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EXHIBIT 10.1
SECOND AMENDMENT
TO
PARENT COMPANY AGREEMENT
This Second Amendment to Parent Company Agreement (this "Amendment"),
dated as of August 3 4, 2000, is entered into by and among Phillips Petroleum
Company, a Delaware corporation ("Phillips"), Duke Energy Corporation, a North
Carolina corporation ("Duke"), Duke Energy Field Services, LLC, a Delaware
limited liability company (the "Company"), and Duke Energy Field Services
Corporation, a Delaware corporation ("DEFS").
WHEREAS, reference is made to that certain Parent Company Agreement by
and among Phillips, Duke, the Company and DEFS dated as of March 31, 2000, as
amended by the First Amendment to Parent Company Agreement dated as of May 25,
2000 (as so amended, the "Parent Company Agreement"); and
WHEREAS, Phillips, Duke, the Company and DEFS desire to amend the
Parent Company Agreement;
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived from this Amendment, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
Section 1. AMENDMENTS TO PARENT COMPANY AGREEMENT. The Parent Company
Agreement is hereby amended as follows:
(a) The definition of "Average Market Price" in Section 1.1 of
the Parent Company Agreement and in Exhibit C ("Terms of PGCSI Parent
Rights") and Exhibit D ("Terms of DENG Rights") to Exhibit A
("Agreement of Merger of Phillips Gas Company Shareholder, Inc. with
and into Duke Energy Field Services Corporation", also referred to
herein as the "Merger Agreement") to the Parent Company Agreement is
hereby amended in each instance by deleting the remainder of such
definition after the phrase "(exclusive of the pricing day)" and
substituting therefor the following:
"; provided, that (x) if the IPO Price is greater than or
equal to 116.6% of the Phillips 20% Price, the Average Market
Price shall not be below 95% of the IPO Price or in excess of
105% of the IPO Price, and (y) if the IPO Price is less than
116.6% of the Phillips 20% Price, the Average Market Price
shall be equal to the IPO Price. "IPO Price" shall mean the
public offering price per share of the Corporation Common
Stock in the IPO. "Phillips 20% Price" shall mean the Average
Market Price at which Phillips would own 20% of the
Corporation Common Stock after the IPO in accordance with the
ownership adjustment formula provided for herein (without
regard to the proviso in this definition and assuming that all
of the underwriters' over-allotment is exercised)."
(b) The definition of "Two Year Period" in Section 1.1 of the
Parent Company Agreement is hereby amended by (1) inserting the phrase
"one Business Day following" at
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the beginning of clause (b) prior to the words "the date" and (2)
inserting the phrase "and receipt by the Corporation of the proceeds
thereof" at the end of clause (b) prior to the period.
(c) Section 1.1 of the Parent Company Agreement is hereby
amended by inserting the following definitions in appropriate place in
alphabetical order:
"DEFS Investment" shall mean Duke Energy Field Services
Investment Corp., a Delaware corporation.
"Phillips Investment" shall mean Phillips Gas Investment
Company, a Delaware corporation.
"Preferred Interests" shall have the meaning set forth in the
LLC Agreement.
"Preferred Member" shall have the meaning set forth in the LLC
Agreement.
(d) Section 4.1 of the Parent Company Agreement is hereby
amended by: (1) inserting the phrase "(other than the Preferred
Members)" after the word "Members" in clause (i) of the first sentence
and (2) inserting ", Section 6.4(b)" after the words "Section 6.3" in
clause (a) of the second sentence.
(e) Section 4.2 of the Parent Company Agreement is hereby
amended by: (1) inserting "(and any other Company indebtedness)" after
the word "Financing" in clause (c) thereof and inserting "(other than
the Preferred Members)" after the word "Members" in clause (c) thereof;
(2) inserting the phrase "(other than the Preferred Members)" after the
words "Duke, Phillips, the Members" in clause (e); (3) deleting the
word "and" immediately prior to clause (f); and (4) inserting the
following at the end of such Section (prior to the period):
"; and (g) the allocation under Regulation Section
1.752-3(a)(3) of no Company liabilities to any of the
Preferred Members."
(f) Section 4.4 of the Parent Company Agreement is hereby
amended by: (1) inserting the phrase "or are used to repay, redeem or
make payments on the Preferred Interests" after the words "debt owed by
the Company or any of its Subsidiaries" and (2) inserting the phrase
"(other than the Preferred Members)" after the words "equity interest
holders".
(g) Article V of the Parent Company Agreement is hereby
amended by adding at the end of such Article the following new Section:
"Section 5.3 Transfer of Preferred Interests in the
Company. (a) Prior to the Preferred Mandatory Redemption Date (as
defined in the LLC Agreement), (i) Duke (x) shall not permit any
transfer of the direct or indirect ownership interests of DEFS
Investment to occur if such transfer results in a downgrade in the
Company's investment rating and (y)
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shall not permit any transfer of less than all of the direct or
indirect ownership interests of DEFS Investments in any event and (ii)
Phillips (x) shall not permit any transfer of the direct or indirect
ownership interests of Phillips Investment to occur if such transfer
results in a downgrade in the Company's investment rating and (y) shall
not permit any transfer of less than all of the direct or indirect
ownership interests of Phillips Investments in any event.
(b) In connection with any direct or indirect
transfer of ownership interests of DEFS Investment or Phillips
Investment, neither Duke nor Phillips shall enter into any agreement or
understanding (nor shall it permit any of its Affiliates to enter into
any agreement or understanding) with any other Person that would
require Duke or Phillips or any of their Affiliates to act at the
direction of, or obtain the consent or approval of, any other Person in
connection with the general exercise by Duke or Phillips of its right
to consent to an amendment to the LLC Agreement with respect to the
matters provided in the parenthetical in the first sentence of each of
Section 10.7 of the LLC Agreement and Section 3.6 of the First
Amendment to Amended and Restated Limited Liability Company Agreement
of Duke Energy Field Services, LLC, dated as of August 4, 2000. 2000."
(h) The definition of "Corporation Interest" in Section 1.1 of
Exhibit B (the "Shareholders' Agreement") to the Parent Company
Agreement is hereby amended by adding at the end of such definition the
following:
"; provided, that, for purposes of Section 2.1 only, (a) so
long as Phillips' Total Corporation Interest equals or exceeds
20%, if Phillips' Corporation Interest is less than 20%, then
Phillips' Corporation Interest shall be deemed to be 20%, (b)
so long as Duke's Total Corporation Interest equals or exceeds
30%, if Duke's Corporation Interest is less than 30%, then
Duke's Corporation Interest shall be deemed to be 30%, (c)
once Duke's Total Corporation Interest falls below 30%, so
long as Duke's Total Corporation Interest equals or exceeds
20%, if Duke's Corporation Interest is less than 20%, then
Duke's Corporation Interest shall be deemed to be 20%, and (d)
during any Static Period for a party, such party's Total
Corporation Interest and Corporation Interest shall each be
deemed to be the same as it was (or, pursuant to the preceding
clauses of this proviso, was deemed to be) at the beginning of
such Static Period. "Static Period" shall mean, with respect
to a party, any period during which such party is prohibited
from acquiring Corporation Common Stock (whether due to U.S.
securities laws, court injunction or governmental order
(except an injunction or order which permanently prohibits the
acquisition of Corporation Common Stock by such party, which
injunction or order has become final and unappealable), an
event which prevents public trading in Corporation Common
Stock, or otherwise (except any prohibition on the acquisition
of Corporation Common Stock agreed to by such party in an
agreement)), plus 30 Business Days thereafter."
(i) Section 5.1(a) of the Shareholders' Agreement, which is
Exhibit B to the Parent Company Agreement, is hereby amended by adding
at the end of such Section the following:
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"For purposes of this Section, during any Static Period for
Duke or Phillips, such party shall be deemed to own the same
percentage, directly or indirectly, of all outstanding Common
Stock that such party owned at the beginning of such Static
Period. "Static Period" shall mean, with respect to a party,
any period during which such party is prohibited from
acquiring Corporation Common Stock (whether due to U.S.
securities laws, court injunction or governmental order
(except an injunction or order which permanently prohibits the
acquisition of Corporation Common Stock by such party, which
injunction or order has become final and unappealable), an
event which prevents public trading in Corporation Common
Stock, or otherwise (except any prohibition on the acquisition
of Corporation Common Stock agreed to by such party in an
agreement)), plus 30 Business Days thereafter."
(j) Article X of Exhibit A ("Amended and Restated Certificate
of Incorporation") to the Merger Agreement, which is Exhibit A to the
Parent Company Agreement, is hereby amended by adding at the end of
such Article the following:
"For purposes of this Article, during any Static Period for
Duke or Phillips, such party shall be deemed to own the same
percentage, directly or indirectly, of all outstanding Common
Stock that such party owned at the beginning of such Static.
"Static Period" shall mean, with respect to a party, any
period during which such party is prohibited from acquiring
Corporation Common Stock (whether due to U.S. securities laws,
court injunction or governmental order (except an injunction
or order which permanently prohibits the acquisition of
Corporation Common Stock by such party, which injunction or
order has become final and unappealable), an event which
prevents public trading in Corporation Common Stock, or
otherwise (except any prohibition on the acquisition of
Corporation Common Stock agreed to by such party in an
agreement)), plus 30 Business Days thereafter."
(k) Sections 3.1 and 3.10(a) of Exhibit B (the "Amended and
Restated Bylaws") to the Merger Agreement, which is Exhibit A to the
Parent Company Agreement, is hereby amended by adding at the end of
each of such Sections the following:
"For purposes of this Section, during any Static Period for
Duke or Phillips, such party shall be deemed to own the same
percentage, directly or indirectly, of all outstanding Common
Stock that such party owned at the beginning of such Static
Period. "Static Period" shall mean, with respect to a party,
any period during which such party is prohibited from
acquiring Corporation Common Stock (whether due to U.S.
securities laws, court injunction or governmental order
(except an injunction or order which permanently prohibits the
acquisition of Corporation Common Stock by such party, which
injunction or order has become final and unappealable), an
event which prevents public trading in Corporation Common
Stock, or otherwise (except any prohibition on the acquisition
of Corporation Common Stock agreed to by such party in an
agreement)), plus 30 Business Days thereafter."
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(l) Article VIII of the Amended and Restated Bylaws, which is
Exhibit B to the Merger Agreement, which is Exhibit A to the Parent
Company Agreement is hereby amended by adding at the end of each of
such Article the following:
"For purposes of this Article, during any Static Period for
Duke or Phillips, such party shall be deemed to own the same
percentage, directly or indirectly, of all outstanding Common
Stock that such party owned at the beginning of such Static
Period. "Static Period" shall mean, with respect to a party,
any period during which such party is prohibited from
acquiring Corporation Common Stock (whether due to U.S.
securities laws, court injunction or governmental order
(except an injunction or order which permanently prohibits the
acquisition of Corporation Common Stock by such party, which
injunction or order has become final and unappealable), an
event which prevents public trading in Corporation Common
Stock, or otherwise (except any prohibition on the acquisition
of Corporation Common Stock agreed to by such party in an
agreement)), plus 30 Business Days thereafter."
(m) The second Recital of the Parent Company Agreement is
amended by inserting the phrase ", as amended" after the words "the
date hereof".
Section 2. MISCELLANEOUS.
(a) Counterparts. This Amendment may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts
have been signed by each of the parties hereto and delivered (including
by facsimile) to the other party.
(b) Incorporation. The provisions of Sections 8.2 through 8.12
of the Parent Company Agreement are hereby incorporated herein and
shall be deemed to include and/or apply to this Amendment, as
appropriate.
(c) Ratification. Except as amended hereby, the Parent Company
Agreement shall remain in full force and effect as previously executed
by the parties, and the parties hereby ratify the Parent Company
Agreement as amended hereby.
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IN WITNESS WHEREOF, each of the undersigned, intending to be legally
bound, has caused this Amendment to be duly executed and delivered on the date
first set forth above.
PHILLIPS PETROLEUM COMPANY
By: /s/ J.W. SHEETS
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Name: J.W. Sheets
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Title: Assistant Treasurer
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DUKE ENERGY CORPORATION
By: /s/ DAVID L. HAUSER
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Name: David L. Hauser
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Title: Senior Vice President
and Treasurer
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DUKE ENERGY FIELD SERVICES, LLC
By: /s/ JIM W. MOGG
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Name: Jim W. Mogg
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Title: Chairman of the Board, President
and Chief Executive Officer
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DUKE ENERGY FIELD SERVICES CORPORATION
By: /s/ JIM W. MOGG
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Name: Jim W. Mogg
------------------------------------
Title: Chairman of the Board, President
and Chief Executive Officer
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