Exhibit 3
AMENDED AND RESTATED
OPTION AGREEMENT
THIS AMENDED AND RESTATED OPTION AGREEMENT (this
"Agreement") is made and entered into as of the 27th day of
August 1997, by and among The Xxxx Company, a California
corporation ("TKC"), The Xxxx Holding Company, a California
corporation ("Optionor"), and a wholly-owned subsidiary of
TKC, Xxx Xxxxx ("Optionee"), and Xxxx Real Estate Services
(formerly KMS Holding Corporation), a Delaware corporation
("KRES").
BACKGROUND
A. Optionee was granted an option (the "KRES
Option") to purchase shares of the outstanding common stock
of KRES ("KRES Common Stock"), pursuant to an Amended and
Restated Option Agreement, dated as of November 23, 1994
(the "KRES Option Agreement").
X. XXXX entered into an Agreement and Plan of
Reorganization, dated as of May 13, 1997 (the
"Reorganization Agreement"), which provides for the merger
(the "Merger") of CBC Acquisition Corporation, a Delaware
corporation ("Acquisition Corporation") and wholly-owned
subsidiary of CB Commercial Real Estate Services Group,
Inc., a Delaware corporation ("CBC"), with and into KRES
with KRES surviving the Merger as a wholly-owned subsidiary
of CBC.
C. To effect the Merger, the Reorganization
Agreement provides that each share of KRES Common Stock will
be converted into (i) .776175 shares of CBC Common Stock,
$.01 par value ("CBC Common Stock") and (ii) .083238
warrants exercisable for a term of seven years from the
Closing Date (as defined in the Reorganization Agreement) to
acquire
from CBC shares of CBC Common Stock, each whole
warrant being exercisable for one share of CBC Common Stock
at an exercise price of $30.00 per share of CBC Common Stock
(each, a "Warrant").
D. In connection with the consummation of the
transactions contemplated by the Reorganization Agreement
and upon the terms and conditions hereinafter set forth,
TKC, Optionor and Optionee desire to revise and amend the
KRES Option Agreement so that Optionee's KRES Option to
purchase from Optionor 672,000 shares of KRES Common Stock
will be converted into (i) an option to purchase from
Optionor 521,590 shares of CBC Common Stock and (ii) the
right to obtain from Optionor in connection with such option
exercise 55,936 Warrants to purchase shares of CBC Common
Stock from CBC.
AGREEMENT
In consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived
herefrom, the parties hereto agree as follows:
1. Continuation of Option. Effective upon the
consummation of the Merger, Optionee's KRES Option to
purchase 672,000 shares of KRES Common Stock from Optionor
shall be converted into the right and option (the "Option")
to (i) purchase, on the terms and conditions hereinafter set
forth, all or any part of an aggregate of 521,590 shares of
CBC Common Stock from Optionor at an exercise price of $5.84
per share of CBC Common Stock (the "Price"), exercisable
from time to time prior to May 30, 2001 and (ii) obtain from
Optionor in connection with each exercise of the Option
.1072413 Warrants per share of CBC Common Stock acquired
upon such exercise, using conventional rounding to the
nearest whole Warrant (the "Warrant Ratio"). Optionor
hereby agrees not to sell any shares of CBC Common Stock or
exercise or transfer any Warrants if, as a result of such
sale, exercise or transfer, Optionor will not continue to
hold a sufficient number of shares of CBC Common Stock and
Warrants to enable Optionee to exercise the Option in full
immediately after such sale and to receive the appropriate
number of Warrants in connection with such exercise, as
adjusted by Section 5 of this Agreement.
2. Exercisability of Option. Except as otherwise
provided in this Agreement, the Option may be exercised from
time to time to purchase all or any part of 521,590 shares of
CBC Common Stock owned by Optionor, provided, however, that
the Option may not be exercised as
provided, however, that the Option may not be exercised as to
fewer than 100 shares at any one time unless the number of
shares purchased is the total number available at that time
for purchase. If Optionee does not purchase all of the
shares of CBC Common Stock which he is entitled to purchase,
Optionee's right to purchase any shares not so purchased and
the corresponding right to receive Warrants shall continue
until May 30, 2001, unless, prior to such time, the Option
is extended or terminated in accordance with the provisions
hereof. In no event may the Option be exercised after May 30,
2001, unless the Optionor and Optionee agree in writing to
extend the time of exercise of the Option. The Option may
be exercised only as to whole shares (fractional share
interests shall be disregarded except that they may be
accumulated).
3. Method of Exercise and Payment. Each exercise of the
Option shall be by means of written notice of exercise
delivered to Optionor, specifying the number of whole shares
with respect to which the Option is being exercised and the
corresponding number of Warrants to be transferred by
Optionor to Optionee in connection with such exercise,
together with any written statements required pursuant to
Section 6 of this Agreement and a payment, in cash or by
check payable to the order of Optionor, in an amount equal
to the Price multiplied by the number of shares with respect
to which the Option is being exercised.
4. Non-Assignability of Option. The Option and all other
rights and privileges conferred hereby are not transferable
or assignable, may not be offered, sold, pledged,
hypothecated or otherwise disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to
execution, attachment, garnishment, levy or similar process
and any such attempted action shall be void. During
Optionee's lifetime, the Option may be exercised only by
Optionee or his Personal Representative (as defined below).
After Optionee's death, the Option may be exercised by
Optionee's transferees by will or under the laws of descent
and distribution, and not otherwise. "Personal
Representative" shall mean the person or persons who, upon
the disability or incompetence of Optionee, shall have
acquired on behalf of Optionee, by legal proceeding or
otherwise, the power to exercise the rights and receive the
benefits specified in this Agreement.
5. Adjustments and Other Rights.
a. If the shares of CBC Common Stock and Warrants
owned by Optionor are increased, decreased or changed into, or
exchanged for, a different number or kind of shares,
warrants or securities of CBC through a reorganization or
merger in which CBC is the surviving entity, or through a
combination, recapitalization, reclassification, stock
split, stock dividend, stock consolidation or otherwise,
then, except to the extent that any such adjustment or
change is a result of additional consideration being given
by Optionor, a similar and pro rata adjustment shall be made
in the number and kind of shares, warrants or securities
that are subject to the Option and an appropriate adjustment
shall be made to the Price.
b. If the Board of Directors of CBC takes action to
(i) dissolve or liquidate CBC or (ii) reorganize, merge or
consolidate CBC with one or more corporations which will
result in CBC not being the surviving corporation, then the
Option shall terminate and be
forfeited to the extent it is not exercised prior to the
effective date of such dissolution, liquidation, reorganization,
merger or consolidation or, upon any event specified in clause
(ii) and with the consent of the Optionor and Optionee, be
converted into an option, with appropriate adjustments, to
acquire the securities or other consideration into which the
CBC Common Stock and Warrants are converted in connection
with such event.
c. If CBC pays a special and nonrecurring cash
dividend on the CBC Common Stock (the "Special Dividend") as
described by the Financial Accounting Standards Board's
Emerging Issues Task Force Issue 90-9 ("EITF 90-9") and the
adjustments set forth in this Section 5(c) may be made
without causing a new measurement date (as described in EITF
90-9) to occur for purposes of determining compensation
expense in connection with the Option, then the Price per
share shall be adjusted downward by an amount which shall be
necessary in order to make the ratio of the Price to the
Fair Market Value of a share of CBC Common Stock on the day
prior to the record date for the Special Dividend equal to
the same ratio five business days after the record date for
the Special Dividend. For purposes of this Section 5(c),
"Fair Market Value" on a specific date shall mean (i) if the
CBC Common Stock is listed or admitted to trade on a
national securities exchange, the average closing price of
the CBC Common Stock on the Composite Tape, as published in
the Western Edition of The Wall Street Journal, of the
principal national securities exchange on which the CBC
Common Stock is so listed or admitted to trade, on the five
trading days immediately preceding such date; (ii) if the
CBC Common Stock is not listed or admitted to trade on a
national securities exchange, the average closing price for
the CBC Common Stock on the five trading days immediately
preceding such date, as furnished by the National
Association of Securities Dealers, Inc. (the "NASD") through
the NASDAQ National Market Reporting System or a similar
organization if the NASD is no longer reporting such
information; (iii) if the CBC Common Stock is not listed or
admitted to trade on a national securities exchange and is
not reported on the National Market Reporting System, the
mean between the bid and asked price for the CBC Common
Stock on the five trading days immediately preceding such
date, as furnished by the NADA; or (iv) if the CBC Common
Stock is not listed or admitted to trade on a national
securities exchange, is not reported on the National Market
Reporting System and if bid and asked prices for the CBC
Common Stock are not furnished by the NASD or a similar
organization, the value determined by the Board of Directors
of the Optionor.
d. If there is a reallocation of Warrants as
contemplated by Section 10.12(c) of the Reorganization Agreement,
then a similar pro rata adjustment shall be made in the Warrant
Ratio.
6. Application of Securities Laws. The transfer of shares
of CBC Common Stock pursuant to this Agreement is subject to
all applicable federal and state laws, rules and regulations
and to such approvals by any regulatory or governmental
agency, including, without limitation, "no action" positions
of the Securities and Exchange Commission (the
"Commission"), which may be necessary or advisable in
connection therewith. Without limiting the generality of
the foregoing, no shares of CBC Common Stock may be
purchased pursuant to the Option unless and until any then
applicable requirements of the Commission, the California
Department of Corporations and any other regulatory agencies
(including any other state securities law commissioners
having jurisdiction over the transfer) and any exchange upon
which the CBC Common Stock may be listed, shall have been
fully satisfied.
7. Notices. Any notice to be given to Optionor under the
terms of this Agreement shall be in writing and addressed to
the Secretary of Optionor at its principal office located at
0000 Xxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 and
any notice to be given to Optionee shall be addressed to him
at the address given beneath his signature hereto, or at
such other address as either party may hereafter designate
in writing to the other party.
8. Legend on Stock Certificate. Each certificate
representing shares of CBC Common Stock now or hereafter
held by Optionor shall be stamped with a legend in
substantially the following form:
"This certificate is transferable only upon
compliance with the provisions of that
certain Amended and Restated Option
Agreement, dated as of August 27, 1997, by
and among The Xxxx Company, The Xxxx Holding
Company, Xxx Xxxxx and KRES, a copy of which
is on file in the office of CB Commercial
Real Estate Services Group, Inc."
9. Laws Applicable to Construction. This Agreement shall
be governed by, and construed and enforced in accordance
with, the laws of the State of California.
10. Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties hereto
pertaining to the subject matter hereof and supersedes any
and all prior agreements, whether written or oral, relating
hereto, including, without limitation, the KRES Option
Agreement. KRES acknowledges that any rights it had under
the KRES Option Agreement are hereby terminated.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first above written.
THE XXXX COMPANY,
a California corporation
By: /s/ Xxxxxx X. Xxxx
--------------------------
Xxxxxx X. Xxxx
Chairman of the Board and
Chief Executive Officer
THE XXXX HOLDING COMPANY,
a California corporation
By: /s/ Xxxxxx X. Xxxx
---------------------------
Xxxxxx X. Xxxx
President
XXX XXXXX
/s/ Xxx Xxxxx
------------------------------
Xxx Xxxxx
00 Xxxxxxx Xxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
XXXX REAL ESTATE SERVICES,
a Delaware corporation
By: /s/ Xxx Xxxxx
-----------------------------
Name: Xxx Xxxxx
Title: CEO
Accepted and Agreed:
THE XXXX COMPANY STOCK TRUST
By: /s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx
Trustee
/s/ Xxxxxx X. Xxxx
-----------------------------
Xxxxxx X. Xxxx
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Amended and Restated Option Agreement by The Xxxx Company
and The Xxxx Holding Company, I, Xxxxx Xxxxx, the spouse of
Xxx Xxxxx, do hereby join with my spouse in executing the
foregoing Amended and Restated Option Agreement and do
hereby agree to be bound by all of the terms and provisions
thereof.
Dated as of August 27, 1997 /s/ Xxxxx Xxxxx
--------------------------
Xxxxx Xxxxx
