASTAR will take all corporate action required in order to permit ARCO to
exercise its continuing right pursuant to Section 1, including any and all
actions required by the Board of Directors to cause an amendment or amendments
to VASTAR's Certificate of Incorporation increasing the number of authorized but
unissued shares of
2
Common Stock or preferred stock to the number required to permit the exercise of
such right and, in the event that any such amendment is required, VASTAR shall
not issue the shares or options, as the case may be, that gave rise to ARCO's
right to exercise its option, prior to the approval by the stockholders, and the
effectiveness, of any such amendment and the issuance to ARCO of the shares to
be purchased by ARCO pursuant to its written notice exercising its option.
To the extent that ARCO exercises its option hereunder prior to the date
of issuance indicated in VASTAR's Option Notice, VASTAR shall issue the shares
purchased by ARCO on or before the time when VASTAR issues the shares or the
options, as the case may be, which gave rise to ARCO's right to exercise its
option.
4. Allocation of Certain Business Opportunities between VASTAR and ARCO.
--------------------------------------------------------------------
VASTAR and ARCO further agree that business opportunities which come to the
attention of any officer or director of either company shall be allocated
between such companies as follows:
When an opportunity is offered to an officer and/or director of VASTAR who
is also an officer and/or director of ARCO in writing, solely in his or her
designated capacity with one of the two companies, such opportunity shall belong
to whichever company was so designated. Otherwise, a business opportunity first
offered (i) to any person who is an officer or officer and director of VASTAR,
and who is also a director of ARCO shall belong to VASTAR, (ii) to a person who
is a director of VASTAR and who is also an officer and/or director of ARCO shall
belong to ARCO, (iii) to any person who is an officer, but not a director, of
both VASTAR and ARCO shall belong to ARCO, (iv) to any person who is an officer
and director of both VASTAR and ARCO shall belong to ARCO, and (v) to any person
who is an officer or an officer and director of VASTAR and who is also an
officer or an officer and director of ARCO shall belong to ARCO. In the case of
any business opportunity not specifically allocated by the foregoing (whether
because of the means by which it arose or was published, or otherwise), any such
business opportunity may be pursued by either VASTAR or ARCO. The party to
which a business opportunity is allocated pursuant to this Agreement shall have
the right to provide the same to any of its subsidiaries or affiliates or other
entities under its control. A party may pursue a business opportunity allocated
hereunder to the other party if the Vice President - Planning of such other
party advises that such other party (and its subsidiaries and controlled
entities) has no interest in pursuing such business opportunity.
5. Notices. All notices and communications required or permitted under
-------
this Agreement shall be in writing and any communication or delivery hereunder
shall be deemed to have been duly made if actually delivered in person or by
facsimile, or if
3
mailed by first class or certified mail, postage prepaid, or by air express
service, with charges prepaid, addressed as follows:
If to ARCO:
----------
Atlantic Richfield Company
515 South Flower Street
Los Angeles, California 90071
Attention: Senior Vice President and
General Counsel
If to VASTAR:
------------
Vastar Resources, Inc.
15375 Memorial Drive
Houston, Texas 77079
Attention: General Counsel
6. Further Assurances. ARCO and VASTAR shall execute, acknowledge and
------------------
deliver, or cause to be executed, acknowledged and delivered, such instruments
and take such other action as may be necessary or advisable to carry out their
obligations under this Agreement and under any exhibit, document or other
instrument delivered pursuant hereto.
7. Amendment. This Agreement may not be altered or amended, nor any
---------
rights hereunder be waived, except by an instrument in writing executed by the
party or parties to be charged with such amendment or waiver. No waiver of any
term, provision or condition of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, provision or condition or a waiver of any other term, provision or
condition of this Agreement.
8. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same agreement.
9. Governing Law; Consent to Jurisdiction. This Agreement and the
--------------------------------------
transactions contemplated hereby shall be construed and enforced in accordance
with, and governed by, the laws of the State of Delaware. VASTAR and ARCO agree
that all disputes of whatever kind (including without limitation actions in the
right of either corporation including so-called derivative actions) arising
under or relating in any way to the subject matter of this Agreement shall be
submitted to and decided by the State courts situated in the County of New
Castle, State of Delaware, and hereby submit themselves to the exclusive
jurisdiction of, and venue before, such courts for the
4
determination of all such disputes. Service of process in any such proceeding
may be made upon the Delaware resident agent representing each of ARCO and
VASTAR, The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware
19801 or any successor Delaware resident agent representing either ARCO or
VASTAR.
10. Entire Agreement. This Agreement constitutes the entire understanding
----------------
of the parties hereto with respect to the subject matter hereof.
11. Successors. This Agreement shall be binding upon, and shall inure to
----------
the benefit of, the parties hereto and their respective successors and assigns.
Nothing contained in this Agreement, express or implied, is intended to confer
upon any other person or entity any benefits, rights or remedies.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATLANTIC RICHFIELD COMPANY
By: /s/ TERRY G. DALLAS
-------------------
Title: Vice President & Treasurer
--------------------------
VASTAR RESOURCES, INC.
By: /s/ STEVEN J. SHAPIRO
---------------------
Title: Senior Vice President
---------------------
357324
5