EXHIBIT 2.3
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of November 3, 1999 (the
"Agreement"), by and between Xxxxxx-Xxxxxxx Company, a Delaware corporation
("Issuer"), and American Home Products Corporation, a Delaware corporation
("Grantee").
WHEREAS, Issuer, Grantee and Wolverine Sub Corp., a Delaware
corporation ("Sub"), which is a direct wholly owned subsidiary of Grantee,
propose to enter into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"; capitalized terms used but not defined
herein shall have the meanings set forth in the Merger Agreement),
providing for, among other things, a merger (the "Merger") of Sub with and
into Issuer;
WHEREAS, as a condition and inducement to Grantee's willingness to
enter into the Merger Agreement and the AHP Stock Option Agreement, Grantee
has requested that Issuer agree, and Issuer has agreed, to grant Grantee
the Option (as defined below); and
WHEREAS, as a condition and inducement to Issuer's willingness to
enter into the Merger Agreement and this Agreement, Issuer has requested
that Grantee agree, and Grantee has agreed, to grant Issuer an option to
purchase shares of Grantee's common stock under the AHP Stock Option
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
in the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Options. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 127,940,538 shares (the "Option Shares") of
common stock, par value $1.00 per share, of Issuer (the "Shares") (being
14.9% of the number of Shares outstanding on October 31, 1999 before such
issuance), together with the associated purchase rights (the "Rights")
under the Amended and Restated Rights Agreement, dated as of March 25,
1997, between Issuer and First Chicago Trust Company of New York, as Rights
Agent (references to the Option Shares shall be deemed to include the
associated Rights), at a purchase price of $83.81 per Option Share (such
price, as adjusted if applicable, the "Purchase Price"). The number of
Option Shares that may be received upon the exercise of the Option and the
Purchase Price are subject to adjustment as set forth herein.
2. Exercise of Option. (a) Grantee may exercise the Option, in whole
or in part, at any time or from time to time following the occurrence of a
Purchase Event (as defined below); provided that, except as otherwise
provided herein, the Option shall terminate and be of no further force and
effect upon the earliest to occur of (i) the Effective Time, (ii) 6 months
after the first occurrence of a Purchase Event (or if, at the expiration of
such 6-months after the first occurrence of a Purchase Event, the Option
cannot be exercised by reason of any applicable judgment, decree, order,
law or regulation, 10 business days after such impediment to exercise shall
have been removed, but in no event under this clause (ii) later than the
first anniversary of the Purchase Event), (iii) termination of the Merger
Agreement under circumstances which do not and cannot result in Grantee's
becoming entitled to receive termination fees from Issuer pursuant to
Section 7.2(c) of the Merger Agreement of $1.8 billion or more; and (iv) 12
months after the termination of the Merger Agreement under circumstances
which could result in Grantee's becoming entitled to receive termination
fees from Issuer pursuant to Section 7.2(c)(ii)(ii) or 7.2(c)(C), unless
during such 12-month period, a Purchase Event shall occur. Notwithstanding
the foregoing, the Option shall terminate and not be exercisable if (x) at
the time the Merger Agreement is terminated, Grantee has the right to
terminate the Merger Agreement pursuant to Section 7.1(e) thereof and the
circumstances referred to in Section 7.2(c)(E)(II) of the Merger Agreement
are not applicable, and (y) prior to the 90th day following termination of
the Merger Agreement, Issuer does not (i) enter into a definitive agreement
with any third party with respect to a Business Combination or (ii)
consummate any Business Combination with respect to Grantee, which in each
case is more favorable to Issuer's stockholders (in their capacities as
such) from a financial point of view than the Merger, such determination of
whether such Business Combination is more favorable than the Merger shall
be made in accordance with the terms of Section 7.2(c)(iv) of the Merger
Agreement. The termination of the Option shall not affect any rights
hereunder which by their terms extend beyond the date of such termination.
(b) As used herein, a "Purchase Event" means an event the result
of which is that the total fee or fees required to be paid by Issuer to
Grantee pursuant to Section 7.2(c) of the Merger Agreement equals or
exceeds $1.8 billion.
(c) In the event Grantee wishes to exercise the Option, it
shall send to Issuer a written notice (the "Exercise 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 10 business days from such Notice Date for the closing of such
purchase (a "Closing"; and the date of such Closing, a "Closing Date");
provided that such closing shall be held only if (A) such purchase would
not otherwise violate or cause the violation of applicable law (including
the HSR Act), (B) no law, rule or regulation shall have been adopted or
promulgated, and no temporary restraining order, preliminary or permanent
injunction or other order, decree or ruling issued by a court or other
governmental authority of competent jurisdiction shall be in effect, which
prohibits delivery of such Option Shares (and the parties hereto shall use
their reasonable best efforts to have any such order, injunction, decree or
ruling vacated or reversed) and (C) any prior notification to or approval
of any other regulatory authority in the United States or elsewhere
required in connection with such purchase shall have been made or obtained,
other than those which if not made or obtained would not reasonably be
expected to result in a significant detriment to the Grantee and its
Subsidiaries taken as a whole or the Issuer and its Subsidiaries taken as a
whole. If the Closing cannot be consummated by reason of a restriction set
forth in clause (A), (B) or (C) above, notwithstanding the provisions of
Section 2(a), the Closing shall be held within 5 business days following
the elimination of such restriction.
3. Payment and Delivery of Certificates. On each Closing Date,
Grantee shall 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 Option Shares to be purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall
deliver to Grantee 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, charges or encumbrances ("Liens"), and Grantee
shall deliver to Issuer a letter agreeing that Grantee shall not offer to
sell or otherwise dispose of such Option Shares in violation of applicable
law or the provisions of this Agreement.
(c) 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
NOVEMBER 3, 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 (i) the reference to restrictions arising
under the Securities Act 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 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 and (ii) the reference to restrictions
pursuant to this Agreement in the above legend shall be removed by delivery
of substitute certificate(s) without such reference if the Option Shares
evidenced by certificate(s) containing such reference have been sold or
transferred in compliance with the provisions of this Agreement under
circumstances that do not require the retention of such reference.
4. Authorized Stock. Issuer hereby represents and warrants to Grantee
that Issuer has taken all necessary corporate and other action to authorize
and reserve and to permit it to issue, at all times from the date hereof
until the obligation to deliver Shares upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the Option,
Shares necessary for Grantee to exercise the Option, and Issuer will take
all necessary corporate action to authorize and reserve for issuance all
additional Shares or other securities which may be issued pursuant to
Section 6 upon exercise of the Option. The Shares to be issued upon due
exercise of the Option, including all additional Shares or other securities
which may be issuable upon exercise of the Option pursuant to Section 6,
upon issuance pursuant hereto, shall be duly and validly issued, fully paid
and nonassessable, and shall be delivered free and clear of all Liens,
including any preemptive rights of any stockholder of Issuer.
5. Purchase Not for Distribution. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option will not be taken with a view to the
public distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration
under the Securities
Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the event
of any change in Shares by reason of reclassification, recapitalization,
stock split, split-up, combination, exchange of shares, stock dividend,
dividend, dividend payable in any other securities, or any similar event,
the type and number of Shares or securities subject to the Option, and the
Purchase Price therefor (including for purposes of repurchase thereof
pursuant to Section 7), shall be adjusted appropriately, and proper
provisions shall be made in the agreements governing such transaction, so
that Grantee shall receive upon exercise of the Option the number and class
of shares or other securities or property that Grantee would have received
in respect of Shares if the Option had been exercised immediately prior to
such event or the record date therefor, as applicable. If any additional
Shares are issued after the date of this Agreement (other than pursuant to
an event described in the immediately preceding sentence), the number of
Shares subject to the Option shall be adjusted so that immediately prior to
such issuance, it equals 14.9% of the number of Shares then issued and
outstanding. In no event shall the number of Shares subject to the Option
exceed 14.9% of the number of Shares issued and outstanding at the time of
exercise (without giving effect to any shares subject or issued pursuant to
the Option).
(b) Without limiting the foregoing, whenever the number of
Option Shares purchasable upon exercise of the Option is adjusted as
provided in this Section 6, the Purchase Price per Option Share shall be
adjusted by multiplying the Purchase Price by a fraction, the numerator of
which is equal to the number of Option Shares purchasable prior to the
adjustment and the denominator of which is equal to the number of Option
Shares purchasable after the adjustment.
(c) Without limiting the parties' relative rights and
obligations under the Merger Agreement, in the event that Issuer enters
into an agreement (i) to consolidate with or merge into any person, other
than Grantee or one of its Subsidiaries, and Issuer will not be the
continuing or surviving corporation in such consolidation or merger, (ii)
to permit any Person, other than Grantee or one of its Subsidiaries, to
merge into Issuer and Issuer will be the continuing or surviving corporation,
but in connection with such merger, the shares of Common Stock outstanding
immediately prior to the consummation of such merger will be changed into
or exchanged for stock or other securities of Issuer or any other Person or
cash or any other property, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any Person, other than Grantee or one of
its Subsidiaries, then, and in each such case, the agreement governing such
transaction will make proper provision so that the Option will, upon the
consummation of any such transaction and upon the terms and conditions set
forth herein, be converted into, or exchanged for, an option with identical
terms appropriately adjusted to acquire the number and class of shares or
other securities or property that Grantee would have received in respect of
Option Shares had the Option been exercised immediately prior to such
consolidation, merger, sale or transfer or the record date therefor, as
applicable. Issuer shall take such steps in connection with such
consolidation, merger, liquidation or other such transaction as may be
reasonably necessary to assure that the provisions hereof shall thereafter
apply as nearly as possible to any securities or property thereafter
deliverable upon exercise of the Option.
7. Repurchase of Option. (a) Notwithstanding the provisions of
Section 2(a), at any time commencing upon the first occurrence of a
Purchase Event and ending upon termination of this Option in accordance
with Section 2, Issuer (or any successor entity thereof) shall at the
request of Grantee (any such request, a "Cash Exercise Notice"), repurchase
from Grantee the Option or a portion thereof (if and to the extent not
previously exercised or terminated) at a price which, subject to Section 10
below, is equal to the excess, if any, of (x) the Applicable Price (as
defined below) as of the Section 7 Request Date (as defined below) for a
Share over (y) the Purchase Price (subject to adjustment pursuant to
Section 6), multiplied by all or such portion of the Option Shares subject
to the Option as the Grantee shall specify in the Cash Exercise Notice (the
"Option Repurchase Price").
(b) Notwithstanding the provisions of Section 2(a), at any time
following the occurrence of a Purchase Event, Issuer (or any successor
entity thereof) may, at its election, repurchase the Option (if and to the
extent not previously exercised or terminated) at the Option Repurchase
Price; provided that the aggregate number of Option Shares as to which the
Option may be repurchased shall not exceed 85,294,118. For purposes of this
Agreement, an exercise of the Option shall be deemed to occur on the
Closing Date and not on the Notice Date relating thereto.
(c) In connection with any exercise of rights under this
Section 7, Issuer shall, within 5 business days after the Section 7 Request
Date, pay the Option Repurchase Price in immediately available funds, and
Grantee or such owner, as the case may be, shall surrender to Issuer the
Option. Upon receipt by the Grantee of the Option Repurchase price, the
obligations of the Issuer to deliver Option Shares pursuant to Section 3 of
this Agreement shall be terminated with respect to the number of Option
Shares specified in the Cash Exercise Notice or the number of Option Shares
as to which the Option is repurchased under Section 7(b).
(d) For purposes of this Agreement, the following terms have
the following meanings:
(i) "Applicable Price", as of any date, means the highest of
(A) the highest price per Share paid or proposed to be paid by any
third party for Shares or the consideration per Share received or to
be received by holders of Shares, in each case pursuant to any
Acquisition Proposal for or with Issuer made on or prior to such date
or (B) the average closing price per Share as reported on the New
York Stock Exchange, Inc. ("NYSE") Composite Tape or if the Shares
are not listed on the NYSE, the highest bid price per Share as quoted
on the National Association of Securities Dealers Automated Quotation
System or, if the Shares are not quoted thereon, on the principal
trading market on which such Shares are traded as reported by a
recognized source during the 10 trading days preceding such date. If
the consideration to be offered, paid or received pursuant to the
foregoing clause (A) 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 Grantee and
reasonably acceptable to Issuer.
(ii) "Section 7 Request Date" means the date on which Issuer or
Grantee, as the case may be, exercises its rights under this Section.
8. Registration Rights. Issuer shall, if requested by Grantee or any
Subsidiary of the Grantee which is the owner of Option Shares (collectively
with Grantee, the "Owners") at any time and from time to time within two
years of the first exercise of the Option, as expeditiously as possible
prepare and file up to two registration statements under the Securities Act
if such registration is necessary in order to permit the sale or other
disposition of any or all shares of securities that have been acquired by
or are issuable to such Owners upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by such
Owners, including a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use all
reasonable efforts to qualify such shares or other securities under any
applicable state securities laws. Issuer shall use all reasonable efforts
to cause each such registration statement to become effective, to obtain
all consents or waivers of other parties which are required therefor and to
keep such registration statement effective for such period at least 90 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. The
obligations of Issuer hereunder to file a registration statement and to
maintain its effectiveness may be suspended for a period of time not
exceeding 90 days in the aggregate if the Board of Directors of Issuer
shall have determined in good faith that the filing of such registration
statement or the maintenance of its effectiveness would require disclosure
of nonpublic information that would materially and adversely affect Issuer
(but in no event shall Issuer exercise such postponement right more than
once in any 12-month period). Any registration statement prepared and filed
under this Section 8, and any sale covered thereby, shall be at Issuer's
expense except for underwriting discounts or commissions, brokers' fees and
the reasonable fees and disbursements of Owners' counsel related thereto.
The Owners shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. If during
the time period referred to in the first sentence of this Section 8 Issuer
effects a registration under the Securities Act of Shares for its own
account or for any other stockholders of Issuer (other than on Form S-4 or
Form S-8, or any successor form), it shall allow the Owners the right to
participate in such registration, and such participation shall not affect
the obligation of Issuer to effect two registration statements for the
Owners under this Section 8; provided that, if the managing underwriters of
such offering advise Issuer in writing that in their opinion the number of
Shares requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the offering
price, Issuer and the Owners shall each reduce on a pro rata basis the
Shares to be included therein on their respective behalf. In connection
with any registration pursuant to this Section 8, Issuer and the Owners
shall provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification and contribution in
connection with such registration.
9. Additional Covenants of Issuer. (a) If Shares or any other
securities to be acquired upon exercise of the Option are then listed on
the NYSE or any other securities exchange or market, Issuer, upon the
request of any Owner, will promptly file an application to list the Shares
or other securities to be acquired upon exercise of the Options on the NYSE
or such other securities exchange or market and will use its reasonable
best efforts to obtain approval of such listing as soon as practicable.
(b) Issuer will use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to permit the
exercise of the Option in accordance with the terms and conditions hereof,
as soon as practicable after the date hereof, including making any
appropriate filing pursuant to the HSR Act and any other applicable law,
supplying as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any
other applicable law, and taking all other actions necessary to cause the
expiration or termination of the applicable waiting periods under the HSR
Act as soon as practicable.
(c) Issuer agrees not to avoid or seek to avoid (whether by
charter amendment or through reorganization, consolidation, merger,
issuance of rights, dissolution or sale of assets, or by any other
voluntary act) the observance or performance of any of the covenants,
agreements or conditions to be observed or performed hereunder by it.
(d) Issuer shall take all such steps as may be required to
cause any acquisitions or dispositions by Grantee (or any affiliate who may
become subject to the reporting requirements of Section 16(a) of the
Exchange Act) of any Shares acquired in connection with this Agreement
(through conversion or exercise of the Option or otherwise) to be exempt
under Rule 16b-3 promulgated under the Exchange Act.
10. Limitation of Grantee Profit. (a) Notwithstanding any other
provision in this Agreement, in no event shall Grantee's Total Profit (as
defined below) exceed $2 billion (the "Maximum Profit") and, if it
otherwise would exceed such amount, Grantee, at its sole discretion, shall
either (i) reduce the number of Shares subject to the Option, (ii) deliver
to Issuer for cancellation Shares (or other securities into which such
Option Shares are converted or exchanged) previously purchased by Grantee,
(iii) pay cash to Issuer, or (iv) any combination of the foregoing, so that
Grantee's actually realized Total Profit shall not exceed the Maximum
Profit after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of Option Shares as would, as of
any Notice Date, result in a Notional Total Profit (as defined below) of
more than the Maximum Amount and, if exercise of the Option otherwise would
result in the Notional Total Profit exceeding such amount, Grantee, at its
discretion, may (in addition to any of the actions specified in Section
10(a) above) (i) reduce the number of Shares subject to the Option or (ii)
increase the Purchase Price for that number of Option Shares set forth in
the Exercise Notice so that the Notional Total Profit shall not exceed the
Maximum Profit; 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 1 hereof.
(c) For purposes of this Agreement, "Total Profit" shall mean:
(i) the aggregate amount (before taxes) of (A) any excess of (x) the net
cash amounts or fair market value of any property received by Grantee
pursuant to a sale of Option Shares (or securities into which such shares
are converted or exchanged) over (y) the Grantee's aggregate purchase price
for such Option Shares (or other securities), plus (B) any amounts received
by Grantee on the repurchase of the Option by Issuer pursuant to Section 7,
plus (C) any termination fee paid by Issuer and received by Grantee
pursuant to Section 7.2(c) of the Merger Agreement, minus (ii) the amounts
of any cash previously paid by Grantee to Issuer pursuant to this Section
10 plus the value of the Option Shares (or other securities) previously
delivered by Grantee to Issuer for cancellation pursuant to this Section
10.
(d) For purposes of this Agreement, "Notional Total Profit"
with respect to any number of Option Shares as to which Grantee may propose
to exercise the Option shall mean the Total Profit determined as of the
Notice Date assuming that the Stock Option was exercised on such date for
such number of Option Shares and assuming that such Option Shares, together
with all other Option Shares previously acquired upon exercise of the
Option and held by Grantee as of such date, were sold for cash at the
closing price per Share on the NYSE as of the close of business on the
preceding trading day (less customary brokerage commissions).
(e) Notwithstanding any other provision of this Agreement,
nothing in this Agreement shall affect the ability of Grantee to receive,
nor relieve Issuer's obligation to pay, any termination fee provided for in
Section 7.2(c) of the Merger Agreement; provided that if and to the extent
the Total Profit received by Grantee would exceed the Maximum Profit
following receipt of such payment, Grantee shall be obligated to promptly
comply with the terms of Section 10(a).
(f) For purposes of Section 10(a) and clause (ii) of Section
10(c), the value of any Option Shares delivered by Grantee to Issuer shall
be the Applicable Price of such Option Shares.
11. Loss, Theft, Etc. of Agreement. This Agreement (and the Option
granted hereby) is 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 in the aggregate the
same number of Shares 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.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9 hereof
or in the Merger Agreement, each of the parties hereto shall bear and pay
all 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 Beneficiary; Severability.
Except as otherwise set forth in the Merger Agreement, this Agreement,
together with the Merger Agreement and the Xxxxxx-Xxxxxxx Stock Option
Agreement (a) 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 (b) is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a federal or
state regulatory agency 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 regulatory agency
determines that the Option does not permit Grantee to acquire, or does not
require Issuer to repurchase, the full number of Shares as provided in
Sections 2 and 7, as adjusted pursuant to Section 6, it is the express
intention of Issuer to allow Grantee 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 DELAWARE (WITHOUT
GIVING EFFECT TO CHOICE OF LAW PRINCIPLES).
(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 as set forth in Section 8.2
of the Merger Agreement.
(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 by each of the parties and delivered to the other party, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may not, without the prior written
consent of Issuer (which shall not be unreasonably withheld), assign this
Agreement or the Option to any other person. This Agreement shall not be
assignable by Issuer except by operation of law. 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) Representations and Warranties. The representations and
warranties contained in Sections 3.1(a)(i) and 3.2(a)(i) of the Merger
Agreement, and, to the extent they relate to this Stock Option Agreement,
in Sections 3.2(b), (c), (f), (g) and (q) and Section 3.1(c) of the Merger
Agreement, are incorporated herein by reference.
(j) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and 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.
(k) Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are
entitled at law or in equity. 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.
(l) Captions. The Article, Section and paragraph captions
herein are for convenience only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.
(m) Confidentiality Agreement. Issuer hereby waives the
restrictions on Grantee's acquisition of Shares contained in the
Confidentiality Agreement to the extent necessary to permit Grantee to
exercise the Option and purchase the Option Shares as herein provided.
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 November 3, 1999.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, President and Chief
Executive Officer
XXXXXX-XXXXXXX COMPANY
By: /s/ Xxxxxxxx X.X. xx Xxxx
-----------------------------------
Name: Xxxxxxxx X.X. xx Xxxx
Title: Chairman, President and Chief
Executive Officer
