Settlement Exhibit







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”). 








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.

 




















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.

 







2












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. 

 







3












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.

 







4












(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










5












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

 







6












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

 







7












JANA
PARTNERS LLC

 

By:
/s/Barry
Rosenstein

Name:
Barry Rosenstein

Title:

 





 


8















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.










9















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.




 












10