EXHIBIT 2.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of December 1, 1998 (the "AGREEMENT")
between Exxon Corporation, a New Jersey corporation ("EXXON"), and Mobil
Corporation, a Delaware corporation ("MOBIL").
W I T N E S S E T H :
WHEREAS, Exxon and Mobil are simultaneously with the execution and
delivery of this Agreement entering into an Agreement and Plan of Merger
(the "MERGER AGREEMENT") pursuant to which, among other things, Merger
Subsidiary will merge with and into Mobil on the terms and subject to the
conditions stated therein; and
WHEREAS, in order to induce Exxon to enter into the Merger Agreement,
Mobil has granted to Exxon the Stock Option (as hereinafter defined), on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and in the Merger Agreement, and for other good
and valuable consideration, the adequacy of which is hereby acknowledged,
the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger
Agreement.
Section 2. Grant of Stock Option. Mobil hereby grants to Exxon an
irrevocable option (the "STOCK OPTION") to purchase, on the terms and
subject to the conditions hereof, for $95.96 per share (the "EXERCISE
PRICE") in cash up to 136,500,000 fully paid and non-assessable shares (the
"OPTION SHARES") of Mobil's common stock, $1.00 par value per share (the
"COMMON STOCK"). The Exercise Price and number of Option Shares shall be
subject to adjustment as provided in Section 6 below. Notwithstanding the
foregoing, if at any time that this Stock Option is exercisable pursuant to
the terms and conditions of this Agreement an Acquisition Proposal has
theretofore been made for a per Share value (such value to be determined as
of the close of the market on the trading day immediately prior to the date
of the Stock Exercise Notice or Cash Exercise Notice, as applicable) below
the Exercise Price, then Exxon's Exercise Price as to 1,000 Option Shares
(as such 1,000 shares may be adjusted pursuant to Section 6) will be
adjusted to be 90% of such per Share value (it being understood that such
adjusted Exercise Price will not apply as to any other Option Shares).
Section 3. Exercise of Stock Option. (a) Exxon may, subject to
the provisions of this Section, exercise the Stock Option, in whole or in
part, at any time or from time to time, after the occurrence of a Trigger
Event and prior to the Termination Date. "TERMINATION DATE" shall mean the
earliest of (i) the Effective Time of the Merger, (ii) 90 days after the
date full payment is made by Mobil to Exxon under Section 10.04(b) of the
Merger Agreement or (iii) one day after the date of the termination of the
Merger Agreement so long as, in the case of this clause (iii), no Trigger
Event has occurred or could still occur under Section 10.04(b) of the
Merger Agreement. Subject to the proviso in the last sentence of Section
3(c), notwithstanding the occurrence of the Termination Date, Exxon shall
be entitled to purchase Option Shares pursuant to any exercise of the Stock
Option, on the terms and subject to the conditions hereof, to the extent
Exxon exercised the Stock Option prior to the occurrence of the Termination
Date.
(b) Exxon may purchase Option Shares pursuant to the Stock
Option only if all of the following conditions are satisfied: no
preliminary or permanent injunction or other order issued by any federal or
state court of competent jurisdiction in the United States shall be in
effect prohibiting delivery of the Option Shares, any applicable waiting
period under the HSR Act shall have expired or been terminated, and (iii)
any prior notification to or approval of any other regulatory authority in
the U.S. or elsewhere required in connection with such purchase shall have
been made or obtained other than those which if not made or obtained would
not reasonably be expected to result in a significant detriment to Mobil
and its Subsidiaries, taken as a whole.
(c) If Exxon shall be entitled to and wishes to exercise
the Stock Option, it shall do so by giving Mobil written notice (the "STOCK
EXERCISE NOTICE") to such effect, specifying the number of Option Shares to
be purchased and a place and closing date not earlier than three business
days nor later than 10 business days from the date of such Stock Exercise
Notice. If the closing cannot be consummated on such date because any
condition to the purchase of Option Shares has not been satisfied or as a
result of any restriction arising under any applicable law or regulation,
the closing shall occur five days (or such earlier time as Exxon may
specify) after satisfaction of all such conditions and the cessation of all
such restrictions; provided that in no event shall the closing of the
purchase be postponed by more than nine months after the Termination Date
as a result of this clause (c).
(d) So long as the Stock Option is exercisable pursuant to
the terms of Section 3(a) hereof, Exxon may elect, in lieu of exercising
the Stock Option as provided in Section 3(c) hereof, to send a written
notice to Mobil (the "CASH EXERCISE NOTICE") specifying a date not later
than 20 business days and not earlier than 10 business days following the
date such notice is given on which date Mobil shall pay to Exxon in
exchange for the cancellation of the relevant portion of the Stock Option
an amount in cash equal to the Spread (as hereinafter defined) multiplied
by all or such portion of the Option Shares subject to the Stock Option as
Exxon shall specify. As used herein "SPREAD" shall mean the excess, if
any, over the Exercise Price of the higher of (x) if applicable, the
highest price per share of Common Stock paid or proposed to be paid by any
Person pursuant to any Acquisition Proposal (the "ALTERNATIVE EXERCISE
PRICE") or (y) the average of the closing price of the shares of Common
Stock on the NYSE at the end of the regular session, as reported on the
Consolidated Tape, Network A (the "CLOSING PRICE") for the five consecutive
trading days ending on and including the trading date immediately preceding
the date of the Cash Exercise Notice. If the Alternative Exercise Price
includes any property other than cash, the Alternative Exercise Price shall
be the sum of the fixed cash amount, if any, included in the Alternative
Exercise Price plus the fair market value of such other property. If such
other property consists of securities with an existing public trading
market, the average of the closing prices (or the average of the closing
bid and asked prices if closing prices are unavailable) for such securities
in their principal public trading market on the five trading days ending
five days prior to the date of the Cash Exercise Notice shall be deemed to
equal the fair market value of such property. If such other property
consists of something other than cash or securities with an existing public
trading market and, as of the payment date for the Spread, agreement on the
value of such other property has not been reached, the Alternative Exercise
Price shall be deemed to equal such Closing Price. Upon exercise of its
right pursuant to this Section 3(d) and the receipt by Exxon of the
applicable cash amount with respect to the Option Shares or the applicable
portion thereof, the obligations of Mobil to deliver Option Shares pursuant
to Section 3(e) shall be terminated with respect to the number of Option
Shares for which Exxon shall have elected to be paid the Spread. The
Spread shall be appropriately adjusted, if applicable, to give effect to
Section 6.
(e) At any closing pursuant to Section 3(c) hereof, Exxon
shall make payment to Mobil of the aggregate purchase price for the Option
Shares to be purchased and Mobil shall deliver to Exxon a certificate
representing the purchased Option Shares, registered in the name of Exxon
or its designee and at any closing pursuant to Section 3(d) hereof, Mobil
will deliver to Exxon cash in an amount determined pursuant to Section 3(d)
hereof. Any payment made by Exxon to Mobil, or by Mobil to Exxon, pursuant
to this Agreement shall be made by certified or official bank check or by
wire transfer of federal funds to a bank designated by the party receiving
such funds.
(f) Certificates for Common Stock delivered at the closing
described in Section 3(c) hereof shall be endorsed with a restrictive
legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to resale restrictions arising under the Securities Act of 1933, as
amended."
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such reference (i) if Exxon
shall have delivered to Mobil a copy of a no-action letter from the staff
of the Securities and Exchange Commission, or a written opinion of counsel,
in form and substance reasonably satisfactory to Mobil, to the effect that
such legend is not required for purposes of, or resale may be effected
pursuant to an exemption from registration under, the 1933 Act or (ii) in
connection with any sale registered under the 1933 Act. In addition, such
certificates shall bear any other legend as may be required by applicable
law.
Section 4. Representations and Warranties of Mobil. Mobil hereby
represents and warrants to Exxon as follows:
(a) Mobil is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
execution, delivery and performance by Mobil of this Agreement and the
consummation of the transactions contemplated hereby are within Mobil's
corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official, except for any filings required to
be made under the HSR Act, the EC Merger Regulation, the Canadian Act and
the Exchange Act, do not contravene, or constitute a violation of, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of Mobil or of any judgment, injunction, order or
decree binding upon Mobil or any of its Subsidiaries, do not and will not
constitute a default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of Mobil or any of
its Subsidiaries or to a loss of any benefit to which Mobil or any of its
Subsidiaries is entitled under any provision of any agreement, contract or
other instrument binding upon Mobil or any of its Subsidiaries or any
license, franchise, permit or other similar authorization held by Mobil or
any of its Subsidiaries, and (vi) do not and will not result in the
creation or imposition of any Lien on any asset of Mobil or any of its
Subsidiaries, except for such contraventions, conflicts or violations
referred to in clause (iv) or defaults, rights of termination, cancellation
or acceleration, or losses or Liens referred to in clauses (v) and (vi)
that would not, individually or in the aggregate, have a Material Adverse
Effect on Mobil. This Agreement has been duly executed and delivered by
Mobil and constitutes a valid and binding agreement of Mobil.
(b) Mobil has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof until such time as the obligation to deliver Option Shares upon
the exercise of the Stock Option terminates, will have reserved for
issuance upon any exercise of the Stock Option, the number of Option Shares
subject to the Stock Option (less the number of Option Shares previously
issued upon any partial exercise of the Stock Option). All of the Option
Shares to be issued pursuant to the Stock Option have been duly authorized
and, upon issuance and delivery thereof pursuant to this Agreement, will be
duly authorized, validly issued, fully paid and nonassessable, and shall be
delivered free and clear of all claims, liens, charges, encumbrances and
security interests (other than those created by this Agreement). Option
Shares issued upon exercise of the Stock Option will not be subject to any
preemptive or similar rights. The Board of Directors of Mobil has resolved
to, and Mobil promptly after the execution hereof will, take all necessary
action to render the Company Rights Agreement inapplicable to the grant or
exercise of the Stock Option and the transactions contemplated hereby.
(c) The Board of Directors of Mobil has taken the necessary
action to make inapplicable the application of Section 203 of the Delaware
Law, or any other applicable antitakeover statute or similar statute or
regulation and the supermajority voting provisions of Article 6 of Mobil's
certificate of incorporation to the acquisition of the Option Shares
pursuant to this Agreement.
Section 5. Representations and Warranties of Exxon. Exxon hereby
represents and warrants to Mobil as follows: Exxon is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of New Jersey. The execution, delivery and performance by Exxon of
this Agreement and the consummation of the transactions contemplated hereby
(i) are within Exxon's corporate powers and (ii) have been duly authorized
by all necessary corporate action. The Option Shares acquired by Exxon
upon the exercise of the Stock Options will not be, and the Stock Option is
not being, acquired by Exxon with the intention of making a public
distribution thereof. Neither the Stock Option nor the Option Shares
acquired upon exercise of the Stock Option will be sold or otherwise
disposed of by Exxon except in compliance with the 1933 Act. This
agreement has been duly executed and delivered by Exxon and constitutes a
valid and binding agreement of Exxon.
Section 6. Adjustment upon Changes in Capitalization or Merger.
(a) In the event of any change in the outstanding shares of Common Stock
by reason of a stock dividend, stock split, split-up, merger,
consolidation, recapitalization, combination, conversion, exchange of
shares, extraordinary or liquidating dividend or similar transaction which
would have the effect of diluting Exxon's rights hereunder, the type and
number of shares or securities purchasable upon the exercise of the Stock
Option and the Exercise Price shall be adjusted appropriately, and proper
provision will be made in the agreements governing such transaction, so
that Exxon will receive upon exercise of the Stock Option the number and
class of shares or other securities or property that Exxon would have
received in respect of the Option Shares had the Stock Option been
exercised immediately prior to such event or the record date therefor, as
applicable. In no event shall the number of shares of Common Stock subject
to the Stock Option exceed 14.9% of the number of shares of Common Stock
issued and outstanding at the time of exercise (treating as outstanding for
this purpose the shares subject to the Stock Option).
(b) Without limiting the foregoing, whenever the number of
Option Shares purchasable upon exercise of the Stock Option is adjusted as
provided in this Section 6, the Exercise Price shall be adjusted by
multiplying the Exercise Price by a fraction, the numerator of which is
equal to the number of Option Shares purchasable prior to the adjustment
and the denominator of which is equal to the number of Option Shares
purchasable after the adjustment.
(c) Without limiting the parties' relative rights and
obligations under the Merger Agreement, in the event that Mobil enters into
an agreement to consolidate with or merge into any person, other than
Exxon or one of its subsidiaries, and Mobil will not be the continuing or
surviving corporation in such consolidation or merger, to permit any
person, other than Exxon or one of its subsidiaries, to merge into Mobil
and Mobil will be the continuing or surviving corporation, but in
connection with such merger, the shares of Common Stock outstanding
immediately prior to the consummation of such merger will be changed into
or exchanged for stock or other securities of Mobil or any other person or
cash or any other property, or the shares of Common Stock outstanding
immediately prior to the consummation of such merger will, after such
merger, represent less than 50% of the outstanding voting securities of the
merged company, or to sell or otherwise transfer all or substantially all
of its assets to any person, other than Exxon or one of its subsidiaries,
then, and in each such case, the agreement governing such transaction will
make proper provision so that the Stock Option will, upon the consummation
of any such transaction and upon the terms and conditions set forth herein,
be converted into, or exchanged for, an option with identical terms
appropriately adjusted to acquire the number and class of shares or other
securities or property that Exxon would have received in respect of Option
Shares had the Stock Option been exercised immediately prior to such
consolidation, merger, sale or transfer or the record date therefor, as
applicable, and will make any other necessary adjustments. Mobil shall
take such steps in connection with such consolidation, merger, liquidation
or other such transaction as may be reasonably necessary to assure that the
provisions hereof shall thereafter apply as nearly as possible to any
securities or property thereafter deliverable upon exercise of the Stock
Option.
Section 7. Further Assurances; Remedies. (a) Mobil agrees to
maintain, free from preemptive rights, sufficient authorized but unissued
or treasury shares of Common Stock so that the Stock Option may be fully
exercised without additional authorization of Common Stock after giving
effect to all other options, warrants, convertible securities and other
rights of third parties to purchase shares of Common Stock from Mobil, and
to issue the appropriate number of shares of Common Stock pursuant to the
terms of this Agreement.
(b) Mobil agrees not to avoid or seek to avoid (whether by
charter amendment or through reorganization, consolidation, merger,
issuance of rights, dissolution or sale of assets, or by any other
voluntary act) the observance or performance of any of the covenants,
agreements or conditions to be observed or performed hereunder by Mobil.
(c) Mobil agrees that promptly after the date hereof it
shall take all actions as may from time to time be required (including (i)
complying with all applicable premerger notification, reporting and waiting
period requirements under the HSR Act and (ii) in the event that prior
notification to or approval of any other regulatory authority in the U.S.
or elsewhere is necessary before the Stock Option may be exercised,
cooperating with Exxon in preparing and processing the required notices or
applications) in order to permit Exxon to exercise the Stock Option and
purchase Option Shares pursuant to such exercise and to take all reasonable
action necessary to protect the rights of Exxon against dilution.
(d) The parties agree that Exxon would be irreparably
damaged if for any reason Mobil failed to issue any of the Option Shares
(or other securities or property deliverable pursuant to Section 6 hereof)
upon exercise of the Stock Option or to perform any of its other
obligations under this Agreement, and that Exxon would not have an adequate
remedy at law for money damages in such event. Accordingly, Exxon shall be
entitled to specific performance and injunctive and other equitable relief
to enforce the performance of this Agreement by Mobil. Accordingly, if
Exxon should institute an action or proceeding seeking specific enforcement
of the provisions hereof, Mobil hereby waives the claim or defense that
Exxon has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defense that such a remedy at law
exists. Mobil further agrees to waive any requirements for the securing or
posting of any bond in connection with obtaining any such equitable relief.
This provision is without prejudice to any other rights that Exxon may have
against Mobil for any failure to perform its obligations under this
Agreement.
Section 8. Listing of Option Shares. Promptly after the date
hereof, and from time to time thereafter if necessary, Mobil will apply to
list all of the Option Shares subject to the Stock Option on the New York
Stock Exchange and will use its reasonable best efforts to obtain approval
of such listing as soon as practicable.
Section 9. Registration of the Option Shares. (a) If Exxon
requests Mobil in writing, within two years of the exercise of the Stock
Option, to register under the 1933 Act any of the Option Shares purchased
by Exxon hereunder, Mobil will use its reasonable best efforts to cause the
offering of the Option Shares so specified in such request to be registered
as soon as practicable so as to permit the sale or other distribution by
Exxon of the Option Shares specified in its request (and to keep such
registration in effect for a period of at least 90 days), and in connection
therewith Mobil will prepare and file as promptly as reasonably possible
(but in no event later than 60 days from receipt of Exxon's request) a
registration statement under the 1933 Act to effect such registration on an
appropriate form, which would permit the sale of the Option Shares by Exxon
in accordance with the plan of disposition specified by Exxon in its
request. Mobil shall not be obligated to make effective more than two
registration statements pursuant to the foregoing sentence; provided,
however, that Mobil may postpone the filing of a registration statement
relating to a registration request by Exxon under this Section 9 for a
period of time (not in excess of 90 days) if in Mobil's reasonable, good
faith judgment such filing would require the disclosure of material
information that Mobil has a bonafide business purpose for preserving as
confidential (but in no event shall Mobil exercise such postponement right
more than once in any twelve-month period).
(b) Mobil shall notify Exxon in writing not less than 10
days prior to filing a registration statement under the 1933 Act (other
than a filing on Form S-4 or S-8 or any successor form) with respect to any
Common Stock. If Exxon wishes to have any portion of its Option Shares
included in such registration statement, it shall advise Mobil in writing
to that effect within two business days following receipt of such notice,
and Mobil will thereupon include the number of Option Shares indicated by
Exxon under such Registration Statement; provided that if the managing
underwriter(s) of the offering pursuant to such registration statement
advise Mobil that in their opinion the number of shares of Common Stock
requested to be included in such registration exceeds the number which can
be sold in such offering, Mobil shall only include in such registration
such number or dollar amount of Option Shares which, in the good faith
opinion of the managing underwriter(s), can be sold without materially and
adversely affecting such offering.
(c) All expenses relating to or in connection with any
registration contemplated under this Section 9 and the transactions
contemplated thereby (including all filing, printing, reasonable
professional and other fees and expenses relating thereto) will be at
Mobil's expense except for underwriting discounts or commissions and
brokers' fees. Mobil and Exxon agree to enter into a customary
underwriting agreement with underwriters upon such terms and conditions as
are customarily contained in underwriting agreements with respect to
secondary distributions. Mobil shall indemnify Exxon, its officers,
directors, agents, other controlling persons and any underwriters retained
by Exxon in connection with such sale of such Option Shares in the
customary way, and shall agree to customary contribution provisions with
such persons, with respect to claims, damages, losses and liabilities (and
any expenses relating thereto) arising (or to which Exxon, its officers,
directors, agents, other controlling persons or underwriters may be
subject) in connection with any such offer or sale under the federal
securities laws or otherwise, except for information furnished in writing
by Exxon or its underwriters to Mobil. Exxon and its underwriters,
respectively, shall indemnify Mobil to the same extent with respect to
information furnished in writing to Mobil by Exxon and such underwriters,
respectively.
Section 10. Miscellaneous. (a) Extension of Exercise Periods.
The periods for exercise of certain rights under Sections 2 and 3 hereof
shall be extended in each such case at the request of Exxon to the extent
necessary to avoid liability by Exxon under Section 16(b) of the Exchange
Act by reason of such exercise.
(b) Amendments; Entire Agreement. 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. This
Agreement, together with the Merger Agreement (including any exhibits and
schedules thereto), contains the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements and understandings, oral or written, with
respect to such transactions.
(c) Notices. All notices, requests and other
communications to either party hereunder shall be in writing (including
facsimile or similar writing) and shall be given,
if to Exxon, to:
Charles W. Matthews
Exxon Corporation
5959 Las Colinas Boulevard
Irving, Texas 75039-2298
Facsimile No.: (972) 444-1438
with a copy to:
George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 450-4800
if to Mobil, to:
Samuel H. Gillespie III
Mobil Corporation
3225 Gallows Road
Fairfax, Virginia 22037-0001
Facsimile No.: (703) 846-4674
with a copy to:
Roger S. Aaron
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile No.: (212) 735-2000
or to such other address or facsimile number as either party may hereafter
specify for the purpose by notice to the other party hereto. Each such
notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is
received or (ii) if given by any other means, when delivered at the address
specified in this Section.
(d) Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement, except as otherwise
specifically provided herein and without limiting anything contained in the
Merger Agreement.
(e) Severability. If any term, provision, covenant or
restriction of this Agreement is held 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.
(f) Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of law. Any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby may be brought in any federal or state
court located in the State of Delaware, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) 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. 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 such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10(c)
hereof shall be deemed effective service of process on such party.
(g) Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
(i) Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
(j) Assignment. This Agreement shall be binding upon each
party hereto and such party's successors and assigns. This Agreement shall
not be assignable by Mobil, but may be assigned by Exxon in whole or in
part to any direct or indirect wholly-owned subsidiary of Exxon, provided
that Exxon shall remain liable for any obligations so assigned.
(k) Survival. All representations, warranties and
covenants contained herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
(l) Time of the Essence. The parties agree that time shall
be of the essence in the performance of obligations hereunder.
(m) Public Announcement. Exxon and Mobil will consult with
each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and
shall not issue any such press release or make any such public statement
without the prior consent of the other party, which shall not be
unreasonably withheld. Notwithstanding the foregoing, any such press
release or public statement as may be required by applicable law or any
listing agreement with any national securities exchange, may be issued
prior to such consultation, if the party making such release or statement
has used its reasonable efforts to consult with the other party.
Section 11. Profit Limitation. (a) Notwithstanding any other
provision of this Agreement or the Merger Agreement, in no event shall
Exxon's Total Profit (as defined below) exceed $2,000,000,000 (the "MAXIMUM
AMOUNT") and, if it otherwise would exceed such Maximum Amount, Exxon at
its sole election may pay cash to Mobil, deliver to Mobil for cancellation
Option Shares previously purchased by Exxon, or any combination thereof,
so that Exxon's actually realized Total Profit (as defined below) shall not
exceed the Maximum Amount after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement,
the Stock Option may not be exercised for a number of Option Shares as
would, as of the date of the Stock Exercise Notice, result in a Notional
Total Profit (as defined below) of more than the Maximum Amount and, if
exercise of the Stock Option otherwise would result in the Notional Total
Profit exceeding such amount, Exxon, at its discretion, may (in addition to
any of the actions specified in Section 11(a) above) increase the Exercise
Price for that number of Option Shares set forth in the Stock Exercise
Notice so that the Notional Total Profit shall not exceed the Maximum
Amount; provided, that nothing in this sentence shall restrict any exercise
of the Stock Option permitted hereby on any subsequent date at the Exercise
Price set forth in Section 2 hereof.
(c) As used herein, the term "TOTAL PROFIT" shall mean the
aggregate amount (before taxes) of the following: the cash amount actually
received by Exxon pursuant to Section 10.04(b) of the Merger Agreement less
any repayment by Exxon to Mobil pursuant to Section 11(a)(i) hereof, (x)
the net cash amounts or the fair market value of any property received by
Exxon pursuant to the sale of Option Shares (or of any other securities
into or for which such Option Shares are converted or exchanged), less (y)
Exxon's purchase price for such Option Shares (or other securities) plus
the aggregate amounts received by Exxon pursuant to Section 3(d).
(d) As used herein, the term "NOTIONAL TOTAL PROFIT" with
respect to any number of Option Shares as to which Exxon may propose to
exercise the Stock Option shall be the Total Profit determined as of the
date of the Stock Exercise Notice assuming that the Stock Option was
exercised on such date for such number of Option Shares and assuming that
such Option Shares, together with all other Option Shares previously
acquired upon exercise of the Stock Option and held by Exxon and its
affiliates as of such date, were sold for cash at the Closing Price on the
preceding trading day (less customary brokerage commissions).
IN WITNESS WHEREOF, Mobil and Exxon have caused this Agreement to be
duly executed as of the day and year first above written.
MOBIL CORPORATION
By: /s/ Lucio A. Noto
-----------------------------
Name: Lucio A. Noto
Title: Chairman and Chief
Executive Officer
EXXON CORPORATION
By: /s/ Lee R. Raymond
----------------------------
Name: Lee R. Raymond
Title: Chairman of the Board