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Exhibit 10.1
 
Execution Copy

Agreement, dated April 13, 2005, between Kerr-McGee Corporation, a Delaware
corporation (the “Company”), the parties listed on the signature pages of this
agreement as Icahn Parties (each, an “Icahn Party” and, collectively, the “Icahn
Parties”), and the parties listed on the signature pages of this agreement as
Jana Parties (each, a “JANA Party” and, collectively, the “JANA Parties”). 

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The Icahn Parties and the JANA Parties have filed preliminary proxy materials
for use in connection with the Company’s 2005 Annual Meeting of Stockholders
(collectively, the “Proxy Materials”) with the Securities and Exchange
Commission (the “SEC”), and each of the Icahn Parties and the JANA Parties has
agreed to immediately suspend their solicitation of proxies in connection with
such Annual Meeting and, upon the Company’s acceptance of shares for payment
(the “Tender Acceptance”) in the Tender Offer (defined below), to terminate such
solicitation and to withdraw their slate of nominees to the Company’s board of
directors. For the purpose of this Agreement, the filing of amendments to a
proxy statement and the filing of other proxy materials with the SEC intended to
be responsive to comments from the SEC do not constitute the solicitation of
proxies, all in a manner not inconsistent with the terms of this Agreement.
 
The Company plans to announce a self tender offer to acquire between $3.96
billion and $4.0 billion in purchase price of its common stock in a modified
“Dutch” auction with a price range of $85 to $92 per share, subject to receipt
of satisfactory financing pursuant to an existing bank commitment and other
customary conditions for issuer self tender offers (the “Tender Offer”).
 
In consideration of the mutual promises, covenants and agreements contained
herein, the parties agree as follows:
 
1. Each of the Icahn Parties and the JANA Parties, as applicable, hereby suspend
their solicitation of proxies in connection with the Company’s 2005 Annual
Meeting of Stockholders until the earlier of (1) May 25, 2005, (2) April 29,
2005 if the Company has not commenced the Tender Offer by such date and (3) the
date, if any, on which the Tender Offer is terminated or abandoned or the terms
of which are amended in any material respect (other than an amendment to
increase the aggregate number of shares to be purchased in the Tender Offer)
(such earlier date, the “Solicitation Date”), after which the Icahn Parties and
the JANA Parties may at their election commence such solicitation in accordance
with terms of this Agreement. After the Tender Acceptance, each of the Icahn
Parties and the JANA Parties agrees to withdraw its notice of intent to nominate
persons for election as directors of the Company at the Company’s 2005 Annual
Meeting of Stockholders, dated March 2, 2005, pursuant to Article III, Section
10 of the Company’s By-Laws, and shall take all steps necessary to cease, and to
cause all Affiliates (as defined in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) immediately to cease, all efforts to
nominate or elect directors to the board of directors of the Company. After the
Tender Acceptance, each of the Icahn Parties and the JANA Parties further agrees
to vote for, and to cause all Affiliates to vote for, the Company’s nominees for
election at the 2005 Annual Meeting of Stockholders.
 

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2. Each of the Icahn Parties and the JANA Parties agrees that, for a period from
the date of this Agreement through and including May 10, 2008 (the “Restricted
Period”), unless specifically invited in writing by the Company and unless a
majority of the Continuing Directors (as defined below) has given its approval
to such invitation, no such party will, nor will any such party permit any of
its Affiliates to, nor will any such party cause any other person to, in any
manner, directly or indirectly:
 
(a) make, or propose (publicly or otherwise), any tender or exchange offer,
merger or other transaction involving the Company or any Company Affiliate or
propose that the Company or any Company Affiliate engage in or enter into any
transaction or similar activity,
 
(b) make or propose (publicly or otherwise) any proxy solicitation or
solicitation of consents to vote any voting securities of the Company;
 
(c) form, join or in any way participate in a “group” (as defined under the
Exchange Act) in connection with any of the actions set forth in clause (a);
 
(d) otherwise act, alone or in concert with others (including, without
limitation, any holder of securities or other interests in the Company or any of
its subsidiaries), to seek representation on the board of directors of the
Company or any of its subsidiaries or to seek to control or influence the
management, board of directors or policies of the Company or any of its
subsidiaries or to take any of the actions described in clause (a);
 
(e) initiate, propose or otherwise solicit stockholders for the approval of any
stockholder proposal (as described in Rule 14a-8 under the Exchange Act or
otherwise) with respect to the Company; or
 
(f) encourage, assist or advise any third party or entity (including, without
limitation, any holder of securities or other interests in the Company) with
respect to any of the matters specified in this Section 2, or enter into any
arrangements to so do.
 
Each of the Icahn Parties and the JANA Parties also agrees during the Restricted
Period not to request that the Company (or its directors, officers, employees or
agents), directly or indirectly, amend or waive any provision of this Section
(including this sentence), or permit any of its Affiliates to so request. For
purposes of this agreement: (1) “Continuing Directors” means, as of any date of
determination, any member of the board of directors of the Company who (A) was a
member of such board of directors on the date hereof or (B) was nominated for
election or elected to such board of directors with the approval of a majority
of the Continuing Directors who were members of such board of directors at the
time of such nomination or election; (2) “person” shall be broadly interpreted
to include the media and any corporation, partnership, group, individual or
other entity; and (3) references to “the Company” include any successor to the
Company and any subsidiaries of the Company. Notwithstanding the foregoing, (x)
in the event the Tender Acceptance has not occurred on or before the
Solicitation Date, the provisions of this Section 2 shall be suspended with
respect to the Icahn Parties and the JANA Parties until such time as the Tender
Acceptance shall occur, and the provisions of this Section 2 shall terminate if
the Tender Acceptance has not occurred on or before June 23, 2005, (y) the
limitation set forth in Section 2(c) shall not apply with respect to any Icahn
Party and its Affiliates constituting a “group” with any other Icahn Party or
Icahn Party Affiliate and (z) the limitations set forth in Section 2(c) shall
not apply with respect to any JANA Party and its Affiliates constituting a
“group,” with any other JANA Party or JANA Party Affiliate.
 
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3. (a) The Company agrees to commence the Tender Offer on or before April 29,
2005.  
 
(b) The Company agrees that, while all other business may be brought before such
Annual Meeting, it will cause its 2005 Annual Meeting of Stockholders to be
adjourned on May 10, 2005 before the nominations or elections of directors to a
date no earlier than June 7, 2005 and no later than June 9, 2005 for the purpose
of nominating and electing directors. Provided that the Tender Acceptance has
not occurred and, in the event the Icahn Parties and the JANA Parties notify the
Company on or before June 5, 2005, of their desire to further adjourn the
meeting, the Company will cause the meeting to be further adjourned until a date
no earlier than June 21, 2005 and no later than June 23, 2005.
 
(c) The Icahn Parties and the JANA Parties agree not to object to an amendment
to the Company’s By-Laws expressly granting the Chairman the authority to
adjourn any meeting of stockholders. The Company agrees not to object to the
Icahn Parties’ notice of nominations as invalid under the Company’s By-Laws or
on the basis of claims asserted in the Action.
 
(d) Each of the Icahn Parties and the JANA Parties agrees not to comment or
otherwise disclose publicly their plans and intentions as to whether to tender
shares into the Tender Offer (other than a disclosure that such party intends to
tender all shares then beneficially owned by such Party).
 
4. Immediately after this Agreement is executed, the Company will inform the
Court having jurisdiction over the Action of the fact of this settlement, and
thereafter will take all steps necessary to dismiss the Action, with prejudice.
 
5. The Company agrees to issue a press release in the form attached as Exhibit
A. Each of the Icahn Parties and the JANA Parties agree to issue a press release
in the form attached as Exhibit B promptly after the issuance of the Company
release. The press releases will be issued at or before 9:00 a.m. (EDT) on
Thursday, April 14, 2005. Prior to May 25, 2005, and at all times after the
Tender Acceptance, the Company and each of the Icahn Parties and the JANA
Parties further agree not to make any statements inconsistent with their
respective press releases.
 
6. Each party to this Agreement acknowledges and agrees that money damages would
not be sufficient for any breach of this Agreement by such party or any
Affiliate of such party, and that the other party or parties to this Agreement
shall be entitled to equitable relief, including injunction and specific
performance as a remedy for such breach. Such remedies shall not be deemed to be
exclusive remedies for such a breach, but shall be in addition to all other
remedies available in law or equity.
 
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7. (a)  Effective upon the Tender Acceptance, each of the Icahn Parties, on
behalf of itself and each of its direct and indirect subsidiaries, affiliates,
predecessors, successors and assigns, and each of such party’s participants in
the Proxy Contest (as defined below), and each of the past and present
principals, partners, officers and directors of any of them, individually and
collectively (each such Party an “Icahn Person” and, collectively, the “Icahn
Persons”), hereby releases, acquits, and forever discharges the Company, and
each of its direct and indirect subsidiaries, parents, affiliates, predecessors,
successors and assigns, and each of the Company’s participants in the Proxy
Contest, and each of the past and present principals, officers, directors,
employees and attorneys of any of them, from and with respect to any and all
claims, counterclaims, actions, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, covenants, contracts, agreements, promises,
damages, judgments, obligations, controversies, costs, expenses, attorneys’
fees, liens, security interests, demands, assertions, cross claims, disputes,
indebtedness, executions of any nature, and liabilities whatsoever possible,
whether at law or in equity, statutory or otherwise, whether known or unknown,
asserted or unasserted, of every kind and nature whatsoever, that any Icahn
Person ever had, now has, or hereafter can, shall, or may have against any
Company Party (as defined below) for, upon, or by reason of any matter, cause of
action, or thing, whatsoever from the beginning of the world to the date of the
Tender Acceptance, asserted in or arising out of or in connection with the Proxy
Contest, the Nominations or the Action (each as defined below), but expressly
excluding (among other claims) any claim for breach of or to enforce this
Agreement.
 
(b) Effective upon the Tender Acceptance, each of the JANA Parties, on behalf of
itself and each of its direct and indirect subsidiaries, affiliates,
predecessors, successors and assigns, and each of such party’s participants in
the Proxy Contest (as defined below), and each of the past and present
principals, partners, officers and directors of any of them, individually and
collectively (each such Party a “JANA Person” and, collectively, the “JANA
Persons”), hereby releases, acquits, and forever discharges the Company, and
each of its direct and indirect subsidiaries, parents, affiliates, predecessors,
successors and assigns, and each of the Company’s nominees and participants in
the Proxy Contest, and each of the past and present principals, officers,
directors, employees and attorneys of any of them, from and with respect to any
and all claims, counterclaims, actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, covenants, contracts, agreements, promises,
damages, judgments, obligations, controversies, costs, expenses, attorneys’
fees, liens, security interests, demands, assertions, cross claims, disputes,
indebtedness, executions of any nature, and liabilities whatsoever possible,
whether at law or in equity, statutory or otherwise, whether known or unknown,
asserted or unasserted, of every kind and nature whatsoever, that any JANA
Person ever had, now has, or hereafter can, shall, or may have against any
Company Party for, upon, or by reason of any matter, cause of action, or thing,
whatsoever from the beginning of the world to the date of the Tender Acceptance,
asserted in or arising out of or in connection with the Proxy Contest, the
Nominations or the Action, but expressly excluding (among other claims) any
claim for breach of or to enforce this Agreement.
 
(c) Effective upon the Tender Acceptance, the Company, on behalf of itself and
each of its direct and indirect subsidiaries, affiliates, predecessors,
successors and assigns, and each of the Company’s nominees and participants in
the Proxy Contest, and each of the past and present principals, officers and
directors of any of them, individually and collectively (each such Party a
“Company Party” and, collectively, the “Company Parties”), hereby releases,
acquits, and forever discharges each Icahn Party and each JANA Party and each of
its direct and indirect subsidiaries, parents, partners, affiliates,
predecessors, successors and assigns, and each of such party’s nominees and
participants in the Proxy Contest, and each of the past and present principals,
officers, directors, partners, employees and attorneys of any of them, from and
with respect to any and all claims, counterclaims, actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, covenants, contracts,
agreements, promises, damages, judgments, obligations, controversies, costs,
expenses, attorneys’ fees, liens, security interests, demands, assertions, cross
claims, disputes, indebtedness, executions of any nature, and liabilities
whatsoever possible, whether at law or in equity, statutory or otherwise,
whether known or unknown, asserted or unasserted, of every kind and nature
whatsoever, that any Company Party ever had, now has, or hereafter can, shall,
or may have against any Icahn Person or JANA Person for, upon, or by reason of
any matter, cause of action, or thing, whatsoever from the beginning of the
world to the date of the Tender Acceptance, asserted in or arising out of or in
connection with the Proxy Contest, the Nominations or the Action (each as
defined below), but expressly excluding (among other claims) any claim for
breach of or to enforce this Agreement.
 
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(d) “Proxy Contest” means the actions, omissions, solicitations, filings,
allegations, campaign, and events that were part of, arose from, or were in
connection with the solicitations of proxies by the Stockholders and the
participants named in the related proxy material and statements around the
Company’s 2005 Annual Meeting of Stockholders.
 
(e) The “Action” means the action captioned in Kerr-McGee Corporation vs. (1)
Carl C. Icahn, (2) Barberry Corporation, (3) Hopper Investments, LLC, (4) High
River Limited Partnership, (5) Icahn Partners Master Fund LP, (6) Icahn Offshore
LP, (7) CCI Offshore LLC, (8) Icahn Partners LP, (9) Icahn Onshore LP, (10) CCI
Onshore LLC, (11) Jana Partners LLC, (12) Barry Rosenstein, and (13) Gary Claar,
Civil Action No. CV-05-276-F, in the United States District Court for the
Western District of Oklahoma.
 
(f) “Nominations” means the Icahn Parties’ nominations of Carl C. Icahn and
Barry Rosenstein to become members of the Board of Directors of the Company, the
Company’s response to these nominations, and all related acts taken by the
Stockholders or the Company in relation thereto.
 
8. Any representation, warranty, promise, covenant, agreement or obligation of
the Icahn Parties, on the one hand, and the JANA Parties, on the other hand, are
several and not joint.
 
9. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same agreement.
 
10. This Agreement is governed by the laws of the State of New York without
giving effect to its conflicts of laws principles or rules.
 
The parties have duly executed this agreement.
 
 
KERR-MCGEE CORPORATION
 
By: /s/ Gregory F. Pilcher 
Name: Gregory F. Pilcher
Title: Senior Vice President, General
Counsel and Secretary

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ICAHN PARTIES:
 
By: /s/Carl C. Icahn

CARL C. ICAHN

BARBERRY CORPORATION
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
HOPPER INVESTMENTS, LLC
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory

HIGH RIVER LIMITED PARTNERSHIP
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
ICAHN PARTNERS MASTER FUND LP
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
ICAHN OFFSHORE LP
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
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CCI OFFSHORE LLC
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
ICAHN PARTNERS LP
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
ICAHN ONSHORE LP
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
CCI ONSHORE LLC
 
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory
 
JANA PARTIES:
 
 
/s/Barry Rosenstein
 
 
BARRY ROSENSTEIN
 
/s/Gary Claar

GARY CLAAR
 
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JANA PARTNERS LLC
 
By: /s/Barry Rosenstein
Name: Barry Rosenstein
Title:
 

 
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Exhibit A
 

 
KERR-MCGEE REACHES SETTLEMENT WITH
 
ICAHN GROUP AND JANA PARTNERS
 
 
Company Withdraws Litigation and Announces that Icahn and JANA
Will Withdraw Board Nominees Pending Completion of
Announced Share Repurchase Program

Oklahoma City, April 14, 2005 - Kerr-McGee Corp. (NYSE: KMG) announced
today that it has entered into a settlement with Mr. Carl Icahn, certain
affiliated funds and JANA Partners LLC. As a result, the company will dismiss
its complaint with prejudice filed March 10, 2005, in the United States District
Court for the Western District of Oklahoma.
Kerr-McGee also announced that based on the company’s recent actions to enhance
stockholder value, including the previously announced separation of its chemical
business and recently announced $4 billion share repurchase program in the form
of a modified “Dutch Auction” tender offer, it has received written notice from
the Icahn Group and JANA Partners confirming that they will immediately cease
proxy solicitation activities. The Icahn Group and JANA Partners will withdraw
their alternate board nominees from consideration for election to the board of
directors of Kerr-McGee on successful completion of Kerr-McGee’s repurchase
program. Kerr-McGee has every expectation that it will complete the repurchase
program by mid-May, 2005.
    “This settlement enables the company to deliver on its commitment to deliver
stockholder value and to advance its strategy as a pure-play exploration and
production company,” said Luke R. Corbett, Kerr-McGee chairman and chief
executive officer. “Our conversations with Mr. Icahn and JANA have been
productive.”
Kerr-McGee is an Oklahoma City-based energy and inorganic chemical company with
worldwide operations and assets of more than $14 billion. For more information
visit the company's website at www.kerr-mcgee.com.

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Exibit B
 

 

ICAHN GROUP & JANA PARTNERS COMMEND KERR-MCGEE FOR AGREEING TO TAKE STEPS TO
ENHANCE SHAREHOLDER VALUE
 

 
New York, April 14, 2005 - Carl Icahn and Barry Rosenstein today announced that
they commend Kerr-McGee’s management and its Board of Directors for engaging in
productive discussions with us and other shareholders, and agreeing to take
steps to enhance shareholder value. They stated that “we believe that the steps
that Kerr-McGee has undertaken will prove beneficial to all its shareholders.”

Messrs. Icahn and Rosenstein indicated that they were suspending their proxy
contest for seats on the Board of Directors of the Kerr-McGee pending the
commencement and successful completion of the tender offer for shares of its
common stock which Kerr-McGee plans to commence shortly. When the tender offer
is successfully completed, the proxy contest will be terminated said Messrs.
Icahn and Rosenstein.

 

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