0000950129-01-503732.txt : 20011106 0000950129-01-503732.hdr.sgml : 20011106 ACCESSION NUMBER: 0000950129-01-503732 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20011101 GROUP MEMBERS: CYNTHIA WOODS MITCHELL GROUP MEMBERS: MND PARTNERS, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MITCHELL ENERGY & DEVELOPMENT CORP CENTRAL INDEX KEY: 0000311995 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 741032912 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-13806 FILM NUMBER: 1773249 BUSINESS ADDRESS: STREET 1: 2001 TIMBERLOCH PL CITY: THE WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 7133775500 MAIL ADDRESS: STREET 1: P.O. BOX 4000 CITY: THE WOODLANDS STATE: TX ZIP: 77387-4000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MITCHELL GEORGE P CENTRAL INDEX KEY: 0001113223 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O GPM INC STREET 2: 2002 TIMBERLOCH - STE 260 CITY: WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 7133775500 MAIL ADDRESS: STREET 1: C/O GPM INC STREET 2: 2002 TIMBERLOCH - STE 260 CITY: WOODLANDS STATE: TX ZIP: 77380 SC 13D/A 1 h91706sc13da.txt GEORGE P. MITCHELL FOR MITCHELL ENERGY & DEV. CORP UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Amendment No. 5) UNDER THE SECURITIES EXCHANGE ACT OF 1934 MITCHELL ENERGY & DEVELOPMENT CORP. (Name of Issuer) CLASS A COMMON STOCK, $.10 PAR VALUE (Title of Class of Securities) 606592 20 2 ----------- (CUSIP Number) Spiros N. Vassilakis GPM, Inc. and Affiliates 2002 Timberloch Place, Suite 260 The Woodlands, Texas 77380 (713) 377-5609 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 17, 2001 (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D ----------------------- CUSIP NO.: 606592 20 2 ----------------------- -------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR IRS IDENTIFICATION NUMBER George P. Mitchell Social Security Number ###-##-#### -------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] -------------- ----------------------------------------------------------------- 3 SEC USE ONLY -------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS OO -------------- ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] -------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States -------------- ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 21,758,205 shares SHARES ---------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 1,022,506 shares OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 21,758,205 shares PERSON ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 1,022,506 shares -------------- ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 22,780,711 shares, includes 1,022,506 shares as to which beneficial ownership is disclaimed -------------- ----------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] -------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 45.0% -------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN -------------- ----------------------------------------------------------------- SCHEDULE 13D ----------------------- CUSIP NO.: 606592 20 2 ----------------------- -------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR IRS IDENTIFICATION NUMBER Cynthia Woods Mitchell Social Security Number ###-##-#### -------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] -------------- ----------------------------------------------------------------- 3 SEC USE ONLY -------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS OO -------------- ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] -------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States -------------- ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ---------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 1,022,506 shares OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 1,022,506 shares -------------- ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,022,506 shares -------------- ----------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] -------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.0% -------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN -------------- ----------------------------------------------------------------- SCHEDULE 13D ----------------------- CUSIP NO.: 606592 20 2 ----------------------- -------------- ----------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR IRS IDENTIFICATION NUMBER MND PARTNERS, L.P. IRS Identification Number 76-0693562 -------------- ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] -------------- ----------------------------------------------------------------- 3 SEC USE ONLY -------------- ----------------------------------------------------------------- 4 SOURCE OF FUNDS OO -------------- ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] -------------- ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Texas -------------- ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 600,000 shares SHARES ---------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 0 shares OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 600,000 shares PERSON ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 0 shares -------------- ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 600,000 shares -------------- ----------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] -------------- ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.2% -------------- ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN -------------- ----------------------------------------------------------------- AMENDMENT NO. 5 TO SCHEDULE 13D Capitalized terms that are not otherwise defined in this Amendment No. 5 have the meanings ascribed to them in Amendments No. 1, No. 2, No. 3 and No. 4 to the original Schedule 13D filed with the Securities and Exchange Commission on June 29, 2000, April 3, 2001, May 11, 2001, and August 14, 2001, respectively, (the "Amended Filing"), by George P. Mitchell and Cynthia Woods Mitchell with respect to the Class A Common Stock, $.10 par value, of Mitchell Energy & Development Corp. (the "Company"). The Amended Filing is hereby supplemented and amended to the extent set forth in this Amendment No. 5. ITEM 2. IDENTITY AND BACKGROUND (a)-(b) This statement is filed by George P. Mitchell and Cynthia Woods Mitchell. It is also filed by MND PARTNERS, L.P., a Texas limited partnership (the "Limited Partnership") whose principal office is located at 600 Travis, Suite 3600, Houston, Texas 77002. Additional information with respect to the Limited Partnership is set forth on Annex A to this statement. ITEM 4. PURPOSE OF TRANSACTION On October 5, 2001, the Company and Devon Energy announced that they had amended and restated the Merger Agreement to provide for an alternate structure to eliminate the risk that Devon Energy's stock price would prevent the issuance of certain tax opinions the receipt of which are a condition to the transaction. Under the original structure, the Company was to merge into a subsidiary of Devon Energy. The transaction was designed to be tax-free except to the extent that the Company's shareholders receive cash. Consequently, a condition to the merger is that the Company and Devon Energy each receive a satisfactory tax opinion from its legal counsel with regarding the U.S. federal income tax treatment of the merger. A decline in Devon Energy's stock price created doubt as to whether those opinions could be obtained at closing, if the original structure were used. The amended Merger Agreement requires the parties to complete the transaction as it was originally structured if the tax opinions are available. However, in the event that the opinions are not available under the original structure, the parties would effect the transaction by utilizing an alternate structure. To effect the alternate structure, Devon Energy created a new subsidiary, Devon Holdco Corporation. Through mergers, Devon Energy and the Company would become subsidiaries of Devon Holdco Corporation, which would be the new holding company and which would change its name to Devon Energy Corporation. In those mergers, Devon Energy's common shareholders would each receive one share of Devon Holdco Corporation common stock for each of their Page 1 of 6 Devon Energy common shares. The Company's shareholders would receive 0.585 shares of Devon Holdco Corporation common stock and $31 in cash for each of their shares of Class A Common Stock. Except as noted in this Item 4 or in Item 6 or Annex A of this Amendment No. 5, neither Mr. Mitchell, Mrs. Mitchell, the Limited Partnership nor the persons or entities with respect to whom information is provided in Annex A currently has any specific plans or proposals that would result in any of the matters described in paragraphs (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER The following table sets forth the number of shares of Class A Common Stock owned by Mr. Mitchell, Mrs. Mitchell and the Limited Partnership, in each case as of October 19, 2001:
OWNER SHARES BENEFICIALLY OWNED(6) -------------------------- ------------------------------------------------------------------------------------------ SOLE VOTING SHARED PERCENTAGE AND VOTING AND OF DISPOSITIVE POWER DISPOSITIVE POWER TOTAL OUTSTANDING SHARES (4) -------------------- ---------------------- ---------------- ------------------------ George P. Mitchell 21,758,205(1)(2) 1,022,506(3) 22,780,711 45.0% Cynthia Woods Mitchell -0- 1,022,506(1) 1,022,506 2.0% MND PARTNERS, L.P. 600,000(5) -0- 600,000 1.2%
--------------------------- (1) Subject to shared power of spouse under applicable Texas marital property laws. (2) Includes 404,666 shares of Class A Common Stock which Mr. Mitchell has the right to acquire within 60 days following October 19, 2001 on the exercise of stock options. (3) Owned of record by Cynthia Woods Mitchell. Mr. Mitchell disclaims beneficial ownership of these shares. (4) For purposes of this calculation with respect to Mr. Mitchell, the Company's outstanding shares of Class A Common Stock include: (a) the 50,216,830 shares outstanding at October 19, 2001, and (b) the 404,666 shares referred to in footnote (2) above. For purposes of this calculation with respect to Mrs. Mitchell and the Limited Partnership, the Company's outstanding shares of Class A Common Stock include only the 50,216,830 shares outstanding on October 19, 2001. (5) Shares transferred as a capital contribution by Mr. Mitchell to the Limited Partnership on October 17, 2001. (6) See Item 6 below for information relating to the terms of the Shareholders Agreement referred to therein pursuant to which Mr. and Mrs. Mitchell have agreed, among other things, to vote their shares of Class A Common Stock in favor of the adoption of the Merger Agreement and to grant an irrevocable proxy to Devon Energy in support of such commitment. As required by the Shareholders Agreement, the Limited Partnership has agreed to be bound by all of the provisions of the Shareholders Agreement. Mr. and Mrs. Mitchell and the Limited Partnership expressly disclaim that they have become members of a group comprised of themselves and Devon Energy as a result of the execution (or adoption by the Limited Partnership) of the Shareholders Agreement. Page 2 of 6 Except as disclosed in footnote (5) to the preceding table, neither Mr. Mitchell, Mrs. Mitchell, the Limited Partnership nor the persons or entities with respect to whom information is provided in Annex A has engaged in any transactions in shares of the Class A Common Stock within the past 60 days. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS AND RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER In connection with the amendment and restatement of the Merger Agreement, the Shareholders Agreement and Investor Agreement were also amended and restated. Copies of the Shareholders Agreement and the Investor Agreement as amended and restated are filed as exhibits to this Amendment No. 5 and are incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS E-1. Joint Filing Agreement between George P. Mitchell, Cynthia Woods Mitchell and MND PARTNERS, L.P. E-2. Principal Shareholders Agreement Containing a Voting Agreement and An Irrevocable Proxy (As Amended and Restated), dated as of August 13, 2001, by and among Devon Energy Corporation, George P. Mitchell and Cynthia Woods Mitchell. E-3. Amended and Restated Investor Rights Agreement, dated as of August 13, 2001, by and among Devon Energy Corporation, George P. Mitchell and Cynthia Woods Mitchell. Page 3 of 6 SIGNATURES After reasonable inquiry and to the best of the undersigneds' knowledge and belief, each of the undersigned hereby certifies that the information set forth in this statement is true, complete and correct. Dated: October 30, 2001. /s/ George P. Mitchell -------------------------------------------- George P. Mitchell /s/ Cynthia Woods Mitchell ----------------------------------- Cynthia Woods Mitchell MND PARTNERS, L.P. By: MND-GP, LLC General Partner By: /s/ J. Todd Mitchell -------------------------------- J. Todd Mitchell Manager Page 4 of 6 ANNEX A TO AMENDMENT NO. 5 TO SCHEDULE 13D INFORMATION WITH RESPECT TO MND PARTNERS, L.P. The Limited Partnership is a Texas limited partnership whose principal office is located at 600 Travis, Suite 3600, Houston, Texas 77002. Its principal business is to own, hold and manage its assets and to promote the retention of its assets within the lineal descendants of George P. Mitchell and Cynthia Woods Mitchell. The sole general partner of the Limited Partnership is MND-GP, LLC, a Texas limited liability company (the "General Partner") whose principal office is located at 600 Travis, Suite 3600, Houston, Texas 77002. Its principal business is to serve as the general partner of the Limited Partnership. The membership interests in the General Partner are held in equal shares by the ten adult children of Mr. and Mrs. Mitchell. Mr. and Mrs. Mitchell at the date of this Amendment No. 5 own all of the limited partnership interests in the Limited Partnership, but expect in the future to transfer substantial portions of those interests by gift equally to their ten children. Without the prior approval of limited partners holding at least 51% of the partnership interests, the General Partner may not authorize certain significant actions outside the ordinary course of the Limited Partnership's business, including the sale in any one calendar year of more than 25% of the Class A Common Stock transferred to the Limited Partnership or the distribution in kind of partnership assets other than cash. Mr. and Mrs. Mitchell disclaim beneficial ownership of the shares of Class A Common Stock held by the Limited Partnership. The business and affairs of the General Partner are managed under the direction of its sole Manager, J. Todd Mitchell, whose address is 600 Travis, Suite 3600, Houston, Texas 77002. J. Todd Mitchell is a citizen of the United States, is the son of George P. Mitchell, and is a director of the Company. His present principal occupation is President of GPM, Inc., 600 Travis, Suite 3600, Houston, Texas 77002, the principal business of which is private investments. Pursuant to the Merger Agreement, J. Todd Mitchell will be added to the board of directors of Devon Energy. J. Todd Mitchell disclaims beneficial ownership of the Class A Common Stock held by the Limited Partnership and beneficially owns no other shares of Class A Common Stock. Neither the Limited Partnership, the General Partner or J. Todd Mitchell has during the last five years been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is Page 5 of 6 subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Page 6 of 6 EXHIBIT INDEX E-1. Joint Filing Agreement between George P. Mitchell, Cynthia Woods Mitchell and MND PARTNERS, L.P. E-2. Principal Shareholders Agreement Containing a Voting Agreement and An Irrevocable Proxy (As Amended and Restated), dated as of August 13, 2001, by and among Devon Energy Corporation, George P. Mitchell and Cynthia Woods Mitchell. E-3. Amended and Restated Investor Rights Agreement, dated as of August 13, 2001, by and among Devon Energy Corporation, George P. Mitchell and Cynthia Woods Mitchell. EX-99.E1 3 h91706ex99-e1.txt JOINT FILING AGREEMENT Exhibit E-1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including amendments thereto) with regard to the Class A Common Stock of Mitchell Energy & Development Corp., and further agree that this Joint Filing Agreement be included as an exhibit to such joint filings. In evidence thereof the undersigned hereby execute this Agreement as of the 30th day of October, 2001. /s/ GEORGE P. MITCHELL ----------------------------------- George P. Mitchell /s/ CYNTHIA WOODS MITCHELL ----------------------------------- Cynthia Woods Mitchell MND PARTNERS, L.P. By: MND-GP, LLC By: /s/ J. Todd Mitchell --------------------- J. Todd Mitchell Manager EX-99.E2 4 h91706ex99-e2.txt PRINCIPAL SHAREHOLDERS AGREEMENT EXHIBIT E-2 PRINCIPAL SHAREHOLDERS AGREEMENT CONTAINING A VOTING AGREEMENT AND AN IRREVOCABLE PROXY (AS AMENDED AND RESTATED) BY AND AMONG DEVON ENERGY CORPORATION GEORGE P. MITCHELL AND CYNTHIA WOODS MITCHELL Dated as of August 13, 2001 TABLE OF CONTENTS
PAGE ARTICLE I DEFINITIONS................................................................................2 Section 1.1 Definitions.......................................................................2 ARTICLE II VOTING AGREEMENT AND IRREVOCABLE PROXY.....................................................2 Section 2.1 Agreement to Vote the Subject Shares..............................................2 Section 2.2 Grant of Irrevocable Proxy........................................................3 Section 2.3 Nature of Irrevocable Proxy.......................................................3 Section 2.4 Legend............................................................................3 ARTICLE III COVENANTS..................................................................................3 Section 3.1 Generally.........................................................................3 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS.............................................4 Section 4.1 Due Authority.....................................................................4 Section 4.2 Ownership of Shares...............................................................4 Section 4.3 No Conflicts......................................................................4 Section 4.4 Title to Purchased Shares.........................................................4 Section 4.5 Reliance by Parent................................................................4 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT...................................................5 Section 5.1 Due Organization, etc.............................................................5 Section 5.2 Conflicts.........................................................................5 Section 5.3 Reliance by Shareholder...........................................................5 ARTICLE VI MISCELLANEOUS..............................................................................5 Section 6.1 Shareholder Capacity..............................................................5 Section 6.2 Publication.......................................................................5 Section 6.3 Further Actions...................................................................6 Section 6.4 Entire Agreement..................................................................6 Section 6.5 Binding Effect; Benefit; Assignment...............................................6 Section 6.6 Amendments, Waivers, etc..........................................................6 Section 6.7 Notices...........................................................................6 Section 6.8 Specific Enforcement..............................................................7 Section 6.9 Remedies Cumulative...............................................................7 Section 6.10 No Waiver.........................................................................7
-i- TABLE OF CONTENTS (continued)
PAGE Section 6.11 Governing Law; Jurisdiction; Waiver of Jury Trial.................................7 Section 6.12 Headings..........................................................................8 Section 6.13 Counterparts; Facsimiles..........................................................8 Section 6.14 Termination.......................................................................8
-ii- PRINCIPAL SHAREHOLDERS AGREEMENT (AS AMENDED AND RESTATED) This PRINCIPAL SHAREHOLDERS AGREEMENT, as amended and restated (this "Agreement"), dated as of August 13, 2001, by and among Devon Energy Corporation, a Delaware corporation ("Parent"), George P. Mitchell and Cynthia Woods Mitchell each being shareholders (each, a "Shareholder") of Mitchell Energy & Development Corp., a Texas corporation (the "Company"). WITNESSETH: WHEREAS, this Agreement (entered into as of October 5, 2001) amends and restates in its entirety the Principal Shareholders Agreement, dated as of August 13, 2001 (which shall be deemed to be the date of this Agreement), by and among Parent and the Shareholders; WHEREAS, Parent, Devon NewCo Corporation, a Delaware corporation and a wholly owned subsidiary of Parent, and the Company are parties to an Agreement and Plan of Merger dated as of the date hereof and, together with certain other parties, propose to enter into an Amended and Restated Agreement and Plan of Merger, to be dated as of the date hereof (as so amended and restated, the "Merger Agreement"); WHEREAS, as of the date hereof, each Shareholder "beneficially owns" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) and each Shareholder is entitled to dispose of (or to direct the disposition of) and to vote (or to direct the voting of) the number of shares of Class A Common Stock, par value $0.10 per share of the Company (the "Common Stock") set forth opposite the Shareholder's name on Annex A hereto, as such shares may be adjusted by stock dividend, stock split, recapitalization, combination, merger, consolidation, reorganization or other change in the capital structure of the Company affecting the Common Stock (such shares of Common Stock, together with any other shares of Common Stock the voting power over which is acquired by the Shareholders during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms, are collectively referred to herein as the Shareholder's "Subject Shares"); WHEREAS, prior to the execution and delivery of this Agreement by any party hereto, Parent has purchased from George P. Mitchell 100 shares of Common Stock (the "Purchased Shares"); and WHEREAS, as a condition to the willingness of Parent to enter into the Merger Agreement, and as an inducement and in consideration therefor, Parent has required that each Shareholder agrees, and each Shareholder has agreed, to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual premises, representations, warranties, covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Merger Agreement. ARTICLE II VOTING AGREEMENT AND IRREVOCABLE PROXY SECTION 2.1 AGREEMENT TO VOTE THE SUBJECT SHARES. Each Shareholder, in its capacity as such, hereby agrees that during the period commencing on the date hereof and continuing until the termination of this Agreement (such period, the "Voting Period"), at any meeting (or any adjournment or postponement thereof) of the holders of any class or classes of the capital stock of the Company, however called, or in connection with any written consent of the holders of any class or classes of the capital stock of the Company, the Shareholders shall vote (or cause to be voted) their Subject Shares (x) in favor of the approval of the terms of the Merger Agreement and each of the other transactions contemplated by the Merger Agreement (and any actions required in furtherance thereof) at every meeting of the shareholders of the Company (or in connection with any written consent) at which such matters are considered and at every adjournment thereof, (y) against any action, proposal, transaction or agreement that would result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company or any of its subsidiaries under the Merger Agreement or of the Shareholders under this Agreement, and (z) except as otherwise agreed to in writing in advance by Parent, against the following actions or proposals (other than the transactions contemplated by the Merger Agreement): (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its subsidiaries and any Company Acquisition Proposal; (ii) a sale, lease or transfer of a significant part of the assets of the Company or any of its subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its subsidiaries (each of the actions in clauses (i) or (ii), a "Business Combination"); and (iii) (A) any change in the persons who constitute the board of directors of the Company that is not approved in advance by at least a majority of the persons who were directors of the Company as of the date of this Agreement (or their successors who were so approved); (B) any change in the present capitalization of the Company or any amendment of the Company's articles of incorporation or bylaws; (C) any other material change in the Company's corporate structure or business; or (D) any other action or proposal involving the Company or any of its subsidiaries that is intended, or could reasonably be expected, to prevent, impede, interfere with, delay, postpone, or adversely affect the transactions contemplated by the Merger Agreement. Any such vote shall be cast or consent shall be given in accordance with such procedures relating thereto as shall ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent. Each of the Shareholders agrees not to enter into any agreement, letter of intent, agreement in principle or understanding with any person that violates or conflicts with or could reasonably be expected to violate or conflict with the provisions and agreements contained in this Agreement or the Merger Agreement. For the avoidance of doubt, this Agreement is intended to constitute a voting agreement entered into under Section B, Article 2.30 of the TBCA for the duration of the Voting Period. 2 SECTION 2.2 GRANT OF IRREVOCABLE PROXY. Each Shareholder hereby appoints Parent and any designee of Parent, and each of them individually, such Shareholder's proxy and attorney-in-fact, with full power of substitution and resubstitution, to vote or act by written consent during the Voting Period with respect to each of the Shareholders' Subject Shares in accordance with Section 2.1. This proxy is given to secure the performance of the duties of each of the Shareholders under this Agreement. The Shareholders shall promptly cause a copy of this Agreement to be deposited with the Company at its principal place of business. Each Shareholder shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. SECTION 2.3 NATURE OF IRREVOCABLE PROXY. The proxy and power of attorney granted pursuant to Section 2.2 by each Shareholder shall be irrevocable during the term of this Agreement, shall be deemed to be coupled with an interest sufficient in law to support an irrevocable proxy and shall revoke all prior proxies granted by the Shareholders. The power of attorney granted herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of each Shareholder. For the avoidance of doubt, the proxy and power of attorney is granted pursuant to Section C, Article 2.29 of the TBCA, is coupled with an interest and is granted to Parent as a shareholder of the Company and a party to this voting agreement which is created under Section B, Article 2.30 of the TBCA and is intended to be valid during the Voting Period, which the parties understand and agree may be more than eleven months from the date hereof. SECTION 2.4 LEGEND. Each Shareholder shall promptly cause the following legend to be conspicuously noted on each certificate representing its Subject Shares: "The shares represented by this certificate are subject to a Principal Shareholders Agreement dated as of August 13, 2001. The Principal Shareholders Agreement restricts the transferability of the shares represented by this certificate and includes a voting agreement and an irrevocable proxy to vote the shares represented by this certificate." ARTICLE III COVENANTS SECTION 3.1 GENERALLY. Except for pledges in existence as of the date hereof, each Shareholder agrees that, except as contemplated by the terms of this Agreement, it shall not (i) sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other agreement with respect to, or consent to, the sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of its Subject Shares; (ii) grant any proxies or powers of attorney in respect of the Subject Shares, deposit any of its Subject Shares into a voting trust or enter into a voting agreement with respect to any of its Subject Shares; and (iii) take any action that would have the effect of preventing, impeding, interfering with or adversely affecting its ability to perform its respective obligations under this Agreement. Notwithstanding the foregoing, nothing herein shall prevent the Shareholders from 3 assigning or transferring any Subject Shares beneficially owned by either of them to any trust, estate, family partnership, foundation (whether family, private or public) or other charitable organization (a "Permitted Transferee") if such Permitted Transferee agrees in writing to be bound by all of the provisions of this Agreement as a Shareholder hereunder. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS Each of the Shareholders hereby represents and warrants to Parent as follows: SECTION 4.1 DUE AUTHORITY. Each Shareholder has the capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby. SECTION 4.2 OWNERSHIP OF SHARES. Each Shareholder legally or beneficially owns the number of shares of Common Stock set forth opposite their name on Annex A hereto. The number of shares of Common Stock set forth opposite their name on Annex A hereto are all of the shares of Common Stock legally or beneficially owned by them. Each Shareholder has sole voting power and sole power of disposition, in each case with respect to all of shares of Common Stock set forth opposite his or her name on Annex A hereto, with no limitations, qualifications or restrictions on such rights, subject only to applicable securities laws and the terms of this Agreement and as otherwise noted on Annex A. SECTION 4.3 NO CONFLICTS. (i) No filing with any governmental authority, and no authorization, consent or approval of any other person is necessary for the execution of this Agreement by the Shareholders and the consummation by the Shareholders of the transactions contemplated hereby and (ii) none of the execution and delivery of this Agreement by the Shareholders, the consummation by the Shareholders of the transactions contemplated hereby or compliance by the Shareholders with any of the provisions hereof shall (A) result in, or give rise to, a violation or breach of or a default under any of the terms of any material contract, understanding, agreement or other instrument or obligation to which either Shareholder is a party or by which either Shareholder or any of his or her Subject Shares or assets may be bound, or (B) violate any applicable order, writ, injunction, decree, judgment, statute, rule or regulation which could reasonably be expected to adversely affect the Shareholder's ability to perform its obligations under this Agreement. SECTION 4.4 TITLE TO PURCHASED SHARES. The transfer by George P. Mitchell of the Purchased Shares to Parent has passed to and unconditionally vested in Parent good and valid title to all of the Purchased Shares, free and clear of all claims, Liens, restrictions, limitations and encumbrances whatsoever, other than any such encumbrances created by Parent. SECTION 4.5 RELIANCE BY PARENT. Each Shareholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by such Shareholder. 4 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT Parent hereby represents and warrants to each Shareholder as follows: SECTION 5.1 DUE ORGANIZATION, ETC. Parent is a company duly organized and validly existing under the laws of the jurisdiction of its incorporation. Parent has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by Parent has been duly authorized by all necessary action on the part of Parent and, assuming its due authorization, execution and delivery by each Shareholder constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. SECTION 5.2 CONFLICTS. (i) No filing with any governmental authority, and no authorization, consent or approval of any other person is necessary for the execution of this Agreement by Parent and the consummation by Parent of the transactions contemplated hereby and (ii) none of the execution and delivery of this Agreement by Parent, the consummation by Parent of the transactions contemplated hereby shall (A) conflict with or result in any breach of the organizational documents of Parent, (B) result in a violation or breach of or a default under any of the terms of any material contract, understanding, agreement or other instrument or obligation to which Parent is a party or by which Parent or any of its assets may be bound, or (C) violate any applicable order, writ, injunction, decree, judgment, statute, rule or regulation which could reasonably be expected to adversely affect Parent's ability to perform its obligations under this Agreement. SECTION 5.3 RELIANCE BY SHAREHOLDER. Parent understands and acknowledges that each Shareholder is entering into this Agreement in reliance upon the execution and delivery of the Merger Agreement by Parent. ARTICLE VI MISCELLANEOUS SECTION 6.1 SHAREHOLDER CAPACITY. No Shareholder executing this Agreement who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding herein in his or her capacity as such director or officer. Each Shareholder executes this Agreement solely in his or her capacity as the record holder or beneficial owner of his or her Subject Shares and nothing herein shall limit or affect any actions taken by a Shareholder in his or her capacity as an officer or director of the Company. SECTION 6.2 PUBLICATION. Each Shareholder hereby permits Parent to publish and disclose in the Proxy Statement/Prospectus (including all documents and schedules filed with the Securities and Exchange Commission) its identity and ownership of shares of Common Stock and the nature of its commitments, arrangements, and understandings pursuant to this Agreement. 5 SECTION 6.3 FURTHER ACTIONS. Each of the parties hereto agrees that it will use its best efforts to do all things necessary to effectuate this Agreement. SECTION 6.4 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein and supersedes all prior agreements and understandings, oral and written, with respect thereto. SECTION 6.5 BINDING EFFECT; BENEFIT; ASSIGNMENT. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their Permitted Transferees, heirs, estates and successors. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto, except by will or by the laws of descent and distribution, without the prior written consent of each of the other parties, except that Parent may assign and transfer its rights and obligations hereunder to any direct or indirect wholly owned subsidiary of Parent. Nothing in this Agreement, expressed or implied, is intended to confer on any person, other than the parties hereto, any rights or remedies. SECTION 6.6 AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by all of the relevant parties hereto. SECTION 6.7 NOTICES. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or mailed, certified or registered mail with postage prepaid, or sent by facsimile (upon confirmation of receipt), as follows: (i) If to any Shareholder, to such Shareholder at the address set forth immediately beneath such Shareholder's name on Annex A: with a copy (which shall not constitute notice) to: Bracewell & Patterson L.L.P. 711 Louisiana Street, Suite 2900 Houston, Texas 77002 Attention: Edgar J. Marston III Fax: (713) 221-1188 (ii) If to Parent, to it at: Devon Energy Corporation 20 North Broadway, Suite 1500 Oklahoma City, Oklahoma 73102 Attention: J. Larry Nichols Fax: (405) 552-7602 and Duke R. Ligon Fax: (405) 552-4648 6 with a copy (which shall not constitute notice) to: Mayer, Brown & Platt 190 South LaSalle Street Chicago, Illinois 60603 Attention: Scott J. Davis James T. Lidbury Fax: (312) 701-7711 or to such other person or address as any party shall specify by notice in writing to each of the other parties. All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date of delivery, except for a notice of a change of address, which shall be effective only upon receipt thereof. SECTION 6.8 SPECIFIC ENFORCEMENT. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 6.9 REMEDIES CUMULATIVE. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. SECTION 6.10 NO WAIVER. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. SECTION 6.11 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. EACH OF THE SHAREHOLDERS AND PARENT HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COMPETENT COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA, IN EITHER CASE LOCATED IN DALLAS COUNTY, TEXAS (THE "TEXAS COURTS") FOR ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH LITIGATION IN THE TEXAS COURTS AND AGREES NOT TO PLEAD OR CLAIM IN ANY TEXAS COURT THAT SUCH LITIGATION BROUGHT THEREIN HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE 7 UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. SECTION 6.12 HEADINGS. The descriptive headings of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 6.13 COUNTERPARTS; FACSIMILES. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. A signature transmitted by facsimile shall be treated for all purposes by the parties hereto as an original, shall be binding upon the party transmitting such signature without limitation. SECTION 6.14 TERMINATION. This Agreement shall terminate, and none of Parent or any Shareholder shall have any rights or obligations hereunder and this Agreement shall become null and void and have no effect upon the earliest to occur of (a) the mutual consent of Parent and the Shareholders, (b) the second anniversary of the date of this Agreement, (c) the Effective Time or (d) the termination of the Merger Agreement (i) by Parent for any reason or (ii) by the Company because of the failure of the conditions contained in Sections 7.1(a)(ii), 7.1(b), 7.1(c), 7.1(d), 7.1(e) or 7.2 to have been satisfied; provided, further, that termination of this Agreement shall not prevent any party hereunder from seeking any remedies (at law or in equity) against any other party hereto for such party's breach of any of the terms of this Agreement. Notwithstanding the foregoing, Sections 6.4, 6.5, 6.7, 6.9 and 6.11 shall survive the termination of this Agreement. 8 IN WITNESS WHEREOF, Parent and each Shareholder have caused this Agreement to be duly executed as of the day and year first above written. DEVON ENERGY CORPORATION By: /s/ J. LARRY NICHOLS ------------------------------------------------------ Name: J. Larry Nichols Title: Chairman, President and Chief Executive Officer THE SHAREHOLDERS /s/ GEORGE P. MITCHELL ------------------------------------------------------ George P. Mitchell /s/ CYNTHIA WOODS MITCHELL ------------------------------------------------------ Cynthia Woods Mitchell ANNEX A LIST OF SHAREHOLDERS AND OWNERSHIP OF COMMON STOCK
NUMBER OF SHARES OF COMMON STOCK SHAREHOLDER ADDRESS AS OF AUGUST 10, 2001 ----------- ------- --------------------- George P. Mitchell c/o J. Todd Mitchell 23,380,811(1)(2)(3)(4) 600 Travis Street Suite 3600 Houston, Texas 77002 Cynthia Woods Mitchell c/o J. Todd Mitchell 1,022,506(1) 600 Travis Street Suite 3600 Houston, Texas 77002
-------------- (1) Subject to shared power of spouse under applicable Texas marital property laws. (2) Includes 404,666 shares of Common Stock which George P. Mitchell has the right to acquire within 60 days on the exercise of stock options. (3) Includes 1,022,506 shares of Common Stock owned of record by Cynthia Woods Mitchell. George P. Mitchell disclaims beneficial ownership of these shares. (4) Includes 5,888,998 shares of Common Stock which George P. Mitchell has pledged with lenders to secure existing credit facilities. The certificates representing these shares will not be stamped with the legend referred to in Section 2.4. EX-99.E3 5 h91706ex99-e3.txt AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT EXHIBIT E-3 ================================================================================ AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT BETWEEN DEVON ENERGY CORPORATION, DEVON HOLDCO CORPORATION AND GEORGE P. MITCHELL AND CYNTHIA WOODS MITCHELL DATED AS OF AUGUST 13, 2001 ================================================================================ AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT This Amended and Restated Investor Rights Agreement (this "Agreement") is made as of August 13, 2001 by and between Devon Energy Corporation, a Delaware corporation ("Parent"), Devon Holdco Corporation, a Delaware corporation and a wholly owned subsidiary of Parent ("Alternate Holdco"), George P. Mitchell and Cynthia Woods Mitchell ("Investors"). RECITALS WHEREAS, this Agreement (entered into as of October 5, 2001) amends and restates in its entirety the Investor Rights Agreement, dated as of August 13, 2001 (which shall be deemed to be the date of this Agreement), by and among Parent and Investors; WHEREAS, pursuant to the merger contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of August 13, 2001 (the "Merger Agreement"), by and among Parent, Devon NewCo Corporation, Alternate Holdco, Devon Merger Corporation, Mitchell Merger Corporation and Mitchell Energy & Development Corp. (the "Company"), Investors may acquire shares (the "Shares") of Parent's common stock, par value $0.10 per share ("Parent Common Stock"), or, if an Alternate Structure Event (as defined in the Merger Agreement) occurs, of Alternate Holdco common stock, in exchange for their shares of common stock, par value $0.10 per share, of the Company; and WHEREAS, Investors are receiving certain demand and piggyback registration rights in connection with Investors' receipt of such shares pursuant to the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Affiliate" shall mean, with respect to any person, each of such person's officers, directors, employees and agents, and each other person controlling such person within the meaning of the Securities Act. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Register", "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registrable Securities" shall mean the Shares and any shares of Parent Common Stock issued or issuable in respect of the Shares upon any stock split, stock dividend, recapitalization, or similar event and held by Investors until such time as (i) a registration statement covering such securities has been declared effective by the Commission and such securities have been disposed of pursuant to such effective registration statement, or (ii) such securities cease to be Eligible (as defined below), or (iii) such securities have been transferred and may be sold by the transferee without registration under the Securities Act, after which such securities shall no longer be Registrable Securities. Such securities shall be "Eligible" unless (A) at any time prior to the second anniversary of the Closing Date (as defined in the Merger Agreement) the Investors cease to be the beneficial owners of at least 1 million Shares or (B) at any time on or after the second anniversary of the Closing Date such securities may be sold pursuant to Rule 145 or Rule 144 (or any successor or similar rule) under the Securities Act without regard to the volume of sale restrictions referred to therein and Parent has notified the Investors in writing that it has irrevocably waived the applicability of Section 11 of this Agreement with respect to such securities. "Registration Expenses" shall mean all expenses incurred by Parent in complying with Sections 2 and 3 hereof, including all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel and of the accountants for Parent, blue sky fees and expenses and the expense of any special audits incident to or required by any such compliance. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the Registrable Securities registered by Investors and all fees and disbursements of counsel for Investors. Capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Merger Agreement. 2. Requested Registration. a. Request for Registration. In case Parent shall receive from Investors a written request that Parent effect any registration with respect to any of the Registrable Securities, Parent shall, as soon as practicable, use reasonable best efforts to effect such registration (including appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) on Form S-3 or, if Form S-3 is not available, then on Form S-1 (or any successor forms of registration statements to such Forms S-3 or S-1 or other available registration statements) and as would permit or facilitate the sale and distribution of the Registrable Securities for which registration is requested. The registration statement filed pursuant to the request of 2 Investors under this Section 2(a) may include securities of Parent held by other securityholders of Parent who, by virtue of agreements with Parent, are entitled to include their securities in any such registration, but Parent shall have no absolute right to include securities for its own account in any such registration. b. Notwithstanding the foregoing, Parent shall not be obligated to file a registration statement to effect any such registration pursuant to this Section 2: i. unless the amount of Registrable Securities for which registration is requested is at least 5,000,000 shares (as adjusted for any stock split, stock dividend, recapitalization or similar event); provided, however, that if the total number of Registrable Securities held by Investors (but not a transferee of Investors) is less than 5,000,000 shares (as adjusted to give effect to any stock split, reverse stock split, stock dividend, recapitalization or any similar event or transaction), then Investors (but not a transferee of Investors) may request registration under this Section 2 as to all but not less than all of such Registrable Securities as may then be held by Investors; and ii. after Parent has initiated two such registrations pursuant to this Section 2 (counting for these purposes only registrations that have been declared effective). c. Underwriting. Any offering of securities made under this Section 2 shall be pursuant to a "firm commitment" underwriting. Parent (together with Investors) shall enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by Investors with the consent of Parent, which consent shall not be unreasonably withheld. Notwithstanding any other provision of this Section 2, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the number of Registrable Securities to be included in such registration to the extent required by such limitation. If the managing underwriter has not limited the number of Registrable Securities to be included in such registration, Parent may include securities for its own account or for the account of others in such registration if the number of Registrable Securities to be included in such registration will not thereby be limited. 3. Parent Registration. a. Notice of Registration. If Parent shall determine to register any of its securities, either for its own account or the account of a security holder or holders exercising their respective registration rights, other than (i) a registration relating solely to employee benefit plans on Form S-8 (or similar successor form), or (ii) a registration on Form S-4 (or similar successor form) relating solely to a Commission Rule 145 transaction, Parent will: i. promptly give Investors written notice thereof; and ii. use its reasonable best efforts to include in such registration (and any related qualification under blue sky laws or other compliance), and in any 3 underwriting involved therein, all Registrable Securities specified in a written request to Parent made within 15 business days after receipt of such written notice by Investors. b. Underwriting. If the registration of securities pursuant to this Section 3 is underwritten, Parent shall so advise Investors as a part of the written notice given under Section 3(a). In such event, Investors' right to registration pursuant to this Section 3 shall be conditioned upon Investors' participation in such underwriting and the inclusion of Registrable Securities in the underwriting shall be subject to the limitations provided herein. Parent (together with Investors) shall enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by Parent. Notwithstanding any other provision of this Section 3, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, Parent shall so advise the holders of securities who have requested to include their securities in such registration, and the number of shares to be included in such registration shall be reduced by such minimum number of shares as is necessary to comply with such limitation, as follows: i. if the registration was initiated for the account of any security holder or holders other than Investors (the "Initiating Holders"), the number of shares reduced shall be (A) first, any shares sought to be registered by Parent for its own account, (B) second, if further reductions are required, any shares sought to be registered by holders of securities other than the Initiating Holders who have requested to include their securities in such registration, pro rata based on the number of shares requested to be included in such registration, and (C) third, if still further reductions are required, any securities sought to be registered by the Initiating Holders. ii. if the registration was initiated by Parent for its own account, the number of shares reduced shall be (A) first, any shares sought to be registered by holders of securities who have requested to include their securities in such registration, pro rata based on the number of shares requested to be included in such registration and (B) second, if further reductions are required, shares sought to be registered by Parent for its own account. 4. Black Out. In the event Parent determines, after a request for registration has been received from an Investor and prior to the completion of such registered offering, that it may be in possession of material undisclosed information with respect to Parent or its securities, (i) Parent shall notify Investors and request that Investors refrain from selling any Registrable Securities, and Investors shall refrain from selling any Registrable Securities, and (ii) Parent shall not be obligated to file a registration statement or effect any registration, qualification or compliance of Registrable Securities under Section 2 for a period of not more than 120 days from the date of such notice (the "Black Out Period"). A Black Out Period shall end upon the earlier to occur of (i) the full public disclosure of the material information giving rise to such Black Out Period, (ii) Parent notifying Investors in writing that the Black Out Period is terminated and (iii) the 120th day after the date of Parent's notice of the commencement of the Black Out Period. 4 Notwithstanding the foregoing, Parent shall not be entitled to declare a Black Out Period prior to twelve months from the end of a previous Black Out Period if more than 180 days of the immediately preceding 365 days have been subject to a Black Out Period, and Parent shall only exercise its rights under this Section 4 in good faith and shall not exercise such rights in an effort to frustrate Investors' ability to offer to sell and sell their Registrable Securities. 5. Expenses of Registration. All Registration Expenses incurred in connection with a registration pursuant to Sections 2 and 3 shall be borne by Parent. All Selling Expenses relating to the Registrable Securities which are registered shall be borne by Investors. 6. Registration Procedures. In the case of each registration effected by Parent pursuant to this Agreement, Parent will keep Investors advised in writing, if Investors are participating in such registration, as to the initiation of each registration and as to the completion thereof. At its expense, Parent will: a. prepare and file with the Commission a registration statement with respect to such securities and use reasonable best efforts to cause such registration statement to become and remain effective for at least 60 days (not including Black Out Periods) or until the distribution described in the registration statement has been completed, whichever first occurs; b. furnish to Investors, if Investors are participating in such registration, such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as Investors may reasonably request, including correspondence with the Commission and any exchanges on which Registrable Securities are listed; and c. notify Investors, if Investors are participating in such registration, of any updates or amendments to the prospectus and furnish to Investors any such updated and/or amended prospectuses. 7. Indemnification. a. Parent will indemnify Investors with respect to any registration, qualification or compliance which has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter within the meaning of the Securities Act (the "Underwriters"), against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation commenced or threatened arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by Parent of the Securities Act or any state securities law, or any rule or regulation promulgated thereunder, applicable to Parent in connection 5 with any such registration, and Parent will reimburse Investors and the Underwriters for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided, however, that Parent will not be liable in any such case to the extent that any such expense, claim, loss, damage or liability arises out of or is based on any untrue statement or omission, or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to Parent by Investors specifically for use therein. b. Investors will, if Registrable Securities are included in a registration being effected, indemnify Parent and each of its Affiliates and the Underwriters, if any, of Parent's securities covered by such a registration against all expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation commenced or threatened arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by Investors of the Securities Act or any state securities law, or any rule or regulation promulgated thereunder, applicable in connection with any such registration, and Investors will reimburse Parent, such Affiliates and the Underwriters for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent that such untrue statement or omission, or alleged untrue statement or omission, is made in such registration statement, prospectus, offering circular or other document incident to any such registration in reliance upon and in conformity with written information furnished to Parent by Investors specifically for use therein. Notwithstanding the foregoing, the liability of Investors under this subsection (b) or subsection (d) shall be limited in an amount equal to the public offering price of the Shares sold by Investors, unless such liability arises out of or is based on willful misconduct by Investors. c. Each party entitled to indemnification under this Section 7 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnifying Party shall have the option to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld); and provided, further, that the Indemnified Party may participate in such defense at such party's own expense. The failure of an Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. The Indemnifying Party shall not assume such defense for matters as to which there is a conflict of interest or separate and different defenses. In the event of a conflict of interest 6 or separate or different defenses, as determined in the reasonable opinion of counsel to the Indemnified Party, the Indemnifying Party will pay the reasonable legal fees and expenses of one counsel to the Indemnified Party. No claim may be settled without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld). No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. d. If the indemnification provided for in Section 7.a. or 7.b. is unavailable to or insufficient to hold harmless an indemnified party under Section 7.a. or 7.b. in respect of any expenses, claims, losses, damages or liabilities (or actions in respect thereof), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such expenses, claims, losses, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions which resulted in such expenses, claims, losses, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. 8. Information from Investors. Investors shall furnish to Parent such information regarding Registrable Securities being included in any registration and the distribution proposed by Investors as Parent may request in writing and as shall be required in connection with any registration referred to in this Agreement. 9. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of Registrable Securities to the public without registration, Parent agrees to use its best efforts to: a. make and keep public information available, as those terms are understood and defined in Rule 144 (or any successor or similar rule) promulgated by the Securities and Exchange Commission under the Securities Act; b. file with the Commission in a timely manner all reports and other documents required of Parent under the Securities Act and the Exchange Act; and c. so long as Investors own any Registrable Securities, promptly furnish to Investors upon request (i) a statement by Parent as to its compliance with the reporting requirements of Rule 144 (or any successor or similar rule), the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of Parent, and such other publicly filed reports and documents of Parent, and (iii) such other information in the possession of Parent as Investors may reasonably request in availing themselves of any rule or regulation of the Commission allowing Investors to sell any Shares without registration. 7 10. Amendment. Any provision of this Agreement may be amended or the observance thereof may be waived (either generally or in particular instance and either retroactively or prospectively) only with the written consent of each of the parties hereto. 11. Lockup. Investors agree that they will not, prior to the date which is nine months from the Closing Date (as defined in the Merger Agreement) (the "Lockup Date"), directly or indirectly sell, offer to sell, grant any option for the sale of, or otherwise dispose of any Shares other than pursuant to an underwritten registered offering made pursuant hereto or to a Permitted Transferee (as defined in the Principal Shareholders Agreement of even date among the Company and Investors) if such Permitted Transferee agrees in writing to be bound by all of the provisions of this Agreement as an Investor hereunder (in which case such Permitted Transferee shall be entitled to all of the rights and benefits of an Investor hereunder); provided, however, that following the Merger (or, if applicable, the Mitchell Merger) Investors may give or dispose of up to 2 million Shares to foundations (whether family, private or public) or other charitable organizations even if those foundations or other charitable organizations do not agree to be bound by the provisions of this Agreement, and thereafter such Shares shall not be subject to this Agreement. From and after the Lockup Date, Investors shall not dispose of Shares in amounts exceeding 1,000,000 Shares per calendar quarter, except pursuant to a registration statement or to a Permitted Transferee. In addition to all dispositions permitted above, beginning in the first calendar quarter of 2002, Investors may dispose of up to 500,000 Shares per calendar quarter to foundations (whether family, private or public) or other charitable organizations even if those foundations or other charitable organizations do not agree to be bound by this Agreement, and thereafter such Shares shall not be subject to this Agreement. 12. Termination. This Agreement shall terminate (i) prior to the second anniversary of the Closing Date (as defined in the Merger Agreement) at such time as Investors are the beneficial owners of less than one million Shares and (ii) on or after the second anniversary of the Closing Date at such time as Investors are the beneficial owners of Registrable Securities aggregating less than the greater of (A) one percent of the Parent Common Stock outstanding as shown by the most recent report or statement published by Parent, and (B) the average weekly reported volume of trading in Parent Common Stock on all national securities exchanges and/or reported through the automated quotation system of a registered securities association during the four immediately preceding calendar weeks. 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. PARENT AND INVESTORS EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA, IN EITHER CASE LOCATED IN DALLAS COUNTY, TEXAS (THE "TEXAS COURTS") FOR ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), WAIVES ANY 8 OBJECTION TO THE LAYING OF VENUE OF ANY SUCH LITIGATION IN THE TEXAS COURTS AND AGREES NOT TO PLEAD OR CLAIM IN ANY TEXAS COURT THAT SUCH LITIGATION BROUGHT THEREIN HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY. 14. Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties regarding the subject matter hereof. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon the successors and assigns of the parties hereto. 15. Notices and Dates. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission or by courier service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: if to Parent or Alternate Holdco, to: Devon Energy Corporation 20 North Broadway Suite 1500 Oklahoma City, OK 73102 Attention: J. Larry Nichols Facsimile: (405) 552-8171 and Duke R. Ligon Facsimile: (405) 552-4550 with a copy to: Mayer, Brown & Platt 190 South LaSalle Street Chicago, IL 60603 Attention: Scott J. Davis 9 if to Investors, to: George P. Mitchell Cynthia Woods Mitchell c/o J. Todd Mitchell 600 Travis Street Suite 3600 Houston, TX 77002 Facsimile: (713) 221-3406 with a copy to: Bracewell & Patterson LLP 711 Louisiana, 27th Floor South Tower Pennzoil Place Houston, TX 77002 Attention: Edgar J. Marston III Facsimile: (713) 221-1188 Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered, if delivered personally, by messenger or by courier, or upon confirmation of receipt if sent by facsimile. 16. Counterparts; Facsimiles. This Agreement may be executed in several counterparts (by facsimile or original signature), each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same instrument. A signature transmitted by facsimile shall be treated for all purposes by the parties hereto as an original and shall be binding upon the party transmitting such signature without limitation. 17. Further Assurances. The parties hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments or documents as any other party may reasonably request from time to time in order to carry out the intent and purposes of this Agreement and the consummation of the transactions contemplated thereby. Neither Parent nor Investors shall voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to them set forth in this Agreement, and each shall promptly do all such acts and take all such measures as may be appropriate to enable them to perform as early as practicable the obligations herein and therein required to be performed by them. 18. Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 10 19. Interpretation. When a reference is made in this Agreement to Sections, such references shall be to a Section to this Agreement unless otherwise indicated. The words "include," "includes" and "including" when used herein shall be deemed in each case to be followed by the words "without limitation." Use of any gender herein to refer to any person shall be deemed to comprehend masculine, feminine, and neuter unless the context clearly requires otherwise. 20. Mutual Drafting. This Agreement is the joint product of Investors and Parent, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of Investors and Parent and their respective legal counsel and advisers and any rule of construction that a document shall be interpreted or construed against the drafting party shall not be applicable. 21. Alternate Structure Event. If an Alternate Structure Event occurs, (a) all references to the term "Parent" in Sections 1 through 20 of this Agreement shall be deemed references to Alternate Holdco, (b) all references to the term "Parent Common Stock" in Sections 1 through 20 of this Agreement shall be deemed references to shares of common stock of Alternate Holdco, and (c) all references to the term "Shares" in Sections 1 through 20 of this Agreement shall be deemed references to shares of Alternate Holdco common stock received in the Mitchell Merger (as defined in the Merger Agreement). 11 IN WITNESS WHEREOF, the undersigned have executed this Investor Rights Agreement as of the date set forth above. DEVON ENERGY CORPORATION By: /s/ J. LARRY NICHOLS ------------------------------------- J. Larry Nichols Chairman, President and Chief Executive Officer DEVON HOLDCO CORPORATION By: /s/ J. LARRY NICHOLS ------------------------------------- J. Larry Nichols President /s/ GEORGE P. MITCHELL ------------------------------------- George P. Mitchell /s/ CYNTHIA WOODS MITCHELL ------------------------------------- Cynthia Woods Mitchell 12