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STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of September 23, 1995 (this
"Agreement"), between Republic New York Corporation, a Maryland corporation
("Grantee"), and Brooklyn Bancorp, Inc., a Delaware corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer are entering into an Agreement and
Plan of Merger, dated as of the date hereof (the "Plan"), which is being
executed by the parties hereto simultaneously with the execution of this
Agreement; and
WHEREAS, as a condition and inducement to Grantee's entering
into the Plan and in consideration therefor, Issuer has agreed to grant
Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Plan, the
parties hereto agree as follows:
SECTION 1. Grant; Option Price. Issuer hereby grants to
Grantee an irrevocable option (the "Option") to purchase, subject to the
terms hereof, up to 2,388,000 fully paid and nonassessable shares of Common
Stock, par value $0.01 per share ("Common Stock"), of Issuer at a price of
$34.50 per share (the "Option Price"); provided, however, that each time
Issuer issues or agrees to issue (other than pursuant to options or
warrants to issue Common Stock in effect as of the date hereof) any shares
of Common Stock at a price less than the then current Option Price, the
then current Option Price shall be reduced to equal such lesser price. The
number of shares of Common Stock that may be received upon the exercise of
the Option and the Option Price are also subject to adjustment as set forth
in Section 5.
SECTION 2. Exercise and Termination. (a) Grantee may
exercise the Option, in whole or part, at any time and from time to time
following the occurrence of a Purchase Event (as defined below); provided
that the Option shall terminate and be of no further force and effect upon
the earliest to occur of (i) the time immediately prior to the Effective
Time, (ii) 12 months after the first occurrence of a Preliminary Purchase
Event, except that it shall be 18 months following the Preliminary Purchase
Event (as defined below) if it is described in Section 2(b)(i) hereof, or
(iii) 12 months after the date hereof if there
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has been no occurence of a Purchase Event or a Preliminary Purchase Event.
The events described in clauses (i) - (iii) in the preceding sentence are
hereinafter collectively referred to as an "Exercise Termination Event".
(b) The term "Preliminary Purchase Event" shall mean any of
the following events or transactions occurring after the date hereof:
(i) Issuer or XxxxxXxxx Federal Savings Bank (the "Company
Bank") without having received Grantee's prior written consent, shall
have entered into an agreement to engage in an Acquisition
Transaction (as defined below) with any person (the term "person" for
purposes of this Agreement having the meaning assigned thereto in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Securities Exchange Act"), and the rules and
regulations thereunder) other than Grantee or any of its subsidiaries
(each a "Grantee Subsidiary") or the Board of Directors of Issuer
shall have recommended that the shareholders of Issuer approve or
accept any Acquisition Transaction with any person other than Grantee
or any Grantee Subsidiary. For purposes of this Agreement,
"Acquisition Transaction" shall mean (x) a merger or consolidation,
or any similar transaction, involving Issuer or the Company Bank, (y)
a purchase, lease or other acquisition of all or substantially all of
the assets of Issuer or the Company Bank or (z) a purchase or other
acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or more of the
voting power of Issuer or the Company Bank; provided that the term
"Acquisition Transaction" does not include any internal merger or
consolidation involving only Issuer or the Company Bank and any
subsidiary of Issuer;
(ii) Any person (other than Grantee or any Grantee Subsidiary)
shall have acquired beneficial ownership or the right to acquire
beneficial ownership of Common Stock representing 10% or more of the
voting power of the Issuer or the Company Bank (the term "beneficial
ownership" for purposes of this Agreement having the meaning assigned
thereto in Section 13(d) of the Securities Exchange Act and the rules
and regulations issued thereunder);
(iii) Any person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its shareholders,
by public announcement or
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written communication that is or becomes the subject of public
disclosure, to engage in an Acquisition Transaction (including any
situation in which 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 (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 Common Stock
representing 10% or more of the voting power of the Issuer or the
Company Bank (such an offer being referred to herein as a "Tender
Offer" or an "Exchange Offer", respectively));
(iv) After a proposal is made by a third party to Issuer or its
shareholders to engage in an Acquisition Transaction, Issuer shall
have breached any covenant or obligation contained in the Plan and
such breach would entitle Grantee to terminate the Plan or the
holders of Common Stock shall not have approved the Plan at the
meeting of such stockholders held for the purpose of voting on the
Plan, such meeting shall not have been held or shall have been
canceled prior to termination of the Plan 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 Plan; or
(v) Any person other than Grantee or any Grantee Subsidiary,
other than in connection with a transaction to which Grantee has
given its prior written consent, shall have filed an application or
notice with any governmental authority or regulatory or
administrative agency or commission (each, a "Governmental
Authority") for approval to engage in an Acquisition Transaction.
(c) The term "Purchase Event" shall mean either of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person other than Grantee or any
Grantee Subsidiary of beneficial ownership of Common Stock
representing 25% or more of the voting power of Issuer or the Company
Bank; or
(ii) The occurrence of a Preliminary Purchase Event described in
Section 2(b)(i) except that the percentage referred to in clause (z)
shall be 25%.
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(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event; provided,
however, that the giving of such notice by Issuer shall not be a condition
to the right of Grantee to exercise the Option.
(e) In the event that Grantee is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice (the "Option
Notice" and the date of which being hereinafter referred to as the "Notice
Date") specifying (i) the total number of shares of Common Stock it will
purchase pursuant to such exercise, (ii) the time (which shall be on a
business day that is not less than three nor more than thirty business days
from the Notice Date) on which the closing of such purchase shall take
place (the "Closing Date") and (iii) a place at which the closing of such
purchase shall take place; provided, that, if prior notification to or
approval of any Governmental Authority is required in connection with such
purchase (each, a "Notification" or an "Approval," as the case may be),
(a) Grantee shall promptly file the required notice or application for
approval ("Notice/Application"), (b) Grantee shall expeditiously process
the Notice/Application and (c) for the purpose of determining the Closing
Date pursuant to clause (ii) of this sentence, the period of time that
otherwise would run from the Notice Date shall instead run from the later
of (x) in connection with any Notification, the date on which any required
notification periods have expired or been terminated and (y) in connection
with any Approval, the date on which such approval has been obtained and
any requisite waiting period or periods shall have expired. For purposes
of Section 2(a), any exercise of the Option shall be deemed to occur on the
Notice Date relating thereto. On or prior to the Closing Date, Grantee
shall have the right to revoke its exercise of the Option in the event that
the transaction constituting a Purchase Event that gives rise to such right
to exercise shall not have been consummated.
(f) At the closing referred to in Section 2(e), Grantee shall
pay to Issuer the aggregate purchase price for the shares of Common Stock
specified in the Option Notice in immediately available funds by wire
transfer to a bank account designated by Issuer; provided, however, that
failure or refusal of Issuer to designate such a bank account shall not
preclude Grantee from exercising the Option.
(g) At such closing, simultaneously with the delivery of
immediately available funds as provided in Section 2(f), Issuer shall
deliver to Grantee a certificate
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or certificates representing the number of shares of Common Stock specified
in the Option Notice and, if the Option should be exercised in part only, a
new Option evidencing the rights of Grantee thereof to purchase the balance
of the shares of Common Stock purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing
hereunder shall be endorsed with a restrictive legend substantially as
follows:
The transfer of the shares represented by this
certificate is subject to resale restrictions arising
under the Securities Act of 1933, as amended, and
applicable state securities laws and to certain provi-
sions of a Stock Option Agreement between Republic New
York Corporation and Brooklyn Bancorp, Inc. ("Issuer"),
dated as of September 23, 1995. A copy of such agreement
is on file at the principal office of Issuer and will be
provided to the holder hereof without charge upon receipt
by Issuer of a written request therefor.
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act and applicable state securities laws in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to Issuer a copy of
a letter from the staff of the Securities and Exchange Commission (the
"SEC") and a letter from any Governmental Authority responsible for
administering any applicable state securities laws, or, in lieu of the
foregoing, an opinion of counsel, in form and substance satisfactory to
Issuer, to the effect that such legend is not required for purposes of the
Securities Act and applicable state securities laws; (ii) the reference to
the provisions of this Agreement in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares
have been sold or transferred in compliance with the provisions of this
Agreement and under circumstances that do not require the retention of such
reference; and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required
by law.
(i) Upon the giving by Grantee to Issuer of an Option Notice
and the tender of the applicable purchase price in immediately available
funds on the Closing Date, Grantee shall be deemed to be the holder of
record of the
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number of shares of Common Stock specified in the Option Notice,
notwithstanding that the stock transfer books of Issuer shall then be
closed or that certificates representing such shares of Common Stock shall
not then actually be delivered to Grantee. Issuer shall pay all expenses
and any and all United States federal, state and local taxes and other
charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of Grantee.
SECTION 3. Reservation of Common Stock; Regulatory Compliance.
Issuer agrees: (i) that it shall at all times until the termination of
this Agreement have reserved for issuance upon the exercise of the Option
that number of authorized and reserved shares of Common Stock equal to the
maximum number of shares of Common Stock at any time and from time to time
issuable hereunder, all of which shares will, upon issuance pursuant
hereto, be duly authorized, validly issued, fully paid, nonassessable, and
delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights; (ii) that it will not,
by amendment of its certificate of incorporation 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 (x) complying with all premerger notification,
reporting and waiting period requirements specified in 15 U.S.C. sec. 18a
and regulations promulgated thereunder and (y) in the event, under the Home
Owners' Loan Act, as amended ("HOLA") the Bank Holding Company Act of 1956,
as amended ("BHC Act"), or the Change in Bank Control Act of 1978, as
amended, or any state banking law, prior approval of or notice to any
Governmental Authority is necessary before the Option may be exercised,
cooperating with Grantee in preparing such applications or notices and
providing such information to each such Governmental Authority as it may
require) in order to permit Grantee to exercise the Option and Issuer duly
and effectively to issue shares of Common Stock pursuant hereto; and
(iv) to take all action provided herein to protect the rights of Grantee
against dilution.
SECTION 4. Exchange. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Grantee, 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, on the same terms
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and subject to the same conditions as are set forth herein, in the
aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any 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.
SECTION 5. Adjustment. The number of shares of Common Stock
purchasable upon the exercise of the Option shall be subject to adjustment
from time to time as follows:
(a) In the event of any change in the Common Stock by reason
of stock dividends, split-ups, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of shares or the
like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision
shall be made so that, in the event that any additional shares of
Common Stock are to be issued or otherwise to become outstanding as a
result of any such change (other than pursuant to an exercise of the
Option), the number of shares of Common Stock that remain subject to
the Option shall be increased so that, after such issuance and
together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the
foregoing changes in the Common Stock), it equals 19.9% of the number
of shares of Common Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock purchasable
upon exercise hereof is adjusted as provided in this Section 5, the
Option Price shall be adjusted by multiplying the Option Price by a
fraction, the numerator of which shall be equal to the number of
shares of Common Stock purchasable prior to the adjustment and the
denominator of which shall be equal to the number of shares of Common
Stock purchasable after the adjustment. If the Option Price
adjustment contained in the proviso in Section 1 is applicable to any
particular issuance of Common Stock, such Option Price
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adjustment shall be applied to further decrease the Option Price.
SECTION 6. Registration Rights. (a) Upon the occurrence of a
Purchase Event that occurs prior to an Exercise Termination Event, Issuer
shall, at the request of Grantee (whether on its own behalf or on behalf of
any subsequent holder of the Option (or part thereof) or any of the shares
of Common Stock issued pursuant hereto), promptly prepare, file and keep
current a registration statement under the Securities Act covering any
shares issued and issuable pursuant to the Option and shall use its best
efforts to cause such registration statement to become effective, and to
remain current and effective for a period not in excess of 180 days from
the day such registration statement first becomes effective, in order to
permit the sale or other disposition of any shares of Common Stock issued
upon total or partial exercise of the Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee; provided,
however, that Issuer may postpone filing a registration statement relating
to a registration request by Grantee under this Section 6 for a period of
time (not in excess of 30 days) if in its judgment such filing would
require the disclosure of material information that Issuer has a bona fide
business purpose for preserving as confidential. Grantee shall have the
right to demand two such registrations. The foregoing notwithstanding, if,
at the time of any request by Grantee for registration of Option Shares as
provided above, Issuer is in the process of registration with respect to an
underwritten public offering of shares of Common Stock, and if in the good
faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offering
or inclusion of the Option Shares would interfere materially with the
successful marketing of the shares of Common Stock offered by Issuer, the
number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; provided, however, that after
any such required reduction the number of Option Shares to be included in
such offering for the account of Grantee shall constitute at least 33 1/3%
of the total number of shares of Grantee and Issuer covered in such
registration statement; provided further, however, that if such reduction
occurs, then Issuer shall file a registration statement for the balance as
promptly as practicable thereafter as to which no reduction pursuant to
this Section 6(a) shall be permitted or occur and the Grantee shall
thereafter be entitled to one additional registration statement. Grantee
shall provide all information reasonably requested by Issuer for inclusion
in any registration statement to be filed hereunder. In
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connection with any such registration, Issuer and Grantee shall provide
each other with representations, warranties, indemnities and other
agreements customarily given in connection with such registrations. If
requested by Grantee in connection with such registration, Issuer and
Grantee shall become a party to any underwriting agreement relating to the
sale of such shares, but only to the extent of obligating themselves in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements. Notwithstanding the
foregoing, if Grantee revokes any exercise notice or fails to exercise any
Option with respect to any exercise notice pursuant to Section 2(e), Issuer
shall not be obligated to continue any registration process with respect to
the sale of Option Shares issuable upon the exercise of such Option and
Grantee shall not be deemed to have demanded registration of Option Shares.
(b) In the event that Grantee requests Issuer to file a
registration statement following the failure to obtain any approval
required to exercise the Option as described in Section 9, the closing of
the sale or other disposition of the Common Stock or other securities
pursuant to such registration statement shall occur substantially
simultaneously with the exercise of the Option.
SECTION 7. Optional Fees. (a) After the occurrence of a
Purchase Event described in Section 2(c)(ii) except that the percentage
referred to shall be 65% that occurs prior to an Exercise Termination Event
(the "Fee Trigger Event"), at the request of Grantee, Issuer shall pay to
Grantee $2 million in cash within 5 business days of such request (the "$2
Million Fee"). If Grantee makes such a request and the Issuer has made
such payment, Grantee's right to exercise this Option for Common Stock
shall terminate immediately. After the consummation of the transaction
giving rise to a Fee Trigger Event, at the request of Grantee, Issuer
shall repurchase the Option from Grantee (notwithstanding that it is not
then exercisable for shares of Common Stock) at a price (the "Option
Repurchase Price") equal to $15 million in cash less any $2 Million Fee
paid pursuant to the preceding sentence within 5 business days of such
request.
(b) Grantee may exercise its right to receive the $2 Million
Fee pursuant to this Section 7 by providing to Issuer, at its principal
office, a written notice to such effect. As promptly as practicable, and
in any event within five business days after the receipt of such notice
relating thereto, Issuer shall deliver or cause to be delivered to Grantee
the $2 million in cash. Grantee may exercise its
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right to require Issuer to repurchase the Option pursuant to this Section 7
by surrendering for such purpose to Issuer, at its principal office, a copy
of this Agreement accompanied by a written notice stating that Grantee
elects to require Issuer to repurchase the Option in accordance with the
provisions of this Section 7. As promptly as practicable, and in any event
within five business days after the surrender of the Option and the receipt
of such notice relating thereto, Issuer shall deliver or cause to be
delivered to Grantee the Option Repurchase Price.
(c) Issuer shall not enter into any agreement with any party
(other than Grantee or a Grantee Subsidiary) for an Acquisition Transaction
unless the other party thereto assumes all the obligations of Issuer
pursuant to this Section 7 in the event that Grantee elects, in its sole
discretion, to require such other party to perform such obligations.
SECTION 8. Substitute Option. (a) In the event that prior to
an Exercise Termination Event, Issuer shall enter into an agreement (i) to
consolidate or merge with any person, other than Grantee or a Grantee
Subsidiary, and shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such merger,
the then outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or any
other property or the then outstanding shares of Common Stock shall after
such merger represent less than 50% of the outstanding shares and share
equivalents of the merged company, or (iii) to sell or otherwise transfer
all or substantially all of its or any Issuer Subsidiary's assets to any
person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision
so that the Option shall, upon the consummation of such transaction and
upon the terms and conditions set forth herein, be converted into, or
exchanged for, an option (the "Substitute Option"), at the election of
Grantee, of either (x) the Acquiring Corporation (as defined below) or
(y) any person that controls the Acquiring Corporation (the Acquiring
Corporation and any such controlling person being hereinafter referred to
as the "Substitute Option Issuer").
(b) The Substitute Option shall be exercisable for such number
of shares of the Substitute Common Stock (as is hereinafter defined) as is
equal to the market/offer price (as defined below) multiplied by the number
of shares
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of the Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as is hereinafter defined). The exercise
price of the Substitute Option per share of the Substitute Common Stock
(the "Substitute Option Price") shall then be equal to the Option Price
multiplied by a fraction in which the numerator is the number of shares of
Common Stock for which the Option was theretofore exercisable and the
denominator is the number of shares for which the Substitute Option is
exercisable.
(c) The Substitute Option shall otherwise have the same terms
as the Option, provided that if the terms of the Substitute Option cannot,
for legal reasons, be the same as the Option, such terms shall be as
similar as possible and in no event less advantageous to Grantee, and
provided further, however, that the terms of the Substitute Option shall
provide that Grantee shall have an immediate right to require the Issuer to
repurchase the Substitute Option pursuant to Section 7.
(d) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving person, and (iii) the transferee of all or
any substantial part of the Issuer's assets (or the assets of any
Issuer Subsidiary);
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the
Substitute Option;
(iii) "Average Price" shall mean the average closing price of a
share of the 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 the 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 or is controlled by such merging person, as
Grantee may elect; and
(iv) The term "market/offer price" shall mean the highest of
(i) the price per share of Common Stock at
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which a tender offer or exchange offer therefor has been made after
the date hereof, (ii) the price per share of Common Stock paid or
to be paid by any third party pursuant to an agreement with Issuer
(whether by way of a merger, consolidation or otherwise), (iii)
the highest last sale price for shares of Common Stock within the
360-day period ending on the date in question which is reported by
The Wall Street Journal or, if not reported thereby, another
authoritative source, (iv) in the event of a sale of all or
substantially all of Issuer's assets, 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
independent investment banking firm selected by Grantee or the Owner,
as the case may be, divided by the number of shares of Common Stock
of Issuer outstanding at the time of such sale. In determining the
market/offer price, the value of consideration other than cash shall
be the value determined by a nationally recognized independent
investment banking firm selected by Grantee or the Owner, as the case
may be, whose determination shall be conclusive and binding on all
parties.
(e) 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 the Substitute Common Stock outstanding
immediately prior to the issuance 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 but for this clause (e),
the Substitute Option Issuer shall make a cash payment to Grantee equal to
the excess of (i) the value of the Substitute Option without giving effect
to the limitation in this clause (e) over (ii) the value of the Substitute
Option after giving effect to the limitation in the clause (e). This
difference in value shall be determined by a nationally recognized
investment banking firm selected by Grantee and the Substitute Option
Issuer.
SECTION 9. Extension. Notwithstanding Sections 2, 6 and 7, if
Grantee has given the notice referred to in one or more of such Sections,
the exercise of the rights specified in any such Section shall be extended
(a) if the exercise of such rights requires obtaining regulatory approvals
(including any required waiting periods) to the extent necessary to obtain
all regulatory approvals for the exercise of such rights, and (b) to the
extent necessary to avoid liability under Section 16(b) of the Securities
Exchange Act by reason of such exercise; provided that in no event shall
any closing date occur more
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than 18 months after the related Notice Date, and, if the closing date
shall not have occurred within such period due to the failure to obtain any
required approval by any Governmental Authority despite all reasonable
efforts of Issuer or the Substitute Option Issuer, as the case may be, to
obtain such approvals, the exercise of the Option shall be deemed to have
been rescinded as of the related Notice Date. In the event (a) Grantee
receives official notice that an approval of any Governmental Authority
required for the purchase and sale of the Option Shares will not be issued
or granted or (b) a closing date has not occurred within 18 months after
the related Notice Date due to the failure to obtain any such required
approval, Grantee shall be entitled to exercise the Option in connection
with the resale of the Option Shares pursuant to a registration statement
as provided in Section 6. Nothing contained in this Agreement shall
restrict Grantee from specifying alternative means of exercising rights
pursuant to Sections 2, 6 or 7 hereof in the event that the exercising of
any such rights shall not have occurred due to the failure to obtain any
required approval referred to in this Section 9.
SECTION 10. Representations and Warranties. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has the requisite 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
approved by the Board of Directors of Issuer and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been
duly executed and delivered by, and constitutes a valid and binding
obligation of, Issuer, enforceable against Issuer in accordance with its
terms, except as enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunc-
tive relief is subject to the discretion of the court before which any
proceeding may be brought; and
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with
its terms will have reserved for issuance upon the exercise of the Option,
that number of shares of Common Stock equal to the maximum
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number of shares of Common Stock at any time and from time to time issuable
hereunder, and all such shares, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, non-assessable, and will be
delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
SECTION 11. Assignment; Delegation. (a) Neither of the
parties hereto may assign any of its rights or delegate any of its obliga-
tions under this Agreement or the Option created hereunder to any other
person without the express written consent of the other party, except that
Grantee may assign this Agreement to a wholly owned subsidiary of Grantee
and Grantee may assign its rights hereunder in whole or in part after the
occurrence of a Preliminary Purchase Event; provided, however, that until
the date at which the Board of Governors of the Federal Reserve System
("FRB") has approved an application by Grantee under the BHC Act to acquire
the shares of Common Stock subject to the Option, Grantee may not assign
its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the
right to purchase in excess of 2% of the voting shares of Issuer, (iii) an
assignment to a single party (e.g., a broker or investment banker) for the
purpose of conducting a widely dispersed public distribution on Grantee's
behalf, or (iv) any other manner approved by the FRB. The term "Grantee"
as used in this Agreement shall also be deemed to refer to Grantee's per-
mitted assigns.
(b) Any assignment of rights of Grantee to any permitted
assignee of Grantee hereunder shall bear the restrictive legend at the
beginning thereof substantially as follows:
The transfer of the option represented by this assignment and
the related option agreement is subject to resale restrictions
arising under the Securities Act of 1933, as amended, and
applicable state securities laws and to certain provisions of a
Stock Option Agreement between Republic New York Corporation
and Brooklyn Bancorp, Inc. ("Issuer"), dated as of the
September 23, 1995. A copy of such agreement is on file at the
principal office of Issuer and will be provided to any
permitted assignee of the Option without charge upon receipt by
Issuer of a written request therefor.
It is understood and agreed that (i) the reference to the resale
restrictions of the Securities Act and applicable state securities laws in
the above legend shall be removed
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by delivery of substitute assignments without such reference if Grantee
shall have delivered to Issuer a copy of a letter from the staff of the SEC
and a letter from any Governmental Authority responsible for administering
any applicable state securities laws, or, in lieu of the foregoing, an
opinion of counsel, in form and substance satisfactory to Issuer, to the
effect that such legend is not required for purposes of the Securities Act
and applicable state securities laws; (ii) the reference to the provisions
of this Agreement in the above legend shall be removed by delivery of
substitute assignments without such reference if the Option has been sold
or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference;
and (iii) the legend shall be removed in its entirety if the conditions in
the preceding clauses (i) and (ii) are both satisfied. In addition, such
assignments shall bear any other legend as may be required by law.
SECTION 12. Reasonable Efforts. Each of Grantee and Issuer
will use its reasonable efforts to make all filings with, and to obtain
consents of, all third parties and Governmental Authorities necessary to
the consummation of the transactions contemplated by this Agreement.
SECTION 13. Equitable Relief. The parties hereto acknowledge
that damages would be an inadequate remedy for a breach of this Agreement
by either party hereto and that the obligations of the parties shall hereto
be enforceable by either party hereto through injunctive or 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.
SECTION 14. Severability. If any term, provision, covenant or
restriction contained in this Agreement is held by a court or a federal or
state regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated. If for
any reason such court or regulatory agency determines that Grantee is not
permitted to acquire, or Issuer is not permitted to repurchase pursuant to
Section 7, the full number of shares of Common Stock provided in Sec-
tion 1(a) (as adjusted pursuant hereto), it is the express intention of
Issuer to allow Grantee to acquire or to require Issuer
16
to repurchase such lesser number of shares as may be permissible, without
any amendment or modification hereof.
SECTION 15. Notices. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram, telecopy or telex, or by
registered or certified mail (postage prepaid, return receipt requested) at
the respective addresses of the parties set forth in the Plan.
SECTION 16. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 17. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement and shall be
effective at the time of execution.
SECTION 18. Expenses. Except as otherwise expressly provided
herein, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
SECTION 19. Entire Agreement. Except as otherwise expressly
provided herein or in the Plan, this Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with
respect thereof, written or oral. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in
this Agreement, expressed or implied, is intended to confer upon any party,
other than the parties hereto, and their respective successors except as
assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided herein.
SECTION 20. Defined Terms. Capitalized terms used in this
Agreement and not defined herein but defined in the Plan shall have the
meanings assigned thereto in the Plan.
SECTION 21. Plan Breach. Nothing contained in this Agreement
shall be deemed to authorize Issuer or Grantee to breach any provision of
the Plan.
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SECTION 22. Majority in Interest. In the event that any
selection or determination is to be made by Grantee or the Owner hereunder
and at the time of such selection or determination there is more than one
Grantee or Owner, such selection shall be made by a majority in interest of
such Grantees or Owners.
SECTION 23. Consummation. In the event of any exercise of the
option by Grantee, Issuer and such Grantee 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.
SECTION 24. No Shareholder Rights. Except to the extent
Grantee exercises the Option, Grantee shall have no rights to vote or
receive dividends or have any other rights as a shareholder with respect to
shares of Common Stock covered hereby.
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IN WITNESS WHEREOF, each of the parties has caused this Stock
Option Agreement to be executed on its behalf by their officers thereunto
duly authorized, all as of the date first above written.
REPUBLIC NEW YORK CORPORATION
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Vice Chairman & President
BROOKLYN BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman & CEO
