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EXHIBIT 99.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of January 12,
2000 between U.S. Trust Corporation, a New York corporation ("Issuer"), and The
Xxxxxxx Xxxxxx Corporation, a Delaware corporation ("Grantee").
W I T N E S S E T H:
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WHEREAS, as a condition to, and simultaneously with, the execution
and delivery of this Agreement, Grantee, Patriot Merger Corporation, a New York
corporation ("Merger Sub"), and Issuer are entering into an Agreement and Plan
of Merger pursuant to which Merger Sub will merge with and into Issuer on the
terms and subject to the conditions set forth therein; and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined);
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase, subject to the terms hereof, up to 3,713,558 fully paid
and nonassessable shares ("Option Shares") of Issuer's Common Stock, par value
$1.00 per share ("Common Stock"), at a price of $125.00 per share (the "Option
Price"); provided, however, that in the event Issuer issues or agrees to issue
any shares of Common Stock (other than as permitted under the Merger Agreement)
at a price less than the Option Price (as adjusted pursuant to Section 5), the
Option Price shall be equal to such lesser price; provided further, that in no
event shall the number of shares of Common Stock for which this Option is
exercisable exceed 19.9% of the Issuer's issued and outstanding shares of Common
Stock. The number of shares of Common Stock that may be received upon the
exercise of the Option and the Option Price are subject to adjustment as herein
set forth.
(b) In the event that any additional shares of Common Stock
are issued or otherwise become outstanding after the date of this Agreement
(other than pursuant to this Agreement), the number of shares of Common Stock
subject to the Option shall be increased so that, after such issuance, such
number equals 19.9% of the number of shares of Common Stock then issued and
outstanding without giving effect to any shares subject or issued pursuant to
the Option. Nothing contained in this Section 1(b) or elsewhere in this
Agreement shall be deemed to authorize Issuer or Grantee to breach any provision
of the Merger Agreement.
2. (a) Grantee may exercise the Option, with respect to any or all
of the Option Shares, at any time and from time to time, after a Triggering
Event (as hereinafter defined) shall have occurred; provided, however, that the
Option will terminate and be of no further force or effect upon the earliest to
occur of: (i) the Effective Time (as defined in the Merger Agreement), (ii)
twelve months after the first occurrence of a Triggering Event and (iii)
termination of the Merger Agreement in accordance with the provisions thereof if
such termination occurs prior to the occurrence of a Triggering Event, unless,
in the case of clause (iii), Grantee has the right to
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receive a Termination Fee (as defined in the Merger Agreement) following such
termination upon the occurrence of certain events, in which case the Option will
not terminate until the later of (x) twelve months following the time such
Termination Fee first becomes payable and (y) the expiration of the time period
in which Grantee has such right or could obtain the right to receive a
Termination Fee. The date on which the Option terminates is referred to
hereinafter as the "Exercise Termination Event." Notwithstanding the occurrence
of an Exercise Termination Event, Grantee will be entitled to purchase the
Option Shares if it has exercised the Option in accordance with the terms hereof
prior to the Exercise Termination Event and the termination of the Option will
not affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
(b) A "Triggering Event" shall mean any event as a result of
which Grantee is entitled to receive the Termination Fee pursuant to Section
8.2(b) of the Merger Agreement by reason of all the conditions stated in Section
8.2(b) having been satisfied.
(c) Issuer shall notify Grantee promptly in writing of the
occurrence of any Triggering Event of which it has notice, 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.
(d) In the event Grantee is entitled to and wishes to exercise
the Option, it shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total number of
shares it will purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 60 business days from the Notice
Date for the closing of such purchase (the "Closing Date"); provided that, if
prior notification to or approval of the Federal Reserve Board or any other
regulatory agency is required in connection with such purchase, Grantee shall
promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have been
obtained and any requisite waiting period or periods shall have passed; provided
further, that the Closing Date shall not in any event be later than twelve
months after the Notice Date. Any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto.
(e) At the closing referred to in subsection (d) of this Section
2, Grantee shall pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer;
provided that, failure or refusal of Issuer to designate such a bank account
shall not preclude Grantee from exercising the Option.
(f) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (e) of this Section 2,
Issuer shall deliver to Grantee a certificate or certificates representing the
number of shares of Common Stock purchased by Grantee and, if the Option should
be exercised in part only, a new Option evidencing the rights of Grantee thereof
to purchase the balance of the shares purchasable hereunder, and Grantee shall
deliver to Issuer a letter agreeing that Grantee will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Agreement.
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(g) Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the registered
holder hereof and Issuer and to resale restrictions arising under
the Securities Act of 1933, as amended. A copy of such agreement is
on file at the principal office of Issuer and will be provided to
the holder hereof without charge upon receipt by Issuer of a written
request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act"), in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if Grantee shall have 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, to the effect that such legend is not required for purposes of the
1933 Act, (ii) the reference to the provisions of this Agreement in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the shares have been sold or transferred in compliance with the
provisions of this Agreement and under circumstances that do not require the
retention of such reference and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may be
required by law.
(h) Upon the giving by Grantee to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds,
Grantee shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to Grantee. Issuer shall pay
all expenses, and any and all United States federal, state and local taxes and
other charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of Grantee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock, (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer
(provided that compliance by Issuer with applicable law and regulation shall be
deemed to not be a voluntary act), (iii) promptly use best efforts to take all
action as may from time to time be required (including (x) complying with all
premerger notification, reporting and waiting period requirements specified in
15 U.S.C. Section 18(a) and regulations promulgated thereunder and (y) in the
event, under the Bank Holding Company Act of 1956, as amended (the "BHCA"), or
the Change in Bank Control Act of 1978, as amended, or any state banking law,
prior approval of or notice to the Federal Reserve Board, to the Office of
Thrift Supervision or to any state regulatory authority is necessary before the
Option may be exercised, cooperating fully
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with Grantee in preparing such applications or notices and providing such
information to the Federal Reserve Board or such state regulatory authority as
they may require) in order to permit Grantee to exercise the Option and Issuer
duly and effectively to issue shares of Common Stock pursuant hereto and (iv)
promptly to take all action provided herein to protect the rights of Grantee
against dilution.
4. 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 shall 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.
5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to Section 1 of
this Agreement, the number of shares of Common Stock purchasable upon the
exercise of the Option and the Option Price shall be subject to adjustment from
time to time as provided in this Section 5. In the event of any change in, or
distributions in respect of, the Common Stock by reason of stock dividends,
split-ups, mergers, recapitalizations, combinations, subdivisions, conversions,
exchanges of shares, distributions on or in respect of the Common Stock that
would be prohibited under the terms of the Merger Agreement, or the like, the
type and number of shares of Common Stock purchasable upon exercise hereof and
the Option Price shall be appropriately adjusted in such manner as shall fully
preserve the economic benefits provided hereunder and proper provision shall be
made in any agreement governing any such transaction to provide for such proper
adjustment and the full satisfaction of the Issuer's obligations hereunder.
6. Issuer shall, at the request of Grantee delivered within two
years after the exercise of the Option, promptly prepare, file and keep current
a shelf registration statement under the 1933 Act covering any Option Shares and
shall use its commercially reasonable efforts to cause such registration
statement to become effective and remain current in order to permit the sale or
other disposition of any Option Shares in accordance with any plan of
disposition requested by Grantee. Issuer will use its commercially reasonable
efforts to cause such registration statement first to become effective and then
to remain effective for such period not in excess of 180 days from the day such
registration statement first becomes effective or such shorter time as may be
reasonably necessary to effect such sales or other dispositions. Grantee shall
have the right to demand two such registrations. The foregoing notwithstanding,
if, at the time of any request by Grantee for registration of Option Shares as
provided above, Issuer is in registration with respect to an underwritten public
offering of shares of Common Stock, and if in the good faith judgment of the
managing underwriter or managing underwriters, or, if none, the sole underwriter
or underwriters, of such offering the inclusion of Grantee's Option Shares would
interfere with the successful marketing of the shares of Common Stock offered by
Issuer, the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; and provided, however, that after
any such required reduction the number of Option Shares to be included in such
offering for the account of Grantee shall constitute at least 25% of the total
number of shares to be sold by Grantee and Issuer in the aggregate; and provided
further, however, that if such reduction occurs, then Issuer shall file a
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registration statement for the balance as promptly as practical and no reduction
shall thereafter occur. Grantee shall provide all information reasonably
requested by Issuer for inclusion in any registration statement to be filed
hereunder. If requested by Grantee in connection with such registration, Issuer
shall become a party to any underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in secondary offering underwriting agreements for Issuer.
7. (a) At any time after the occurrence of a Repurchase Event (as
defined below), (i) at the request of Grantee, delivered prior to an Exercise
Termination Event, Issuer (or any successor thereto) shall repurchase the Option
from Grantee at a price (the "Option Repurchase Price") equal to the amount by
which (A) the Market Price (as defined below) exceeds (B) the Option Price,
multiplied by the number of shares for which this Option may then be exercised
and (ii) at the request of Grantee at any time it is the owner of Option Shares
(the "Owner"), delivered prior to an Exercise Termination Event, Issuer shall
repurchase such number of the Option Shares from the Owner as the Owner shall
designate at a price (the "Option Share Repurchase Price") equal to the Market
Price multiplied by the number of Option Shares so designated. The term "Market
Price" shall mean the average closing price for shares of Common Stock for the
five trading days ending on and including the trading day immediately preceding
the date Grantee gives notice of the required repurchase of this Option or the
Owner gives notice of the required repurchase of Option Shares, as the case may
be.
(b) Grantee and the Owner, as the case may be, may exercise its
right to require Issuer to repurchase the Option and any Option Shares pursuant
to this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that Grantee or
the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. Within the later to occur of (x) five business days after the
surrender of a copy of this Agreement and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto and (y) the
time that is immediately prior to the occurrence of a Repurchase Event, Issuer
shall deliver or cause to be delivered to Grantee the Option Repurchase Price
and/or to the Owner the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law and regulation
from so delivering.
(c) To the extent that Issuer is prohibited under applicable law
or regulation from repurchasing the Option and/or the Option Shares in full,
Issuer shall immediately so notify Grantee and/or the Owner and thereafter
deliver or cause to be delivered, from time to time, to Grantee and/ or the
Owner, as appropriate, the portion of the Option Repurchase Price and the Option
Share Repurchase Price, respectively, that it is no longer prohibited from
delivering, within five business days after the date on which Issuer is no
longer so prohibited; provided, however, that if Issuer at any time after
delivery of a notice of repurchase pursuant to paragraph (b) of this Section 7
is prohibited under applicable law or regulation from delivering to Grantee
and/or the Owner, as appropriate, the Option Repurchase Price and the Option
Share Repurchase Price, respectively, in full (and Issuer hereby undertakes to
use its best efforts to obtain all required regulatory and legal approvals and
to file any required notices as promptly as practicable in order to accomplish
such repurchase), Grantee or the Owner may revoke its notice
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of repurchase of the Option or the Option Shares either in whole or to the
extent of the prohibition, whereupon, in the latter case, Issuer shall promptly
(i) deliver to Grantee and/or the Owner, as appropriate, that portion of the
Option Repurchase Price or the Option Share Repurchase Price that Issuer is not
prohibited from delivering and (ii) deliver, as appropriate, either (A) to
Grantee, a new Stock Option Agreement evidencing the right of Grantee to
purchase that number of shares of Common Stock obtained by multiplying the
number of shares of Common Stock for which the surrendered Stock Option
Agreement was exercisable at the time of delivery of the notice of repurchase by
a fraction, the numerator of which is the Option Repurchase Price less the
portion thereof theretofore delivered to Grantee and the denominator of which is
the Option Repurchase Price, or (B) to the Owner, a certificate for the Option
Shares it is then so prohibited from repurchasing.
(d) For purposes of this Section 7, a "Repurchase Event" shall be
deemed to have occurred (i) upon the consummation of any merger, consolidation
or similar transaction involving Issuer or any purchase, lease or other
acquisition of all or a substantial portion of the assets of Issuer, other than
any merger, consolidation, purchase or similar transaction involving only Issuer
and one or more of its Subsidiaries (as defined in the Merger Agreement) or
involving only two or more of such Subsidiaries or (ii) upon the acquisition by
any person of beneficial ownership of 50% or more of the then outstanding shares
of Common Stock, provided that no such event shall constitute a Repurchase Event
unless a Triggering Event shall have occurred prior to an Exercise Termination
Event. Grantee will be entitled to exercise its rights under this Section 7 if
it has exercised such rights in accordance with the terms hereof prior to the
termination of the Option.
8. (a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person, other than Grantee or one of its Subsidiaries, to merge into
Issuer and Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Common Stock shall
be changed into or exchanged for stock or other securities of any other person
or cash or any other property or the then outstanding shares of Common Stock
shall after such merger represent less than 50% of the outstanding voting shares
and voting share equivalents 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 shall make proper provision so that the Option shall,
upon the consummation of any such transaction (the date of such consummation the
"Consummation Date") and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"), at the
election of Grantee, of either (x) the Acquiring Corporation (as hereinafter
defined) or (y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or surviving
person and (iii) the transferee of all or substantially all of Issuer's assets.
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(ii) "Substitute Common Stock" shall mean the common stock
issued by the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the Market Price, as
defined in Section 7, as of the Consummation Date.
(iv) "Average Price" shall mean the average closing price of
a share of the Substitute Common Stock for the 30 trading days immediately
preceding the Consummation Date; provided that, if Issuer is the issuer of the
Substitute Option, the Average Price shall equal the Assigned Value.
(c) The Substitute Option shall have the same terms as the
Option; provided that, if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Grantee. The issuer of the Substitute
Option shall also enter into an agreement (the "Substitute Option Agreement")
with Grantee of the Substitute Option in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock as is equal to the Assigned Value multiplied
by the number of shares of Common Stock for which the Option is then
exercisable, divided by the Average Price. The exercise price of the Substitute
Option per share of Substitute Common Stock shall then be equal to the Option
Price multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock for which the Option is then exercisable and the
denominator of which shall be the number of shares of Substitute Common Stock
for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute Option.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.
9. (a) For the purposes hereof Total Gain as of any date shall be
the aggregate of all amounts (before taxes) received by Grantee hereunder as (i)
the Option Repurchase Price, (ii) the excess of (A) the Option Share Repurchase
Price over (B) the aggregate amount of the Option Price paid for the shares for
which Grantee receives the Option Share Repurchase Price and (iii) the Sale
Proceeds. For the purposes hereof Sale Proceeds shall be the excess of (A) the
net proceeds (before taxes, but after deducting brokerage commissions and other
similar customary sales expenses) from the sale (other than a sale to Issuer (or
any successor thereto) pursuant to Section 7) of Option Shares or any portion
thereof over (B) the aggregate amount of exercise price paid for such Option
Shares. In determining the amount of the Sale Proceeds, the value of any
non-cash consideration received for the sale of the Option Shares shall be, (i)
for securities listed on a national securities exchange or traded on the Nasdaq
National Market, the average closing price per share of such security as
reported on such exchange or the Nasdaq
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National Market for the five trading days prior to the date of delivery of such
consideration to Grantee and (ii) for other securities or property, the value as
determined by a nationally recognized independent investment banking firm
mutually agreed upon by Grantee and Issuer. In the event that the Option is
converted into a Substitute Option pursuant to Section 8, the provision of the
applicable Substitute Option Agreement corresponding to this Section 9(a) shall
provide that the Total Gain with respect to such Substitute Option shall include
in its aggregate amount the Total Gain with respect to this Option as determined
pursuant to this Section 9(a).
(b) If at any time the aggregate amount of (x) the Total Gain and
(y) any Termination Fee paid to Grantee pursuant to Section 8.2(b) of the Merger
Agreement shall exceed $150 million, Grantee at its sole election shall (i)
deliver cash to Issuer, (ii) authorize Issuer to reduce the amount then payable
to Grantee under Section 7, (iii) agree to cancel a portion of the Option, (iv)
deliver Common Stock to Issuer (the shares so delivered being deemed to have a
per share value equal to the closing price of the Common Stock on the day prior
to the day of the event giving rise to the requirement to make such payment) or
(v) any combination thereof so that Grantee's realized Total Gain when
aggregated with such Termination Fee so paid to Grantee no longer exceeds $150
million after taking into account the foregoing actions.
(c) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of shares as would, as of the date of
exercise, result in a Notional Total Gain (as defined below) which, together
with any Termination Fee theretofore paid to Grantee would exceed $150 million;
provided that, nothing in this sentence shall restrict any exercise of the
Option permitted hereby on any subsequent date.
(d) As used herein, the term "Notional Total Gain" with respect
to any number of shares as to which Grantee may propose to exercise the Option
shall be the Total Gain determined as of the date of such proposal assuming that
the Option were exercised on such date for such number of shares and assuming
that such shares, together with all other Option Shares held by Grantee and its
affiliates as of such date, were sold for cash at the closing market price for
the Common Stock as of the close of business on the preceding trading day (less
customary brokerage commissions).
10. The period for exercise of certain rights under Sections 2, 6
and 7 shall be extended to the extent necessary to avoid liability under Section
16(b) of the 1934 Act by reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full 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 have been duly and validly authorized by the
Board of Directors of Issuer and no other corporate proceedings on the part of
Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
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(b) Issuer has taken all necessary corporate action to authorize
and reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant hereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any preemptive rights.
(c) Issuer has taken all action (including, if required,
redeeming all of the rights outstanding under, or amending or terminating, the
PATRIOT Rights Agreement) so that the entering into of this Agreement, the
acquisition of shares of Common Stock hereunder and the other transactions
contemplated hereby do not and will not result in the grant of any rights to any
person under the PATRIOT Rights Agreement or enable or require the rights
outstanding thereunder to be exercised, distributed or triggered.
12. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Grantee. This Agreement has been duly executed and delivered by Grantee.
(b) The Option is not being, and any shares of Common Stock or
other securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the 1933 Act.
13. Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party.
14. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation making application to list the
shares of Common Stock issuable hereunder on the New York Stock Exchange upon
official notice of issuance and applying to the Federal Reserve Board under the
BHCA for approval to acquire the shares issuable hereunder, but Grantee shall
not be obligated to apply to state banking authorities for approval to acquire
the shares of Common Stock issuable hereunder until such time, if ever, as it
deems appropriate to do so.
15. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and that
the obligations of the parties hereto shall be enforceable by either party
hereto through injunctive or other equitable relief.
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16. If any term, provision, covenant or restriction contained in
this Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that Grantee is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section 1(a) hereof (as adjusted pursuant to Sections 1(b) or 5
hereof), it is the express intention of Issuer to allow Grantee to acquire or to
require Issuer to repurchase such lesser number of shares as may be permissible,
without any amendment or modification hereof.
17. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
cable, telegram, telecopy or telex, or by registered or certified mail (postage
prepaid, return receipt requested) at the respective addresses of the parties
set forth in the Merger Agreement.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
19. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
20. Except as otherwise expressly provided herein, each of the
parties hereto shall 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.
21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.
22. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
THE XXXXXXX XXXXXX CORPORATION
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Co-Chief
Executive Officer
U.S. TRUST CORPORATION
By: /s/ H. XXXXXXXX XXXXXXX
-----------------------------------
Name: H. Xxxxxxxx Xxxxxxx
Title: Chairman and
Chief Executive Officer
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