JSB FINANCIAL, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 16, 1999
("Agreement"), by and between JSB Financial, Inc., a Delaware corporation
("Issuer"), and North Fork Bancorporation, Inc., a Delaware
corporation ("Grantee").
RECITALS
A. The Agreement and Plan of Merger. Grantee and Issuer have
entered into an Agreement and Plan of Merger, dated as of August 16, 1999
("Merger Agreement"), providing for, among other things, the merger of
Issuer with and into Grantee, with Grantee being the surviving
corporation.
B. Condition to Agreement and Plan of Merger. As a condition
and an inducement to Grantee's execution and delivery of the Merger
Agreement, Grantee has required that Issuer agree, and Issuer has agreed,
to grant Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, and intending to be legally bound
hereby, Issuer and Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option
("Option") to purchase up to 1,848,092 shares of common stock, par value
$.01 per share ("Issuer Common Stock"), of Issuer (as adjusted as set forth
herein, the "Option Shares," which shall include the Option Shares before
and after any transfer of such Option Shares, but in no event shall the
number of Option Shares for which this Option is exercisable exceed 19.9%
of the issued and outstanding shares of Issuer Common Stock), at a purchase
price per Option Share (as adjusted as set forth herein, the "Purchase
Price") equal to $58.75.
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the agreements
or covenants contained in this Agreement or the Merger Agreement, and (ii)
no preliminary or permanent injunction or other order against the delivery
of shares covered by the Option issued by any court of competent
jurisdiction in the United States shall be in effect, the Holder may
exercise the Option, in whole or in part, at any time and from time to
time, following the occurrence of a Purchase Event (as hereinafter
defined); provided, that, the Option shall terminate and be of no further
force or effect upon the earliest to occur of (A) the Effective Time, (B)
termination of the Merger Agreement in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary Purchase Event
other than a termination thereof by Grantee pursuant to Section 6.1(b)(ii)
of the Merger Agreement (a termination of the Merger Agreement by Grantee
pursuant to Section 6.1(b)(ii) of the Merger Agreement, being referred to
herein as a "Default Termination"), (C) 18 months after a Default
Termination or (D) 18 months after termination of the Merger Agreement
(other than a Default Termination) following the occurrence of a Purchase
Event or a Preliminary Purchase Event; provided, however, that any purchase
of shares upon exercise of the Option shall be subject to compliance with
applicable law; provided further, however, that if the Option cannot be
exercised on any day because of an injunction, order or similar restraint
issued by a court of competent jurisdiction, the period during which the
Option may be exercised shall be extended so that the Option shall expire
no earlier than the tenth business day after such injunction, order or
restraint shall have been dissolved or when such injunction, order or
restraint shall have become permanent and no longer subject to appeal, as
the case may be. The term "Holder" shall mean the holder or holders of the
Option from time to time, and which initially is Grantee. The rights set
forth in Sections 8 and 9 of this Agreement shall terminate when the right
to exercise the Option and Substitute Option terminate (other than as a
result of a complete exercise of the Option) as set forth herein.
(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
Issuer shall have entered into an agreement with any person (other
than Grantee or any subsidiary of Grantee) to effect (A) a merger,
consolidation or similar transaction involving Issuer or any of its
significant subsidiaries, (B) the disposition, by sale, lease,
exchange or otherwise, of assets or deposits of Issuer or any of
its significant subsidiaries representing in either case 10% or
more of the consolidated assets or deposits of Issuer and its
subsidiaries, other than in the ordinary course of business, or (C)
the issuance, sale or other disposition by Issuer of (including by
way of merger, consolidation, share exchange or any similar
transaction) securities representing 10% or more of the voting
power of Issuer or any of its significant subsidiaries (each of
(A), (B) or (C), an "Acquisition Transaction"); 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 under the Securities Exchange Act of 1934,
as amended ("Exchange Act")) of, or the right to acquire beneficial
ownership of, or any "group" (as such term is defined in Section
13(d)(3) of the Exchange Act), other than a group of which Grantee
or any subsidiary of Grantee is a member, shall have been formed
which beneficially owns, or has the right to acquire beneficial
ownership of, 10% or more of the voting power of Issuer or any of
its significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any
of the following events:
(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,
("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 own or control 10% 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 stockholders of Issuer shall not have
approved the Merger Agreement by the requisite vote at the meeting
of the stockholders of the Issuer required to be called to approve
the Merger Agreement ("Issuer Meeting"), the Issuer Meeting shall
not have been held or shall have been canceled prior to termination
of the Merger Agreement or 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
Merger 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
bona fide 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 the Bank Holding Company Act of 1956, as amended ("BHC Act"),
the Home Owners' Loan Act of 1933, as amended ("HOLA"), the Bank
Merger Act, as amended ("BMA") or the Change in Bank Control Act of
1978, as amended ("CBCA"), for approval to engage in an Acquisition
Transaction; or
(iii) Any person (other than Grantee or any
subsidiary of Grantee) shall have made a bona fide proposal to
Issuer or its stockholders by public announcement, or written
communication that is or becomes the subject of public disclosure,
to engage in an Acquisition Transaction; or
(iv) After a proposal is made by a third party to
Issuer or its stockholders to engage in an Acquisition Transaction,
or such third party states its intention to the Issuer to make such
a proposal if the Merger Agreement terminates, and thereafter
Issuer shall have breached any representation, warranty, covenant
or agreement contained in the Merger Agreement and such breach
would entitle Grantee to terminate the Merger Agreement under
Section 6.1(b) thereof (without regard to the cure period provided
for therein unless such cure is promptly effected without
jeopardizing consummation of the Merger pursuant to the terms of
the Merger Agreement).
As used in this Agreement, the term "person" shall have the
meaning specified in Sections 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 of which it
has knowledge, it being understood that the giving of such notice by Issuer
shall not be a condition to the right of Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option, it
shall send to Issuer a written notice (the "Option Notice," the date of
which being herein referred to as the "Notice Date") specifying (i) the
total number of Option Shares it intends to purchase pursuant to such
exercise and (ii) a place and date not earlier than three business days nor
later than 15 business days from the Notice Date for the closing
("Closing") of such purchase ("Closing Date"); provided, that the first
Option Notice shall be sent to Issuer within 180 days after the first
Purchase Event of which Grantee has been notified. If prior notification to
or approval of any Governmental Entity is required in connection with any
such purchase, Issuer shall cooperate with the Holder in the filing of the
required notice of application for approval and the obtaining of such
approval, and the Closing shall occur promptly following such regulatory
approvals and any mandatory waiting periods. Any exercise of the Option
shall be deemed to occur on the Notice Date relating thereto.
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated
by Issuer, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 13(f) of this Agreement.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a) of this Agreement, (i) Issuer shall deliver to Holder (A) a
certificate or certificates representing the Option Shares to be purchased
at such Closing, which Option Shares shall be free and clear of all liens
(as defined in the Merger Agreement) and subject to no preemptive rights,
and (B) if the Option is exercised in part only, an executed new agreement
with the same terms as this Agreement evidencing the right to purchase the
balance of the shares of Issuer Common Stock purchasable hereunder, and
(ii) Holder shall deliver to Issuer a letter agreeing that Holder shall not
offer to sell or otherwise dispose of such Option Shares in violation of
applicable federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT
DATED AS OF AUGUST 16, 1999. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE
ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the portion of the above legend relating
to the Securities Act shall be removed by delivery of substitute
certificate(s) without such legend if Holder shall have delivered to Issuer
a copy of a letter from the staff of the Securities and Exchange Commission
("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.
(d) Upon the giving by Holder to Issuer of an Option Notice,
the tender of the applicable purchase price in immediately available funds
and the tender of this Agreement to Issuer, Holder shall be deemed to be
the holder of record of the shares of Issuer 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
Issuer Common Stock shall not then be actually delivered to Holder. 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, issuance and delivery of stock certificates under this Section
4 in the name of Holder or its assignee, transferee or designee.
(e) Issuer agrees (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued or treasury
shares of Issuer Common Stock so that the Option may be exercised without
additional authorization of Issuer Common Stock after giving effect to all
other options, warrants, convertible securities and other rights to
purchase Issuer 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, (iii) promptly
to take all action as may from time to time be required (including (A)
complying with all premerger notification, reporting and waiting period
requirements and (B) in the event prior approval of or notice to any
Governmental Entity is necessary before the Option may be exercised,
cooperating fully with Holder in preparing such applications or notices and
providing such information to such Governmental Entity as it may require)
in order to permit Holder to exercise the Option and Issuer duly and
effectively to issue shares of Issuer Common Stock pursuant hereto and (iv)
promptly to take all action provided herein to protect the rights of Holder
against dilution.
5. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee (and Holder, if different than Grantee)
as follows:
(a) Corporate Authority. 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 contemplated by this Agreement. This
Agreement has been duly and validly executed and delivered by
Issuer.
(b) Beneficial Ownership. To the best knowledge of Issuer,
as of the date of this Agreement, no person or group has beneficial
ownership of more than 10% of the issued and outstanding shares of
Issuer Common Stock.
(c) Shares Reserved for Issuance; Capital Stock. Issuer has
taken all necessary corporate action to authorize and reserve and
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 Issuer Common Stock equal to the maximum
number of shares of Issuer Common Stock at any time and from time
to time purchasable upon exercise of the Option, and all such
shares, upon issuance pursuant to the Option, will be duly
authorized, validly issued, fully paid and nonassessable, and will
be delivered free and clear of all claims, liens, encumbrances and
security interests (other than those created by this Agreement) and
not subject to any preemptive rights.
(d) No Violations. The execution, delivery and performance
of this Agreement does not and will not, and the consummation by
Issuer of any of the transactions contemplated hereby will not,
constitute or result in (i) a breach or violation of, or a default
under, its Certificate of Incorporation or By-Laws, or the
comparable governing instruments of any of its subsidiaries, or
(ii) a breach or violation of, or a default under, any agreement,
lease, contract, note, mortgage, indenture, arrangement or other
obligation of it or any of its subsidiaries (with or without the
giving of notice, the lapse of time or both) or under any law,
rule, ordinance or regulation or judgment, decree, order, award or
governmental or non-governmental permit or license to which it or
any of its subsidiaries is subject, that would, in any case, give
any other person the ability to prevent or enjoin Issuer's
performance under this Agreement in any material respect.
6. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that Grantee has full corporate power and
authority to enter into this Agreement and, subject to obtaining the
approvals referred to in this Agreement, to consummate the transactions
contemplated by this Agreement; 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; and this Agreement has been duly executed and delivered by
Grantee.
7. Adjustment upon Changes in Issuer Capitalization, Etc.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number
of shares or securities subject to the Option, and the Purchase Price
therefor, shall be adjusted appropriately, and proper provision shall be
made in the agreements governing any such transaction so that Holder shall
receive, upon exercise of the Option, the number and class of shares or
other securities or property that Holder 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. If any additional
shares 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 7(a), upon exercise of any option to purchase Issuer Common Stock
outstanding on the date hereof or upon conversion into Issuer Common Stock
of any convertible security of Issuer outstanding on the date hereof), the
number of shares of Issuer Common Stock subject to the Option shall be
adjusted so that, after such issuance, the Option, together with any shares
of Issuer Common Stock previously issued pursuant hereto, 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. No provision of this Section 7 shall be deemed to affect or change,
or constitute authorization for any violation of, any of the covenants or
representations in the Merger Agreement.
(b) In the event that Issuer shall enter into an agreement
(i) to consolidate with or merge into any person, other than Grantee or one
of its subsidiaries, and Issuer 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 Issuer Common Stock shall
be changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property, or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall, after such
merger, represent less than 50% of the outstanding shares and share
equivalents of the merged company or (iii) to sell or otherwise transfer
all or substantially all of its assets or deposits 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 provisions so that
the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged
for, an option ("Substitute Option"), at the election of Holder, to
purchase shares of either (A) the Acquiring Corporation (as hereinafter
defined), (B) any person that controls the Acquiring Corporation or (C) in
the case of a merger described in clause (ii), Issuer (such person being
referred to as "Substitute Option Issuer").
(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 Holder. The Substitute Option
Issuer shall also enter into an agreement with Holder 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 hereinafter defined) as is
equal to the Assigned Value (as hereinafter defined) multiplied by the
number of shares of Issuer Common Stock for which the Option was
theretofore exercisable, divided by the Average Price (as hereinafter
defined). The exercise price of the Substitute Option per share of
Substitute Common Stock ("Substitute Option Price") shall then be equal to
the Purchase Price multiplied by a fraction in which the numerator is the
number of shares of Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (A) the
continuing or surviving corporation of a consolidation or merger
with Issuer (if other than Issuer), (B) Issuer in a merger in which
Issuer is the continuing or surviving person, or (C) the transferee
of all or substantially all of Issuer's assets (or a substantial
part of the assets of its subsidiaries taken as a whole).
(ii) "Substitute Common Stock" shall mean the shares
of capital stock (or similar equity interest) with the greatest
voting power in respect of the election of directors (or persons
similarly responsible for the direction of the business and
affairs) of the Substitute Option Issuer.
(iii) "Assigned Value" shall mean the highest of (A)
the price per share of Issuer Common Stock at which a Tender Offer
or an Exchange Offer therefor has been made, (B) the price per
share of Issuer Common Stock to be paid by any third party pursuant
to an agreement with Issuer, (C) the highest closing price for
shares of Issuer Common Stock within the 60-day period immediately
preceding the consolidation, merger or sale in question and (D) in
the event of a sale of all or substantially all of Issuer's assets
or deposits, an amount equal to (x) the sum of the price paid in
such sale for such assets (and/or deposits) and the current market
value of the remaining assets of Issuer, as determined by a
nationally recognized investment banking firm selected by Holder,
divided by (y) the number of shares of Issuer Common Stock
outstanding at such time. In the event that a Tender Offer or an
Exchange Offer is made for Issuer Common Stock or an agreement is
entered into for a merger or consolidation involving consideration
other than cash, the value of the securities or other property
issuable or deliverable in exchange for Issuer Common Stock shall
be determined by a nationally recognized investment banking firm
selected by Holder.
(iv) "Average Price" shall mean the average closing
price of a share of Substitute Common Stock for the one year
immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of the
shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided, that, if Issuer is the
issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by Issuer,
the person merging into Issuer or by any company which controls
such person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than 19.9%
of the aggregate of the shares of Substitute Common Stock outstanding prior
to exercise of the Substitute Option. In the event that the Substitute
Option would be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding but for the limitation in the
first sentence of this Section 7(f), Substitute Option Issuer shall make a
cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in the first
sentence of this Section 7(f) over (ii) the value of the Substitute Option
after giving effect to the limitation in the first sentence of this Section
7(f). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Holder.
(g) Issuer shall not enter into any transaction described in
Section 7(b) of this Agreement unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and take all other actions that may be
necessary so that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be necessary so
that the holders of the other shares of common stock issued by Substitute
Option Issuer are not entitled to exercise any rights by reason of the
issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are otherwise in no way distinguishable from or have lesser
economic value (other than any diminution in value resulting from the fact
that the shares Substitute Common Stock are restricted securities, as
defined in Rule 144, promulgated under the Securities Act ("Rule 144"), or
any successor provision) than other shares of common stock issued by
Substitute Option Issuer).
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a) of this
Agreement, at the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d) hereof) and
ending 12 months immediately thereafter, Issuer shall repurchase from
Holder (i) the Option and (ii) all shares of Issuer Common Stock purchased
by Holder pursuant hereto with respect to which Holder then has beneficial
ownership. The date on which Holder exercises its rights under this Section
8 is referred to as the "Request Date." Such repurchase shall be at an
aggregate price ("Section 8 Repurchase Consideration") equal to the sum of:
(i) The aggregate Purchase Price paid by Holder for
any shares of Issuer Common Stock acquired pursuant to the Option
with respect to which Holder then has beneficial ownership;
(ii) The excess, if any, of (A) the Applicable Price
(as defined below) for each share of Issuer Common Stock over (B)
the Purchase Price (subject to adjustment pursuant to Section 7 of
this Agreement), multiplied by the number of shares of Issuer
Common Stock with respect to which the Option has not been
exercised; and
(iii) The excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment pursuant to Section
7 of this Agreement) paid (or, in the case of Option Shares with
respect to which the Option has been exercised but the Closing Date
has not occurred, payable) by Holder for each share of Issuer
Common Stock with respect to which the Option has been exercised
and with respect to which Holder then has beneficial ownership,
multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 8,
Issuer shall, within 10 business days after the Request Date, pay the
Section 8 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment, Holder shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer
Common Stock purchased thereunder with respect to which Holder then has
beneficial ownership, and Holder shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free and
clear of all Liens. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Governmental Entity is required in
connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Holder shall have the ongoing option to revoke
its request for repurchase pursuant to this Section 8, in whole or in part,
or to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for approval
and expeditiously process the same (and each party shall cooperate with the
other in the filing of any such notice or application and the obtaining of
any such approval). If any Governmental Entity disapproves of any part of
Issuer's proposed repurchase pursuant to this Section 8, Issuer shall
promptly give notice of such fact to Holder and Holder shall have the right
(i) to revoke the repurchase request or (ii) to the extent permitted by
such Governmental Entity, determine whether the repurchase should apply to
the Option and/or Option Shares and to what extent to each, and Holder
shall thereupon have the right to exercise the Option as to the number of
Option Shares for which the Option was exercisable at the Request Date less
the number of shares covered by the Option in respect of which payment has
been made pursuant to Section 8(a)(ii) of this Agreement. Holder shall
notify Issuer of its determination under the preceding sentence within five
business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, in the event that Issuer
delivers to the Holder written notice accompanied by a certification of
Issuer's independent auditor each stating that a requested repurchase of
Issuer Common Stock would result in the recapture of Issuer's bad debt
reserves under the Internal Revenue Code of 1986, as amended ("Code"),
Holder's repurchase request shall be deemed to be automatically revoked.
Notwithstanding anything herein to the contrary, all of Holder's rights
under this Section 8 shall terminate on the date of termination of this
Option pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Applicable Price"
means the highest of (i) the highest price per share of Issuer Common Stock
paid for any such share by the person or groups described in Section
8(d)(i) hereof, (ii) the price per share of Issuer Common Stock received by
holders of Issuer Common Stock in connection with any merger, sale or other
business combination transaction described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii) of this Agreement, or (iii) the highest closing sales price per
share of Issuer Common Stock as quoted on the New York Stock Exchange
("NYSE"), the American Stock Exchange ("AMEX") or the National Market
System of The Nasdaq Stock Market ("Nasdaq") (or if Issuer Common Stock is
not quoted on the NYSE, AMEX or Nasdaq, the highest bid price per share as
quoted on the principal trading market or securities exchange on which such
shares are traded as reported by a recognized source chosen by Holder)
during the 40 business days preceding the Request Date; provided, however,
that in the event of a sale of less than all of Issuer's assets, the
Applicable Price shall be the sum of the price paid in such sale for such
assets and the current market value of the remaining assets of Issuer as
determined by a nationally recognized investment banking firm selected by
Holder, divided by the number of shares of Issuer Common Stock outstanding
at the time of such sale. If the consideration to be offered, paid or
received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in
good faith by an independent nationally recognized investment banking firm
selected by Holder and reasonably acceptable to Issuer, which determination
shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i)
any person (other than Grantee or any subsidiary of Grantee) shall have
acquired beneficial ownership of (as such term is defined in Rule 13d-3,
promulgated under the Exchange Act), 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, more than 25% of the then outstanding
shares of Issuer Common Stock, or (ii) any of the transactions described in
Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this Agreement shall be
consummated.
9. Repurchase of Substitute Option.
(a) Subject to the last sentence of Section 3(a) of this
Agreement, at the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d) hereof) and
ending 12 months immediately thereafter, Substitute Option Issuer (or any
successor entity thereof) shall repurchase from Holder (i) the Substitute
Option and (ii) all shares of Substitute Common Stock purchased by Holder
pursuant hereto with respect to which Holder then has beneficial ownership.
The date on which Holder exercises its rights under this Section 9 is
referred to as the "Section 9 Request Date." Such repurchase shall be at an
aggregate price ("Section 9 Repurchase Consideration") equal to the sum of:
(i) The aggregate Purchase Price paid by Holder for
any shares of Substitute Common Stock acquired pursuant to the
Substitute Option with respect to which Holder then has beneficial
ownership;
(ii) The excess, if any, of (A) the Highest Closing
Price (as defined below) for each share of Substitute Common Stock
over (B) the Purchase Price (subject to adjustment pursuant to
Section 7 of this Agreement), multiplied by the number of shares of
Substitute Common Stock with respect to which the Substitute Option
has not been exercised; and
(iii) The excess, if any, of the Highest Closing
Price over the Purchase Price (subject to adjustment pursuant to
Section 7 of this Agreement) paid (or, in the case of Substitute
Option Shares with respect to which the Substitute Option has been
exercised but the Closing Date has not occurred, payable) by Holder
for each share of Substitute Common Stock with respect to
which the Substitute Option has been exercised and with respect to
which Holder then has beneficial ownership, multiplied by the
number of such shares.
(b) If Holder exercises its rights under this Section 9,
Substitute Option Issuer shall, within 10 business days after the Section 9
Request Date, pay the Section 9 Repurchase Consideration to Holder in
immediately available funds, and contemporaneously with such payment,
Holder shall surrender to Substitute Option Issuer the Substitute Option
and the certificates evidencing the shares of Substitute Common Stock
purchased thereunder with respect to which Holder then has beneficial
ownership, and Holder shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
Liens. Notwithstanding the foregoing, to the extent that prior notification
to or approval of any Governmental Entity is required in connection with
the payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request
for repurchase pursuant to this Section 9, in whole or in part, or to
require that Substitute Option Issuer deliver from time to time that
portion of the Section 9 Repurchase Consideration that it is not then so
prohibited from paying and promptly file the required notice or application
for approval and expeditiously process the same (and each party shall
cooperate with the other in the filing of any such notice or application
and the obtaining of any such approval). If any Governmental Entity
disapproves of any part of Substitute Option Issuer's proposed repurchase
pursuant to this Section 9, Substitute Option Issuer shall promptly give
notice of such fact to Holder and Holder shall have the right (i) to revoke
the repurchase request or (ii) to the extent permitted by such Governmental
Entity, determine whether the repurchase should apply to the Substitute
Option and/or Substitute Option Shares and to what extent to each, and
Holder shall thereupon have the right to exercise the Substitute Option as
to the number of Substitute Option Shares for which the Substitute Option
was exercisable at the Section 9 Request Date less the number of shares
covered by the Substitute Option in respect of which payment has been made
pursuant to Section 9(a)(ii) of this Agreement. Holder shall notify
Substitute Option Issuer of its determination under the preceding sentence
within five business days of receipt of notice of disapproval of the
repurchase. Notwithstanding anything herein to the contrary, in the event
that Substitute Option Issuer delivers to the Holder written notice
accompanied by a certification of Substitute Option Issuer's independent
auditor each stating that a requested repurchase of Substitute Common Stock
would result in the recapture of Substitute Option Issuer's bad debt
reserves under the Code, Holder's repurchase request shall be deemed to be
automatically revoked. Notwithstanding anything herein to the contrary, all
of Holder's rights under this Section 9 shall terminate on the date of
termination of this Substitute Option pursuant to Section 3(a) of this
Agreement.
(c) For purposes of this Agreement, the "Highest Closing
Price" means the highest of the closing sales price per share of Substitute
Common Stock, as quoted on the NYSE, AMEX or Nasdaq (or if the Substitute
Common Stock is not quoted on the NYSE, AMEX or Nasdaq, the highest bid
price per share as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a recognized
source) during the six-month period preceding the Section 9 Request Date.
10. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the
conditions of Section 10(c) of this Agreement, if requested by any Holder,
including Grantee and any permitted transferee ("Selling Shareholder"), as
expeditiously as possible, prepare and file and keep current a registration
statement under the Securities Act if such registration is necessary in
order to permit the sale or other disposition of any or all shares of
Issuer Common Stock or other securities that have been acquired by or are
issuable to the Selling Shareholder upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
the Selling Shareholder in such request, including without limitation a
"shelf" registration statement under Rule 415, promulgated under the
Securities Act, or any successor provision, and Issuer shall use its best
efforts to qualify such shares or other securities for sale under any
applicable state securities laws.
(b) Additional Registration Rights. If Issuer at any time
after the exercise of the Option proposes to register any shares of Issuer
Common Stock under the Securities Act in connection with an underwritten
public offering of such Issuer Common Stock, Issuer will promptly give
written notice to the Selling Shareholders of its intention to do so and,
upon the written request of any Selling Shareholder given within 30 days
after receipt of any such notice (which request shall specify the number of
shares of Issuer Common Stock intended to be included in such underwritten
public offering by the Selling Shareholder), Issuer will cause all such
shares for which a Selling Shareholder requests participation in such
registration, to be so registered and included in such underwritten public
offering; provided, however, that Issuer may elect to not cause some or all
of such shares to be so registered (i) if the underwriters in the Public
Offering in good faith object for valid business reasons, or (ii) in the
case of a registration solely to implement an employee benefit agreement or
a registration filed on Form S-4 of the Securities Act or any equivalent or
successor Form. If some, but not all the shares of Issuer Common Stock,
with respect to which Issuer shall have received requests for registration
pursuant to this Section 10(b), shall be excluded from such registration,
Issuer shall make appropriate allocation of shares to be registered among
the Selling Shareholders desiring to register their shares pro rata in the
proportion that the number of shares requested to be registered by each
such Selling Shareholder bears to the total number of shares requested to
be registered by all such Selling Shareholders then desiring to have Issuer
Common Stock registered for sale.
(c) Conditions to Required Registration. Issuer shall use
all reasonable efforts to cause each registration statement referred to in
Section 10(a) of this Agreement to become effective and to obtain all
consents or waivers of other parties which are required therefor and to
keep such registration statement effective, provided, however, that Issuer
may delay any registration of Option Shares required pursuant to Section
10(a) of this Agreement for a period not exceeding 90 days provided Issuer
shall in good faith determine that any such registration would adversely
affect an offering or contemplated offering of other securities by Issuer,
and Issuer shall not be required to register Option Shares under the
Securities Act pursuant to Section 10(a) hereof:
(i) Prior to the earliest of (A) termination of the
Merger Agreement pursuant to Article VI thereof, (B) failure to
obtain the requisite stockholder approval pursuant to Section
6.1(b) of the Merger Agreement, and (C) a Purchase Event or a
Preliminary Purchase Event;
(ii) On more than one occasion during any calendar
year;
(iii) Within 90 days after the effective date of a
registration referred to in Section 10(b) of this Agreement
pursuant to which the Selling Shareholder or Selling Shareholders
concerned were afforded the opportunity to register such shares
under the Securities Act and such shares were registered as
requested; and
(iv) Unless a request therefor is made to Issuer by
Selling Shareholders that hold at least 25% or more of the
aggregate number of Option Shares (including shares of Issuer
Common Stock issuable upon exercise of the Option) then
outstanding.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of nine
months from the effective date of such registration statement. Issuer shall
use all reasonable efforts to make any filings, and take all steps, under
all applicable state or local securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so registered in
accordance with the intended method of distribution for such shares;
provided, however, that Issuer shall not be required to consent to general
jurisdiction or qualify to do business in any state or locality where it is
not otherwise required to so consent to such jurisdiction or to so qualify
to do business.
(d) Expenses. Except where applicable state law prohibits
such payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses
(including the fees and expenses of counsel), legal expenses, including the
reasonable fees and expenses of one counsel to the holders whose Option
Shares are being registered, printing expenses and the costs of special
audits or "cold comfort" letters, expenses of underwriters, excluding
discounts and commissions but including liability insurance if Issuer so
desires or the underwriters so require, and the reasonable fees and
expenses of any necessary special experts) in connection with each
registration pursuant to Section 10(a) or 10(b) of this Agreement
(including the related offerings and sales by holders of Option Shares) and
all other qualifications, notifications or exemptions pursuant to Section
10(a) or 10(b) of this Agreement.
(e) Indemnification. (i) In connection with any registration
under Section 10(a) or 10(b) of this Agreement, Issuer hereby indemnifies
the Selling Shareholders, and each underwriter thereof, including each
person, if any, who controls such holder or underwriter within the meaning
of Section 15 of the Securities Act, against all expenses, losses, claims,
damages and liabilities caused by any untrue, or alleged untrue, statement
of a material fact contained in any registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission, or
alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue
statement that was included by Issuer in any such registration statement or
prospectus or notification or offering circular (including any amendments
or supplements thereto) in reliance upon and in conformity with,
information furnished in writing to Issuer by such indemnified party
expressly for use therein, and Issuer and each officer, director and
controlling person of Issuer shall be indemnified by such Selling
Shareholders, or by such underwriter, as the case may be, for all such
expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by such holder
or such underwriter, as the case may be, expressly for such use.
(ii) Promptly upon receipt by a party indemnified under this
Section 10(e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be
sought against any indemnifying party under this Section 10(e), such
indemnified party shall notify the indemnifying party in writing of the
commencement of such action, but the failure so to notify the indemnifying
party shall not relieve it of any liability which it may otherwise have to
any indemnified party under this Section 10(e). In case notice of
commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in
and, to the extent it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense of such action at its own
expense, with counsel chosen by it and satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (x) the
indemnifying party either agrees to pay the same, (y) the indemnifying
party fails to assume the defense of such action with counsel satisfactory
to the indemnified party, or (z) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the
indemnifying party that may be contrary to the interest of the indemnified
party, in which case the indemnifying party shall be entitled to assume the
defense of such action notwithstanding its obligation to bear fees and
expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
(iii) If the indemnification provided for in this Section
10(e) is unavailable to a party otherwise entitled to be indemnified in
respect of any expenses, losses, claims, damages or liabilities referred
to herein, then the indemnifying party, in lieu of indemnifying such party
otherwise entitled to be indemnified, shall contribute to the amount paid
or payable by such party to be indemnified as a result of such expenses,
losses, claims, damages or liabilities in such proportion as is appropriate
to reflect the relative benefits received by Issuer, the Selling
Shareholders and the underwriters from the offering of the securities and
also the relative fault of Issuer, the Selling Shareholders and the
underwriters in connection with the statements or omissions which resulted
in such expenses, losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any action or claim; provided, however, that in no case shall
any Selling Shareholder be responsible, in the aggregate, for any amount in
excess of the net offering proceeds attributable to its Option Shares
included in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to indemnify
shall be several and not joint with other holders.
(iv) In connection with any registration pursuant to Section
10(a) or 10(b) of this Agreement, Issuer and each Selling Shareholder
(other than Grantee) shall enter into an agreement containing the
indemnification provisions of Section 10(e) of this Agreement.
(f) Miscellaneous Reporting. Issuer shall comply with all
reporting requirements and will do all such other things as may be
necessary to permit the expeditious sale at any time of any Option Shares
by the Selling Shareholders thereof in accordance with and to the extent
permitted by any rule or regulation promulgated by the SEC from time to
time, including, without limitation, Rule 144. Issuer shall at its expense
provide the Selling Shareholders with any information necessary in
connection with the completion and filing of any reports or forms required
to be filed by them under the Securities Act or the Exchange Act, or
required pursuant to any state securities laws or the rules of any stock
exchange.
(g) Issue Taxes. Issuer will pay all stamp taxes in
connection with the issuance and the sale of the Option Shares and in
connection with the exercise of the Option, and will save the Selling
Shareholders harmless, without limitation as to time, against any and all
liabilities, with respect to all such taxes.
11. Quotation; Listing. If Issuer Common Stock or any other
securities to be acquired in connection with the exercise of the Option are
then authorized for quotation or trading or listing on the NYSE, AMEX,
Nasdaq or any other securities exchange, Issuer, upon the request of
Holder, will promptly file an application, if required, to authorize for
quotation or trading or listing the shares of Issuer Common Stock or other
securities to be acquired upon exercise of the Option on the NYSE, AMEX,
Nasdaq or such other securities exchange and will use its best efforts to
obtain approval, if required, of such quotation or listing as soon as
practicable.
12. Division of Option. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of Holder,
upon presentation and surrender of this Agreement at the principal office
of Issuer for other Agreements providing for Options of different
denominations entitling the holder thereof to purchase in the aggregate the
same number of shares of Issuer Common Stock purchasable hereunder. The
terms "Agreement" and "Option" as used herein include any other Agreements
and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. 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.
13. Profit Limitation.
(a) Notwithstanding any other provision of this agreement,
in no event shall Grantee's Total Profit (as hereinafter defined) exceed
$30 million, plus Grantee's documented, reasonable out-of-pocket expenses
(including fees and expenses of legal, financial and accounting advisors)
incurred in connection with the transactions contemplated by the Merger
Agreement, and, if it otherwise would exceed such amount, Grantee, at its
sole election, shall either (i) deliver to Issuer for cancellation Shares
previously purchased by Grantee, (ii) pay cash or other consideration to
Issuer or (iii) undertake any combination thereof, so that Grantee's Total
Profit shall not exceed $30 million, plus Grantee's documented, reasonable
out-of-pocket expenses (including fees and expenses of legal, financial and
accounting advisors) incurred in connection with the transactions
contemplated by the Merger Agreement, after taking into account the
foregoing actions.
(b) Notwithstanding any other provision of this Agreement,
this Option may not be exercised for a number of Shares as would, as of the
Notice Date, result in a Notional Total Profit (as defined below) of more
than $30 million, plus Grantee's documented, reasonable out-of-pocket
expenses (including fees and expenses of legal, financial and accounting
advisors) incurred in connection with the transactions contemplated by the
Merger Agreement, and, if exercise of the Option otherwise would exceed
such amount, Grantee, at its discretion, may increase the Purchase Price
for that number of Shares set forth in the Option Notice so that the
Notional Total Profit shall not exceed $30 million, plus Grantee's
documented, reasonable out-of-pocket expenses (including fees and expenses
of legal, financial and accounting advisors) incurred in connection with
the transactions contemplated by the Merger Agreement; provided, that
nothing in this sentence shall restrict any exercise of the Option
permitted hereby on any subsequent date at the Purchase Price set forth in
Section 2 hereof.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount of cash
received by Grantee pursuant to Section 6.3 of the Merger Agreement and
Section 8(a)(ii) hereof, (ii) (x) the amount received by Grantee pursuant
to the repurchase of Option Shares pursuant to Section 8 or Section 9
hereof, less Grantee's purchase price for such Option Shares, and (iii) the
net cash amounts received by Grantee pursuant to the sale of Option Shares
(or any other securities into which such Option Shares are converted or
exchanged) to any unaffiliated party, less Grantee's purchase price for
such Option Shares.
(d) As used herein, the term "Notional Total Profit" with
respect to any number of Option Shares as to which Grantee may propose to
exercise this Option shall be the Total Profit determined as of the date of
the Option Notice assuming that this Option were exercised on such date for
such number of Shares and assuming that such Option 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).
14. Miscellaneous.
(a) Expenses. Except to the extent expressly provided for
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.
(b) Waiver and Amendment. Any provision of this Agreement
may be waived at any time by the party that is entitled to the benefits of
such provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiaries;
Severability. This Agreement, together with the Merger Agreement and the
other documents and instruments referred to herein and therein, between
Grantee and Issuer (i) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) is not intended
to confer upon any person other than the parties hereto (other than the
indemnified parties under Section 10(e) of this Agreement and any
transferees of the Option Shares or any permitted transferee of this
Agreement pursuant to Section 14(h) of this Agreement) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or Governmental
Entity to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of 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 Governmental Entity determines
that the Option does not permit Holder to acquire, or does not require
Issuer to repurchase, the full number of shares of Issuer Common Stock as
provided in Section 3 of this Agreement (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without
regard to any applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail
(return receipt requested) to the parties at the addresses set forth in the
Merger Agreement (or at such other address for a party as shall be
specified by like notice).
(g) Counterparts. This Agreement and any amendments hereto
may be executed in two counterparts, each of which shall be considered one
and the same agreement and shall become effective when both counterparts
have been signed, it being understood that both parties need not sign the
same counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party, except
that Holder may assign this Agreement to a wholly-owned subsidiary of
Holder and Holder may assign its rights hereunder in whole or in part after
the occurrence of a Purchase Event. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the
Option by the Holder, Issuer, and the Holder shall execute and deliver all
other documents and instruments and take all other action that may be
reasonably necessary in order to consummate the transactions provided for
by such exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for
any failure to perform this Agreement.
(k) Limitation on Resale of Issuer Common Stock. Grantee
agrees that no shares of Issuer Common Stock acquired by it upon exercise
of the Option, if any, shall be sold, transferred or otherwise disposed by
it prior to the termination of the Merger Agreement in accordance with the
terms thereof, except as follows. If the Grantee shall determine to accept
a bona fide offer to purchase the Issuer Common Stock then held by it or to
sell any such Stock on the open market, the Grantee shall give notice
thereof to the Issuer specifying (i) the Issuer Common Stock to be sold and
(ii) the purchase price to be offered therefor (or in the case of open
market sales, that the sales are to be at prices prevailing on the market)
and any other significant terms of the proposed transaction. Upon receipt
of such notice, the Issuer shall, for a period of three business days
immediately following such receipt, have the right of first refusal to
purchase the Issuer Common Stock then held by Grantee that is proposed to
be sold at the purchase price set forth in such notice or, if such shares
are to be sold in open market transaction, at a purchase price equal to the
average of the closing prices therefor (and if there is no such closing
price on any of such days, then the mean of the closing bid and the closing
asked prices on that day) on the principal market on which Issuer Common
Stock is traded for the five trading days immediately prior to the Issuer's
receipt of such notice. Payment for such shares shall be made to the
Grantee in immediately available funds within three business days
immediately following receipt of the notice of the proposed sale.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Stock Option Agreement to be signed by their respective officers thereunto
duly authorized, all as of the day and year
first written above.
JSB FINANCIAL, INC.
By: /s/ Park X. Xxxxxx
-----------------------------
Park X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
NORTH FORK BANCORPORATION, INC.
By: /s/ Xxxx Xxxx Xxxxx
-----------------------------
Xxxx Xxxx Xxxxx
Chairman of the Board,
President and Chief Executive
Officer
