Item 1.01 Entry into a Material Definitive Agreement.
Stockholders' Agreement
On the Closing Date, pursuant to the terms of the Purchase Agreement, the
Company, Felix Parent, EnCap Energy Capital Fund X, L.P. ("EnCap") and certain
members of Felix's management team entered into a Stockholders' Agreement (the
''Stockholders' Agreement''). Pursuant to the Stockholders' Agreement, Felix
Parent has the right to nominate up to two directors (the ''Investor
Directors'') for appointment to the board of directors of the Company (the
''Director Nominations''). The Director Nominations are subject to, among other
things, Felix Parent and such members of Felix's management team continuing to
hold a minimum amount of shares of the Company's common stock ("Common Stock")
and the individual nominees being reasonably acceptable to the Nominating, and
Governance, Environmental and Public Policy Committee of the Board (the
''Governance Committee'') and not prohibited by law. Until the date on which
Felix Parent is no longer entitled to designate any Investor Directors to the
Board, Felix Parent, EnCap and such members of Felix's management team have
agreed to cause all voting securities of the Company held by such persons or any
of EnCap's controlled affiliates or Felix Parent's affiliates to be voted in
favor of all director nominees nominated by the Governance Committee, against
any other nominees and against the removal of any director (other than an
Investor Director) unless the Governance Committee so recommends in favor of
such removal.
Pursuant to the Stockholders' Agreement, for a period from its execution through
180 days after the closing, Felix Parent has agreed not to transfer or dispose
of (or take other analogous actions in accordance with the terms of the
Stockholders' Agreement) any economic, voting or other rights in or to
two-thirds of the shares of the Company's Common Stock issued to Felix Parent
pursuant to the Purchase Agreement, other than certain permitted transfers. The
remaining one-third of the shares of the Company's Common Stock will not be
subject to transfer restrictions imposed by the Stockholders' Agreement.
Pursuant to the Stockholders' Agreement, EnCap has agreed to customary
standstill restrictions in accordance with which, among other things, EnCap has
agreed to not acquire, agree or propose or offer to acquire (including through
any hedging or other similar transaction) any shares of the Company's Common
Stock or securities that are convertible or exchangeable into (or exercisable
for) shares of the Company's Common Stock (or enter into certain agreements and
arrangements as set forth in the Stockholders' Agreement) to the extent such
acquisition results in EnCap owning the greater of the number of shares it owns
as of the Closing Date and the percentage of the outstanding shares it owns as
of the Closing Date.
The foregoing description of the Stockholders' Agreement is not complete and is
qualified in its entirety by reference to the complete text of the Stockholders'
Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated
herein by reference.
Registration Rights Agreement
On the Closing Date, pursuant to the terms of the Purchase Agreement, the
Company and Felix Parent entered into a Registration Rights Agreement (the
''Registration Rights Agreement'') pursuant to which, among other things and
subject to certain restrictions, the Company is required to file with the
Securities and Exchange Commission ("SEC") a registration statement registering
for resale the shares of the Company's Common Stock issued to Felix Parent in
connection with the Acquisition and to conduct certain underwritten offerings
upon the request of holders of Registrable Securities (as defined therein). The
Registration Rights Agreement also provides, among other things, holders of
Registrable Securities with certain customary piggyback registration rights.
The foregoing description of the Registration Rights Agreement is not complete
and is qualified in its entirety by reference to the complete text of the
. . .
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the "Introductory Note" above is incorporated into
this Item 2.01 by reference. As a result of the Acquisition and on the terms and
pursuant to the conditions contained in the Purchase Agreement, Felix Parent
sold to the Company, and the Company purchased, accepted and paid for, in each
case, as a result of the consummation of the transactions contemplated by the
Purchase Agreement, 100% of the issued and outstanding membership interests of
Felix (the ''Subject Securities''), free and clear of all encumbrances (other
than (i) restrictions on transfer pursuant to applicable securities laws or the
organizational documents of Felix and (ii) encumbrances arising by, through or
under the Company or its affiliates). The purchase price that the Company paid
for the Subject Securities is $2,500,000,000 (the ''Purchase Price'') consisting
of: (i) an amount in cash equal to $900,000,000 and (ii) the issuance of
152,963,671 unregistered, fully paid, validly issued and nonassessable shares of
the Company's common stock (the "Stock Issuance") determined by dividing
$1,600,000,000 by $10.46 (the volume weighted-average per share price of the
Company's common stock on the New York Stock Exchange, as reported by Bloomberg
L.P., for the ten consecutive trading days ending on the last full trading day
preceding the date of the Purchase Agreement, rounded to the nearest tenth of a
cent). The Purchase Price is subject to certain customary adjustments.
The foregoing description of the Acquisition and the Purchase Agreement and the
transactions contemplated thereby is not complete and is subject to and
qualified in its entirety by reference to the Purchase Agreement, which was
filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed on
December 16, 2019 and is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth under Item 2.01 regarding the Stock Issuance is
incorporated by reference into this Item 2.01. The Stock Issuance did not
involve a public offering and was exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") pursuant to
Section 4(a)(2) of the Securities Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth under Item 1.01 regarding the Stockholders' Agreement
is incorporated by reference into this Item 2.01. The description of the
Stockholders' Agreement is not complete and is qualified in its entirety by
reference to the complete text of the Stockholders' Agreement, a copy of which
is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Effective as of the Closing Date, pursuant to the terms of the Stockholders'
Agreement and as approved by the Board of Directors of the Company (the "Board")
on the Closing Date, D. Martin Phillips and Douglas E. Swanson, Jr. were
appointed to fill two new positions on the Board and to serve thereon as
independent directors. Accordingly, as of completion of the Acquisition, the
Board has 12 members, consisting of the ten individuals serving on the Board
prior to completion of the Acquisition, Mr. Phillips and Mr. Swanson. Mr.
Phillips and Mr. Swanson will receive the standard annual benefits paid to each
non-employee director which were disclosed in the Company's definitive proxy
statement for its 2019 Annual Meeting of Shareholders, filed with the SEC on
March 3, 2019.
Mr. Phillips is expected to serve on the Nominating, Governance, and
Environmental and Public Policy Committee. Mr. Swanson is expected to serve on
the Board's Compensation Committee.
Mr. Phillips and Mr. Swanson are not related to any officer or director of the
Company. With respect to each of Messrs. Phillips and Swanson, there are no
arrangements or understandings between such director and any other persons
pursuant to which he will serve as a director, other than the Stockholders'
Agreement. There are no transactions or relationships between either Mr.
Phillips or Mr. Swanson and the Company that would be required to be reported
under Item 404(a) of Regulation S-K.
Information with respect to the designations of Mr. Phillips and Mr. Swanson as
the initial Investor Directors that Felix Parent designated to the board of
directors of the Company immediately after the Closing, including biographical
information regarding these individuals, is set forth in the Proxy Statement
in the section entitled "Information About Felix-Felix Designated Directors" ,
which information is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On March 5, 2020, the Company held a special meeting (the "Special Meeting") of
its stockholders at which the proposals below were submitted. At the Special
Meeting, 362,922,162 shares of Common Stock, or approximately 87% of the shares
of Common Stock outstanding and entitled to vote at the Special Meeting, were
present in person or represented by proxy. The final voting results are
disclosed below.
(1) Approval of the Stock Issuance Proposal.
Shares Voted
For Against Abstentions
361,554,336 572,633 795,193
There were no broker non-votes on this proposal.
(2) Approval of the adjournment or postponement of the Special Meeting, if
necessary or appropriate to solicit additional proxies if there were
insufficient votes at the time of the Special Meeting to approve the Stock
Issuance Proposal.
Shares Voted
For Against Abstentions
326,316,010 35,703,731 902,421
Item 7.01 Regulation FD Disclosure.
On March 6, 2019, the Company issued a press release announcing the closing of
the Acquisition and other matters. A copy of this press release is attached
hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
The information furnished pursuant to this Item 7.01 and the accompanying
Exhibit 99.1 will be deemed to be "furnished" rather than "filed," pursuant to
the rules of the SEC.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired
The financial statements required by this Item, with respect to the acquisition
described in Item 2.01 herein, will be filed as soon as practicable, and in any
event not later than 71 days after the date on which this Current Report was
required to be filed pursuant to Item 2.01.
(b) Pro Forma Financial Information
The pro forma financial information required by this Item, with respect to the
acquisition in Item 2.01 herein, will be filed as soon as practicable, and in
any event not later than 71 days after the date on which this Current Report was
required to be filed pursuant to Item 2.01.
(c) Exhibits
Exhibit No. Document Description
2.1 Securities Purchase Agreement, dated as of December 15, 2019, by
and between Felix Investments Holdings II, LLC and WPX Energy,
Inc. (incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K filed with the Commission on December
16, 2019).
10.1 Stockholders' Agreement, by and among WPX Energy, Inc., Felix
Investment Holdings II, LLC, EnCap Energy Capital Fund X, L.P. and
certain members of Felix Energy Holdings II, LLC's management
team, dated as of March 6, 2020.
10.2 Registration Rights Agreement, by and between WPX Energy, Inc.
and Felix Investment Holdings II, LLC, dated as of March 6,
2020.
99.1 WPX Energy, Inc. press release dated March 6, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
© Edgar Online, source Glimpses
WPX ENERGY, INC. 
