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EXHIBIT 2.3
STOCKHOLDER OPTION AGREEMENT
This STOCKHOLDER OPTION AGREEMENT (this "Agreement"), dated January 10,
2001, by and among United Parcel Service, Inc., a Delaware corporation
("Holder"), and Xxxx X. Xxxxx, an individual resident of the state of California
(the "Stockholder").
WITNESSETH THAT:
WHEREAS, the Stockholder owns of record 10,640,129 shares of common
stock (the "Common Stock"), $.01 par value, of Xxxxx Companies Inc., a Delaware
corporation ("Company") (all of such shares being referred to herein, and giving
effect to Section 14 hereof, as the "Shares"); and
WHEREAS, concurrently herewith Holder, VND Merger Sub, Inc., a Delaware
corporation and wholly owned subsidiary of Holder ("Newco"), and Company are
entering into a Plan and Agreement of Merger (the "Merger Agreement") pursuant
to which Newco would, subject to the terms and conditions set forth therein,
merge with and into Company (the "Merger"); and
WHEREAS, the transaction is expected to be structured as a tax-free
reorganization for shares of Holder capital stock; and
WHEREAS, the Stockholder desires to induce Holder to proceed with the
Merger and enter into the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, Holder's willingness to enter into the Merger Agreement and
the sum of $100, and such other valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. The Stockholder hereby grants to Holder an
irrevocable and continuing option (the "Option") to purchase all of the Shares
owned by him for a per share price equal to an amount of cash equal to 0.2
multiplied by the average (rounded to the nearest 1/10,000) of the volume
weighted averages (rounded to the nearest 1/10,000) of the trading prices of
Holder Class B common stock, par value $0.01 per share, on the New York Stock
Exchange, as reported by Bloomberg Financial Markets (or such other source as
the parties shall agree in writing), for the 10 trading days immediately
preceding the Notice (as defined below) (the "Purchase Price"). As additional
consideration, Holder shall pay to the Stockholder, promptly following the sale
or other disposition of any Shares (or any other securities into which such
Shares are converted or exchanged) within 6 months following the Closing (as
defined below), any property or cash amounts received therefor by Holder in
excess of the Purchase Price.
2. Exercise of Option. Holder may exercise the Option, in whole but not
in part, at any time following the occurrence of a First Date for Exercise (as
defined below) by delivering a
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written notice to the Stockholder with a copy to Bank of America, N.A., (or if
Bank of America, N.A. is unwilling or unable to act upon commercially reasonable
terms, any other bank or trust company reasonably acceptable to Holder and
Stockholder), as escrow agent (the "Escrow Agent") under an Escrow Agreement, to
be entered into within five days of the date hereof upon commercially reasonable
terms among Holder, the Stockholder and the Escrow Agent (the "Escrow
Agreement") of its intention to exercise the Option (the "Notice"), specifying a
time, place and date for the closing (the "Closing"), which shall occur as soon
as practicable, but not later than three (3) business days from the date of the
Notice; provided, however, that (a) if any approvals under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or otherwise
shall be required with respect to such exercise, then the Closing shall be the
later of the date specified in the Notice or the next business day following the
date on which such approvals shall have been obtained, and (b) there shall not
be in effect any preliminary or final injunction or other order issued by any
court or governmental, administrative or regulatory agency or authority or
legislative body or commission prohibiting the exercise of the Option pursuant
to this Agreement. As used herein, the "First Date for Exercise" shall mean the
earliest to occur of any of the following events:
(i) any person shall have commenced (as such term is defined
in Rule 14d-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), or shall have filed a
registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to, a
tender offer or exchange offer to purchase any shares of
Common Stock such that, upon consummation of such offer,
such person would own or control 20% or more of the then
outstanding Common Stock;
(ii) Company, without having received Holder's prior written
consent, shall (A) have authorized, recommended,
proposed or publicly announced an intention to
authorize, recommend or propose, or shall have entered
into or publicly announced an intention to enter into,
an agreement with any person (other than Holder, Newco
or any other subsidiary of Holder) to (1) effect a
merger, consolidation, combination, reorganization,
share exchange, joint venture involving an "equity
control event" (as defined below) or similar transaction
involving Company, (2) directly or indirectly sell,
lease or otherwise transfer or dispose of, or agree to
sell, lease or otherwise transfer or dispose of, assets
of Company or its subsidiaries representing 20% or more
of the consolidated assets of Company and its
subsidiaries or (3) directly or indirectly issue, sell
or otherwise transfer or dispose of or agree to issue,
sell or otherwise transfer or dispose of (including,
without limitation, by way of merger, consolidation,
reorganization, share exchange, dividend, distribution
or any similar transaction) securities representing 20%
or more of the voting power of Company (any of the
foregoing an "Acquisition Transaction"), or (B) directly
or indirectly have otherwise taken any action including,
without limitation, responding to, or entering into
discussions or negotiations, in respect of an
Acquisition Transaction or an Acquisition Proposal (as
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defined in the Merger Agreement) made by any party other
than Holder; provided that such action violates Section
6.9 of the Merger Agreement;
(iii) any person or group (as such term is defined under the
Exchange Act) shall have acquired beneficial ownership
(as such term is defined in Rule 13d-3 under the
Exchange Act) or the right to acquire beneficial
ownership of, or any group shall have been formed which
beneficially owns or has the right to acquire beneficial
ownership of, 15% or more of the then outstanding Common
Stock (other than any person or group that, at the date
hereof, beneficially owns or has the right to acquire
beneficial ownership of 15% or more of the outstanding
shares of Common Stock) (an "equity control event"); or
(iv) any person other than Holder shall have made an
Acquisition Proposal to Company and such proposal shall
have been publicly announced (the events described in
the preceding clauses (i), (ii), (iii) and (iv) are
collectively and individually hereinafter referred to as
an "Acquisition Event").
3. Payment and Delivery of Certificates. Concurrent with the execution
of this Agreement, the Stockholder shall deliver to the Escrow Agent the
certificates representing the Shares, duly endorsed in blank for transfer, or
accompanied by duly executed stock powers in blank, in each case with signatures
guaranteed by a national bank or trust company or a member firm of the New York
Stock Exchange, Inc. At the Closing hereunder, the Escrow Agent shall promptly
deliver to Holder the Shares and, simultaneously with the proper surrender by
Escrow Agent to Holder of the Shares to be purchased by Holder, Holder shall
deliver to the Escrow Agent a wire transfer of immediately available funds equal
to the product of (x) the Purchase Price multiplied by (y) the number of Shares.
4. Representations and Warranties of the Stockholder. The Stockholder
represents and warrants (such representations and warranties being deemed
repeated at the Closing) to Holder that:
4.1 Ownership of Shares. The Stockholder has good and marketable
title to and is the sole record owner of the Shares; except as set forth on
Schedule 4.1 hereto, the Stockholder does not own beneficially or of record any
other capital stock of Company; such Shares are validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof;
and such Shares are owned by the Stockholder free and clear of any pledges,
liens, security interests, adverse claims, assessments, proxies, participations,
options, equities, charges or encumbrances of any nature whatsoever with respect
to the ownership of or right to vote or dispose of such Shares, except for any
encumbrances arising hereunder.
4.2 Transfer of Title. The sale by the Stockholder of his Shares
and the delivery by Escrow Agent of the certificates representing such Shares to
Holder pursuant hereto will transfer to Holder good and valid title to such
Shares free and clear of all pledges, liens,
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security interests, adverse claims, assessments, options, equities, charges and
encumbrances of any nature whatsoever, and with no proxies or restrictions on
the voting rights or other incident of record or beneficial ownership pertaining
thereto (other than the proxy being granted pursuant to Section 6 of this
Agreement).
4.3 Authority; Due Execution; Enforceability. The Stockholder has
the full right, power, capacity and authority to enter into this Agreement and
has sole voting power and sole power of disposition with respect to the Shares
with no restrictions on the Stockholder's voting rights or rights of disposition
pertaining thereto (other than the proxy being granted pursuant to Section 6 of
this Agreement); and this Agreement has been duly and validly executed and
delivered by the Stockholder and constitutes a legal, valid and binding
obligation of the Stockholder enforceable against him in accordance with its
terms, except that such enforceability may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights.
4.4 No Conflicts. The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will not, with
or without giving of notice or the passage of time, (a) violate any judgment,
award, decree, injunction or order of any court, arbitrator or governmental
agency applicable to the Stockholder or the Stockholder's property or assets or
any federal or state law, statute or regulation, or (b) conflict with, result in
the breach of any provision of or constitute a violation of or default under any
agreement or instrument to which the Stockholder is a party or by which the
Stockholder or the Stockholder's property or assets may be bound.
5. Covenants of the Stockholder. The Stockholder hereby covenants and
agrees that:
5.1 Bring-Down of Representations. During the term hereof the
Stockholder will not enter into any transaction, take any action or by inaction
permit any event to occur, that would result in any of the representations or
warranties of the Stockholder herein contained not being true and correct at and
as of (a) the time immediately after the occurrence of such transaction, action
or event or (b) the date of the Closing of the purchase of Shares. Without
limiting the generality of the foregoing, the Stockholder covenants and agrees
that the Stockholder will not sell, transfer, pledge, hypothecate, assign or
otherwise convey or dispose of, or enter into any contract, option, agreement or
other arrangement or understanding with respect to the sale, transfer, pledge,
assignment, conveyance or other disposition of, any Shares, other than to or in
favor of Holder or Holder's assignee, or in connection with the Merger or an
Acquisition Transaction between Company and Holder, Newco or another subsidiary
of Holder (a "Holder Acquisition Transaction").
5.2 Surrender of Shares. Concurrent with the execution of this
Agreement, the Stockholder will execute an Escrow Agreement authorizing the
Escrow Agent to take the actions contemplated by this Agreement on behalf of the
Stockholder and will surrender the certificates representing his Shares to the
Escrow Agent to be held pursuant to the Escrow Agreement. The Stockholder agrees
that Company may instruct the transfer agent for the Common Stock to place a
stop transfer order against any attempt to transfer the Shares except in
accordance with the Escrow Agreement and this Agreement.
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6. Irrevocable Proxy and Release; Agreement to Vote Shares.
(a) The Stockholder has revoked or terminated any proxies, voting
agreements or similar arrangements previously given or entered into with respect
to the Shares and hereby irrevocably appoints Holder, during the term of this
Agreement, as proxy, with full power of substitution, for the Stockholder to
vote (or refrain from voting) in any manner as Holder, in its sole discretion,
may see fit, all of the Shares of the Stockholder for the Stockholder and in the
Stockholder's name, place and stead, at any annual, special or other meeting or
action of the stockholders of Company or at any adjournment thereof or pursuant
to any consent of the stockholders of Company in lieu of a meeting or otherwise,
with respect to any issue brought before stockholders of Company. The parties
acknowledge and agree that, except as specifically provided for in Section 6(c)
hereof, neither Holder, nor Holder's successors, assigns, subsidiaries,
divisions, employees, officers, directors, stockholders, agents and affiliates
shall owe any duty to, whether in law or otherwise, or incur any liability of
any kind whatsoever, including without limitation, with respect to any and all
claims, losses, demands, causes of action, costs, expenses (including reasonable
attorney's fees) and compensation of any kind or nature whatsoever to the
Stockholder in connection with, as a result of or otherwise relating to any vote
(or refrain from voting) by Holder of the Shares subject to the irrevocable
proxy hereby granted to Holder at any annual, special or other meeting or action
or the execution of any consent of the stockholders of Company. If the issue on
which Holder is voting pursuant to the irrevocable proxy is the proposal to
approve the Merger and the Merger Agreement, Holder shall vote for such proposal
or give its consent, as applicable.
(b) Notwithstanding the foregoing grant to Holder of the
irrevocable proxy, in the event Holder elects not to exercise its rights to vote
the Shares pursuant to the irrevocable proxy, upon the request of Holder the
Stockholder agrees to vote all of his Shares during the term of this Agreement:
(i) if the issue on which the Stockholder is requested to vote is a proposal to
approve the Merger and the Merger Agreement, in favor of or give its consent to,
as applicable, the Merger and the Merger Agreement or (ii) otherwise in the
manner directed by Holder at any annual, special or other meeting or action of
the stockholders of Company in lieu of a meeting or otherwise with respect to
any issue brought before the stockholders of Company.
(c) If Holder (i) exercises its right to vote the Shares pursuant
to the irrevocable proxy as provided in Section 6(a) other than with respect to
the approval of the Merger, or (ii) instructs the Stockholder how to vote
pursuant to Section 6(b)(ii), other than with respect to the approval of the
Merger, and such Stockholder votes his Shares in accordance with such
instruction, Holder agrees to indemnify and hold harmless such Stockholder from
any and all claims, liabilities, losses, demands, causes of action, expenses
(including reasonable attorneys' fees) that arise from or occur by reason of
such actions.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the Stockholder shall be free to act in his capacity as a member of
the Board of Directors of the Company and to discharge his fiduciary duty as
such.
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7. Survival. All rights and authority granted herein by the Stockholder
shall survive the death or incapacity of the Stockholder. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective spouses, heirs, personal representatives, successors and assigns.
Holder may, without the consent of the Stockholder, assign its rights (but not
its obligations) hereunder to any wholly owned subsidiary of Holder, but
otherwise the consent of the Stockholder shall be required to assign the rights
of Holder hereunder. The consent of Holder shall be required to assign the
rights of the Stockholder hereunder.
8. Further Assurances. The Stockholder shall cooperate with Holder and
execute and deliver any additional documents necessary, in the reasonable
opinion of Holder or its counsel, to (i) obtain any third party approvals
necessary to consummation of the exercise of the Option, including, without
limitation, approvals under the HSR Act, if applicable, (ii) complete the sale
and transfer of the Shares with respect to which the Option is exercised and the
vesting of title to such Shares in Holder and (iii) evidence the irrevocable
proxy granted herein with respect to the Shares.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, postage prepaid, addressed to the
respective party at the following addresses:
To Holder: United Parcel Service, Inc.
00 Xxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
with a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
To the Stockholder: Xxxx X. Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
with a copy to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
10. Termination. Except as provided in the following sentence, this
Agreement and the Option, other than the provisions of Section 6(c), shall
terminate on the earlier of: (i) the delivery by Holder to the Stockholder of
written notice of Holder's determination to terminate this Agreement and (ii)
the termination of the Merger Agreement in accordance with the terms
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thereof (the "Termination Date"). Notwithstanding anything to the contrary in
this Agreement or any other agreement, if during the term of this Agreement an
Acquisition Event shall occur or if the Merger Agreement shall have been
terminated by Holder in accordance with Section 8.1(d) or 8.1(f)(ii) of the
Merger Agreement (the date of the earlier of the occurrence or termination being
the "Trigger Date"), this Agreement and the Option shall remain in full force
and effect and the Termination Date of this Agreement shall automatically extend
to the date which occurs 9 months from the Trigger Date.
11. Remedies. Each of the parties hereto recognizes and acknowledges
that a breach by it of any covenants or agreements contained in this Agreement
will cause the other party to sustain damages for which it would not have an
adequate remedy at law for money damages, and therefore each of the parties
hereto agrees that in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and agreements
and injunctive and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity.
12. Commissions. Each of the parties hereto represents and warrants that
there are no agreements or claims for brokerage commissions or finders' fees in
connection with the transactions contemplated by this Agreement, and the
Stockholder and Holder will respectively pay or discharge and will indemnify
each other for brokerage commissions or finders' fees incurred by reason of any
action taken by such indemnifying party.
13. Survival of Representations. Notwithstanding any provision of this
Agreement to the contrary, all representations and warranties made by the
Stockholder in this Agreement and the covenants set forth in Sections 6(c),12
and 19 hereof shall survive (i) any exercise of the Option by Holder, (ii) any
vote by Holder of the Shares pursuant to the irrevocable proxy or (iii) any vote
by the Stockholder in accordance with Section 6(b); provided, however, that all
representations and warranties shall not survive and shall terminate upon
termination of this Agreement pursuant to Section 10 hereof.
14. Changes in Capitalization. For all purposes of this Agreement, the
Shares shall include any securities for cash or other property issued or
exchanged with respect to such Shares upon any recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, dividend in cash or stock or other property, split-up or
combination of the securities of Company, or any other change in its capital
structure and shall also include all Shares of Common Stock issued to the
Stockholder after the date hereof pursuant to the exercise by the Stockholder of
stock options.
15. Compliance with Securities Laws. The parties agree that any transfer
of the Shares effected hereunder shall be effected so as to comply with all
applicable federal and state securities laws.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
conflicts of laws principles thereof.
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17. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute a single agreement.
18. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any current or future law, and if the
rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. In lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement, a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible, and the parties hereto
request the court or any arbitrator to whom disputes relating to this Agreement
are submitted to reform the otherwise illegal, invalid or unenforceable
provision in accordance with this Section 18.
19. Agreements to Notify.
(a) The Stockholder and Holder agree to notify promptly the
Escrow Agent of the termination of this Agreement and agree to deliver to the
Escrow Agent any written instructions that may reasonably be requested by the
Escrow Agent relating to the release of the Shares upon the termination of this
Agreement.
(b) The Stockholder agrees to notify Holder promptly, and in any
event, without limiting the foregoing undertaking, prior to any exercise of the
Option by Holder, of any commencement or threatened commencement known to the
Stockholder by any person, entity or governmental authority or agency of any
suit, action or legal proceedings with respect to the Option.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed as of the date first above written.
XXXX X. XXXXX:
/s/ XXXX X. XXXXX
UNITED PARCEL SERVICE, INC.
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
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SCHEDULE 4.1
Pursuant to the Securities Exchange Act of 1934, as amended, the Stockholder is
treated as having beneficial ownership in the following shares of Company Common
Stock:
1) 961,401 shares of Company Common Stock, the record owner of which is the Xxxx
X. Xxxxx 1999 Grantor Retained Annuity Trust.
2) 961,041 shares of Company Common Stock, the record owner of which is the
Xxxxxx Xxxxx 1999 Grantor Retained Annuity Trust.
3) 372,599 shares of Company Common Stock, the record owner of which is Xxxxxx
Xxxxx.
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