EXHIBIT 99.2
STOCK OPTION AGREEMENT
This Stock Option Agreement dated as of March 23, 1999 (the "Agreement"),
by and between Texas Central Bancshares, Inc., a Texas corporation ("Issuer"),
and Bank United Corp., a Delaware corporation ("Grantee").
R E C I T A L S
A. Grantee, BUC Acquisition Corp. II, a wholly owned subsidiary of Grantee
("Sub"), and Issuer have entered into an Agreement and Plan of Reorganization
dated as of the date hereof (the "Reorganization Agreement"; capitalized terms
used but not defined herein have the meanings set forth in the Reorganization
Agreement) providing for, among other things, the merger of Sub with and into
Issuer, with Issuer as the surviving corporation in the merger and becoming a
wholly owned subsidiary of Grantee (the "Acquisition Merger"); and
B. As a condition and inducement to Grantee's willingness to enter into
the Reorganization Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Issuer
and Grantee agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 60,464 (as adjusted as set forth herein) shares (the "Option Shares") of
common stock, par value $1.00 per share ("Issuer Common Stock"), of Issuer at a
purchase price of $49.83 (as adjusted as set forth herein) per Option Share (the
"Purchase Price"); PROVIDED, HOWEVER, that in no event shall the number of
Option Shares for which the Option is exercisable exceed 19.9% of the issued and
outstanding shares of Issuer Common Stock excluding, for purposes of this
calculation, any shares subject to or issued pursuant to the Option.
2. EXERCISE OF OPTION. (a) Subject to the provisions of Section 2(f),
Grantee may exercise the Option, with respect to any or all of the Option
Shares, at any time or from time to time, but only following the occurrence of a
Purchase Event, as defined below; PROVIDED, HOWEVER, that (i) except as provided
in the last sentence of this Section 2(a), the Option will terminate and be of
no further force and effect upon the earliest to occur of (A) the Effective
Time, (B) fifteen (15) business days after the first occurrence of a Purchase
Event, and (C) termination of the Reorganization Agreement in accordance with
its terms prior to the occurrence of a Purchase Event, and (ii) any purchase of
Option Shares upon exercise of the Option will be subject to compliance with the
applicable regulations of the Federal Reserve Board, the Office of Thrift
Supervision and other agencies having jurisdiction over the Issuer's sale, and
the Grantee's acquisition, of the Option Shares, and the obtaining or making of
any consents, approvals, orders, notifications, filings or authorizations, the
failure of which to have obtained or made would have the effect of making the
issuance of Option Shares to Grantee illegal (the "Regulatory Approvals").
Notwithstanding the
termination of the Option, Grantee will be entitled to purchase the Option
Shares or exercise its Cash-Out Right (as defined below) if it has given notice
of same in accordance with the terms hereof prior to the termination of the
Option and the termination of the Option will not affect any rights hereunder or
under the Reorganization Agreement which by their terms do not terminate or
expire prior to or as of such termination.
(b) As used herein, a "Purchase Event" means any of the following
events:
(i) Without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any subsidiary of Grantee) to
effect an Acquisition Transaction (as defined below). As used herein, the
term "Acquisition Transaction" shall mean (A) a merger, consolidation,
statutory share exchange or similar transaction involving Issuer or any of
its subsidiaries (other than transactions solely between Issuer's
subsidiaries), (B) the disposition, by sale, lease, exchange or otherwise,
of assets of Issuer or any of its subsidiaries representing in either case
10% or more of the consolidated assets of Issuer and its subsidiaries, or
(C) the issuance, sale or other disposition of (including by way of
merger, consolidation, share exchange or any similar transaction)
securities representing 20% or more of the voting power of Issuer or any
of its subsidiaries; or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is defined
in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of, or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under the Exchange
Act) shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of, 30% or more (or, if such person or group
is the beneficial owner of 30% or more on the date hereof, such person or
group acquires an additional 5% or more) of the voting power of Issuer or
any of its subsidiaries ;PROVIDED, that the acquisition of beneficial
ownership, or a right to acquire beneficial ownership, by any person or
group (other than Grantee or a subsidiary of Grantee) of 30% or more (or,
if such person or group is the beneficial owner of 30% or more on the date
hereof, such person or group shall acquire an additional 5% or more) of
the voting power of the Issuer or any of its subsidiaries that results
from the acquisition of such voting power by such person or group after
the date hereof pursuant to the last will or laws of intestate succession
of a shareholder of Issuer shall not be deemed a Purchase Event hereunder
so long as, after giving effect to such acquisition, at least two-thirds
of the voting power of the Issuer remains subject to the several Voting
Agreements and Irrevocable Proxies of even date herewith by and between
certain shareholders of the Issuer and the Grantee.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
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(i) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2 under
the Exchange Act) or shall have filed a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
a tender offer or exchange offer to purchase any shares of Issuer Common
Stock such that, upon consummation of such offer, such person would
beneficially own 30% or more of the then outstanding shares of Issuer
Common Stock (such an offer being referred to herein as a "Tender Offer"
or an "Exchange Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have
approved the Reorganization Agreement at the meeting of such shareholders
held for the purpose of voting on the Reorganization Agreement, or such
meeting shall not have been held or shall have been canceled prior to
termination of the Reorganization Agreement, or the Issuer's Board of
Directors shall have withdrawn or modified in a manner adverse to Grantee
the recommendation of Issuer's Board of Directors with respect to the
Reorganization Agreement, in each case, after it shall have been publicly
announced that any person (other than Grantee or any subsidiary of
Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction, (B) commenced a Tender
Offer or filed a registration statement under the Securities Act with
respect to an Exchange Offer or (C) filed an application (or given a
notice), whether in draft or final form, under any applicable law or
regulation, including without limitation, the Bank Holding Company Act of
1956, the Bank Merger Act, the Change in Bank Control Act of 1978 or the
savings and loan holding company provisions of the Home Owner's Loan Act
for approval to engage in an Acquisition Transaction.
As used in this Agreement, the term "person" shall have the meaning specified in
Section 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event, it being
understood that the giving of such notice by Issuer shall not be a condition to
the right of Grantee to exercise the Option.
(e) In the event that Grantee is entitled to and wishes to exercise
the Option, it will send to Issuer a written notice (an "Exercise Notice"; the
date of which being herein referred to as the "Notice Date") to that effect and
which Exercise Notice also specifies the number of Option Shares, if any,
Grantee wishes to purchase pursuant to this Section 2(b), the number of Option
Shares, if any, with respect to which Grantee wishes to exercise its Cash-Out
Right (as defined herein) pursuant to Section 6(c), the denominations of the
certificate or certificates evidencing the Option Shares which Grantee wishes to
purchase pursuant to this Section 2(b) and a date (an "Option Closing Date"),
subject to the following sentence, not earlier than seven business days nor
later than 20 business days from the Notice Date for the closing of such
purchase (an "Option Closing"). Any Option Closing will be at an agreed location
and time in Houston, Texas on the applicable Option Closing Date or at such
later date as may be necessary so as to comply with the first sentence of
Section 2(a).
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(f) Notwithstanding anything to the contrary contained herein, any
exercise of the Option and purchase of Option Shares shall be subject to
compliance with applicable laws and regulations, which may prohibit the purchase
of all the Option Shares specified in the Exercise Notice without first
obtaining or making the required Regulatory Approvals. In such event, if the
Option is otherwise exercisable and Grantee wishes to exercise the Option, the
Option may be exercised in accordance with Section 2(b) and Grantee shall
acquire the maximum number of Option Shares specified in the Exercise Notice
that Grantee is then permitted to acquire under the applicable laws and
regulations, and if Grantee thereafter obtains the Regulatory Approvals to
acquire the remaining balance of the Option Shares specified in the Exercise
Notice, then Grantee shall be entitled to acquire such remaining balance. Issuer
agrees to use its reasonable efforts to assist Grantee in obtaining the
Regulatory Approvals.
In the event (i) Grantee receives official notice that a Regulatory
Approval required for the purchase of any Option Shares will not be issued or
granted or (ii) such Regulatory Approval has not been issued or granted within
six months of the date of the Exercise Notice, Grantee shall have the right to
exercise its Cash-Out Right pursuant to Section 6(c) with respect to the Option
Shares for which such Regulatory Approval will not be issued or granted or has
not been issued or granted.
3. PAYMENT AND DELIVERY OF CERTIFICATES. (a) At any Option Closing,
Grantee will pay to Issuer in immediately available funds by wire transfer to a
bank account designated in writing by Issuer an amount equal to the Purchase
Price multiplied by the number of Option Shares to be purchased at such Option
Closing plus the amount of any transfer, stamp or other similar taxes or charges
imposed in connection therewith.
(b) At any Option Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer will deliver to
Grantee a certificate or certificates representing the Option Shares to be
purchased at such Option Closing, which Option Shares will be free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever. If at the
time of issuance of Option Shares pursuant to an exercise of the Option
hereunder, Issuer shall have issued any securities similar to rights under a
stockholder rights plan, then each Option Share issued pursuant to such exercise
will also represent such a corresponding right with terms substantially the same
as and at least as favorable to Grantee as are provided under any such
stockholder rights plan then in effect.
(c) Certificates for the Option Shares delivered at an Option
Closing will have typed or printed thereon a restrictive legend which will read
substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF MARCH 23,
1999, A COPY OF WHICH MAY BE OBTAINED FROM
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THE SECRETARY OF TEXAS CENTRAL BANCSHARES, INC. AT ITS PRINCIPAL EXECUTIVE
OFFICES."
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend will be removed by delivery of substitute
certificate(s) without such reference if such Option Shares have been registered
pursuant to the Securities Act, such Option Shares have been sold in reliance on
and in accordance with Rule 144 under the Securities Act or Grantee has
delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion
of counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act and (ii) the reference to restrictions pursuant to this Agreement
in the above legend will be removed by delivery of substitute certificate(s)
without such reference if the Option Shares evidenced by certificate(s)
containing such reference have been sold or transferred in compliance with the
provisions of this Agreement under circumstances that do not require the
retention of such reference.
4. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents and
warrants to Grantee that (i) Issuer has taken all necessary corporate and other
action to authorize and reserve and, subject to the receipt of any required
Regulatory Approvals, to permit it to issue the Option Shares; (ii) at all times
from the date hereof until the obligation to deliver Option Shares upon the
exercise of the Option terminates, Issuer shall have reserved for issuance, upon
exercise of the Option, shares of Issuer Common Stock necessary for Grantee to
exercise the Option, and Issuer will take all necessary corporate action to
authorize and reserve for issuance all additional shares of Issuer Common Stock
or other securities which may be issued pursuant to Section 6 upon exercise of
the Option; and (iii) the shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer Common Stock
or other securities which may be issuable upon exercise of the Option or any
other securities which may be issued pursuant to Section 6, upon issuance
pursuant hereto, will be duly and validly issued, fully paid and nonassessable,
and will be delivered free and clear of all liens, claims, charges and
encumbrances of any kind or nature whatsoever, including without limitation any
preemptive rights of any stockholder of Issuer.
5. REPRESENTATION AND WARRANTY OF GRANTEE. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option will be acquired for investment and will not
be transferred or otherwise disposed of except in a transaction registered, or
exempt from registration, under the Securities Act.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. (a) In the event of any
change in Issuer Common Stock by reason of a stock dividend, split-up, merger,
recapitalization, combination, exchange of shares, or similar transaction, the
type and number of shares or securities subject to the Option, and the Purchase
Price thereof, will be adjusted appropriately, and proper provision will be made
in the agreements governing such transaction, so that Grantee will receive upon
exercise of the Option the number and class of shares or other securities or
property that Grantee would have received in respect of Issuer Common Stock if
the Option had been exercised immediately prior to such event or the record date
therefor, as applicable. Subject to Section 1, and without limiting the parties'
relative rights and obligations under the Reorganization Agreement, if any
additional shares
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of Issuer Common Stock are issued after the date of this Agreement (other than
pursuant to an event described in the first sentence of this Section 6(a)), the
number of shares of Issuer Common Stock subject to the Option will be adjusted
so that, after such issuance, it equals 19.9% of the number of shares of Issuer
Common Stock then issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) Without limiting the parties' relative rights and obligations
under the Reorganization Agreement, in the event that Issuer enters into an
agreement (i) to consolidate with or merge into any person, other than Grantee
or one of its subsidiaries, and Issuer will not be the continuing or surviving
corporation in such consolidation or merger, (ii) to permit any person, other
than Grantee or one of its subsidiaries, to merge into Issuer and Issuer will be
the continuing or surviving corporation, but in connection with such merger, the
shares of Issuer Common Stock outstanding immediately prior to the consummation
of such merger will be changed into or exchanged for stock or other securities
of Issuer or any other person or cash or any other property, or the shares of
Issuer Common Stock outstanding immediately prior to the consummation of such
merger will, after such merger, represent less than 50% of the outstanding
voting securities of the merged company, or (iii) to sell or otherwise transfer
all or substantially all of its assets to any person, other than Grantee or one
of its subsidiaries, then, and in each such case, the agreement governing such
transaction will make proper provision so that the Option will, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option with identical terms
appropriately adjusted to acquire the number and class of shares or other
securities or property that Grantee would have received in respect of Issuer
Common Stock if the Option had been exercised immediately prior to such
consolidation, merger, sale, or transfer, or the record date therefor, as
applicable and make any other necessary adjustments.
(c) If, at any time during the period commencing on a Purchase Event
and ending on the termination of the Option in accordance with Section 2,
Grantee sends to Issuer an Exercise Notice indicating Grantee's election to
exercise its right (the "Cash-Out Right") pursuant to this Section 6(c), then
Issuer shall pay to Grantee, on the Option Closing Date, in exchange for the
cancellation of the Option with respect to such number of Option Shares as
Grantee specifies in the Exercise Notice: (i) if the Purchase Event is one
specified in Section 2(b)(i)(A) or Section 2(b)(i)(B), an amount in cash equal
to the product obtained by multiplying the number of Option Shares specified in
the Exercise Notice by the difference between (A) the highest price per share
paid or to be paid for the Issuer Common Stock in the Purchase Event and (B) the
Purchase Price; or (ii) in the case of any other Purchase Event, an amount in
cash equal to the number of Option Shares specified in the Exercise Notice
multiplied by the difference between (Y) the product obtained by multiplying the
number of shares of BUC common stock into which a share of TCBI common stock
would have been converted in the merger by the average of the daily reported
closing sales prices for a share of the Class A Common Stock of Grantee in The
NASDAQ Stock Market National Market for the twenty successive trading days
ending on the trading day that is one trading day prior to the date of the
Exercise Notice and (Z) the Exercise Price. Notwithstanding the termination of
the Option, Grantee will be entitled to exercise its rights under this Section
6(c) if it has exercised such rights in accordance with the terms hereof prior
to the termination of the Option.
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7. LISTING. If Issuer Common Stock or any other securities to be acquired
upon exercise of the Option are then listed on any national securities exchange
or interdealer securities quotation system), Issuer, upon the request of
Grantee, will promptly file an application to list the shares of Issuer Common
Stock or other securities to be acquired upon exercise of the Option on any such
national securities exchange or interdealer securities quotation system) and
will use reasonable efforts to obtain approval of such listing as promptly as
practicable.
8. LOSS OR MUTILATION. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered will constitute an
additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed, or mutilated shall at any time be
enforceable by anyone.
9. MISCELLANEOUS.
(a) EXPENSES. Each of the parties hereto will bear and pay all costs
and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants, and counsel.
(b) AMENDMENT. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) EXTENSION; WAIVER. Any agreement on the part of a party to waive
any provision of this Agreement, or to extend the time for performance, will be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise will not constitute a waiver of such rights.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
and the Reorganization Agreement (including the documents and instruments
attached thereto as exhibits or schedules or delivered in connection therewith)
(i) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement, and (ii) are not intended to confer upon any
person other than the parties any rights or remedies.
(e) GOVERNING LAW. This Agreement will be governed by, and construed
in accordance with, the laws of the State of Texas, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws thereof.
(f) NOTICES. All notices, requests, claims, demands, and other
communications under this Agreement shall be sent in the manner and to the
addresses set forth in the Reorganization Agreement.
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(g) ASSIGNMENT. Neither this Agreement, the Option nor any of the
rights, interests, or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by Issuer or
Grantee without the prior written consent of the other. Any assignment or
delegation in violation of the preceding sentence will be void. Subject to the
first and second sentences of this Section 11(g), this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and permitted assigns.
(h) FURTHER ASSURANCES. In the event of any exercise of the Option
by Grantee, Issuer and Grantee will execute and deliver all other documents and
instruments and take all other actions that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(i) ENFORCEMENT. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Texas or in Texas state court, the foregoing being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit itself to the personal jurisdiction
of any Federal court located in the State of Texas or any Texas state court in
the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (ii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, and (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than a Federal court sitting in the State of Texas or a Texas state court.
(j) SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first written above.
TEXAS CENTRAL BANCSHARES, INC.
/s/ XXXXXXX X. XXXX
By: XXXXXXX X. XXXX
Its: CHAIRMAN
BANK UNITED CORP.
/s/ XXXXX X. XXXXXXXXXX
By: XXXXX X. XXXXXXXXXX
Its: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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