Exhibit (c)(3)
December 23, 1997
Hi-Lo Automotive, Inc.
0000 Xxxx Xxxxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Hi-Lo Automotive, Inc. 1990 Stock Option Plan (the
"Plan") and to that certain Agreement and Plan of Merger dated as of December
23, 1997 among Hi-Lo Automotive, Inc. (the "Company"), X'Xxxxxx Automotive,
Inc. and Shamrock Acquisition, Inc. (the "Merger Agreement"). In order to
facilitate the transactions comtemplated by the Merger Agreement and in
consideration for the direct and indirect benefits to be received by the
undersigned as a result thereof, the receipt and sufficiency of which are hereby
acknowledged, the Company and the undersigned director of the Company hereby
agree as follows:
1. Each option agreement between the Company and the undersigned
director is hereby amended to provide for automatic acceleration of vesting of
options granted pursuant to such agreements upon a corporate change of control
by deleting the first sentence of the second full paragraph of Section 3 thereof
and replacing such sentence with the following sentence so that the first
sentence of the second full paragraph of Section 3 reads in its entirety as
follows:
"Notwithstanding the foregoing, this Option shall become fully
exercisable upon a Corporate Change (as such term is defined in the Plan),
which acceleration shall not limit the authority of the committee appointed
by the Board of Directors to administer the Plan to effect such other
actions as are provided for in the Plan in the event of a Corporate
Change".
2. Notwithstanding any rights which the undersigned may have under the
Plan or any option agreement granting options under the Plan to purchase shares
of common stock, par value $.01 per share (the "Common Stock"), of the Company
("Options"), the undersigned hereby covenants, promises and agrees that the
undersigned will not exercise, or provide notice of exercise with respect to,
any Options beneficially owned by the undersigned (_______ Options as of the
date hereof) prior to the earlier of (i) the termination of the Merger Agreement
and (ii) six days after the consummation of the Offer (as defined in the Merger
Agreement).
3. The undersigned acknowledges that on the fifth day after the
consummation of the Offer, each Option that is outstanding immediately prior to
the consummation of the Offer will be canceled in exchange for a single lump sum
payment equal to the product of (i) the number of shares
of Common Stock subject to such Option and (ii) the excess of the Per Share
Amount (as defined in the Merger Agreement) over the exercise price per share of
such Option.
This letter agreement shall be effective as of the time of its acceptance
by the Company.
Very truly yours,
________________________________
Name:
Agreed and Accepted as of
___:00 __.m., this _____
date of December, 1997
HI-LO AUTOMOTIVE, INC.
By: ___________________________
X. Xxxxx Xxxxxxxx
Vice President and General Counsel
