1
EXHIBIT 99(A)
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of January 10, 2001 (the
"Agreement"), by and between Xxxxx Companies, Inc., a Delaware corporation
("Issuer"), and United Parcel Service, Inc., a Delaware corporation ("Grantee").
WITNESSETH THAT:
WHEREAS, Issuer and Grantee have entered into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented,
the "Merger Agreement"; defined terms used but not defined herein have the
meanings set forth in the Merger Agreement), providing for, among other things,
the merger of a subsidiary of Grantee with and into Issuer, with Issuer being
the surviving corporation in the Merger as a direct and wholly owned subsidiary
of Grantee; and
WHEREAS, as a condition and inducement to Grantee's willingness to
enter into the Merger Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Issuer
and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 3,707,609 (as adjusted as set forth herein) shares (the "Option
Shares") of Common Stock, par value $.01 per share ("Issuer Common Stock"), of
Issuer at a purchase price per Option Share (the "Purchase Price") equal to the
lower of (1) 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 Grantee 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 Date (as defined below) and (2) the average
closing price per share of Issuer Common Stock (as determined under Section
6(c)) for the 10 trading day period ending on the date that is two trading days
prior to the first date on which an Acquisition Proposal shall have been
publicly made or shall have otherwise become publicly known or any person shall
have publicly announced an intention to make an Acquisition Proposal (as
adjusted as set forth herein).
2. Exercise of Option. (a) Grantee may exercise the Option, in
whole but not in part, at any time, subject to the provisions of Section 2(c),
after the occurrence of any event as a result of which Grantee is entitled to
receive the Termination Fee pursuant to Section 8.2(b) or (c) of the Merger
Agreement (a "Purchase Event"); provided, however, that (i) except as provided
in the last sentence of this Section 2(a), the Option will terminate and be of
no further force and effect upon the earliest to occur of (A) the Effective
Time, (B) nine months after the first occurrence of a Purchase Event and (C)
termination of the Merger Agreement in
1
2
accordance with its terms prior to the occurrence of a Purchase Event, unless,
in the case of clause (C), Grantee may receive a Termination Fee in connection
with or following such termination upon the occurrence of certain events, in
which case the Option will not terminate until the later of (x) nine months
following the time such Termination Fee becomes payable and (y) the expiration
of the period in which Grantee has such right to receive a Termination Fee, and
(ii) any purchase of Option Shares upon exercise of the Option will be subject
to compliance with the HSR Act and the obtaining or making of any other
consents, approvals, orders, notifications, filings or authorizations, the
failure of which to have obtained or made would have the effect of making the
issuance of Option Shares to Grantee illegal (the "Regulatory Approvals").
Notwithstanding the termination of the Option, Grantee will be entitled to
purchase the Option Shares if it has exercised the Option in accordance with the
terms hereof prior to the termination of the Option and such termination of the
Option will not affect any rights hereunder which by their terms do not
terminate or expire prior to or as of such date. Issuer agrees to use its
commercially reasonable efforts to obtain all necessary Regulatory Approvals in
order to permit the purchase of the Option Shares.
(b) If Grantee is entitled to and wishes to exercise the
Option, it will send to Issuer a written notice (an "Exercise Notice"; the date
of which being herein referred to as the "Notice Date") to that effect which
Exercise Notice also specifies the number of Option Shares, if any, Grantee
wishes to purchase pursuant to this Section 2(b), the number of Option Shares,
if any, with respect to which Grantee wishes to exercise its Cash-Out Right (as
defined herein) pursuant to Section 6(c), the denominations of the certificate
or certificates evidencing the Option Shares which Grantee wishes to purchase
pursuant to this Section 2(b) and a date (the "Option Closing Date"), subject to
the following sentence, not earlier than seven trading days nor later than 20
trading days from the Notice Date for the closing of such purchase (the "Option
Closing"). The Option Closing will be at such location and time in Atlanta,
Georgia as the Grantee shall specify on the Option Closing Date or at such later
date as may be necessary as provided in Section 2(c).
(c) Notwithstanding anything to the contrary contained
herein, any exercise of the Option and purchase of Option Shares shall be
subject to compliance with applicable laws and regulations, which may prohibit
the purchase of all the Option Shares specified in the Exercise Notice without
first obtaining or making certain Regulatory Approvals. In such event, if the
Option is otherwise exercisable and Grantee wishes to exercise the Option, the
Option may be exercised in accordance with Section 2(b) and Grantee shall
acquire the maximum number of Option Shares specified in the Exercise Notice
that Grantee is then permitted to acquire under the applicable laws and
regulations, and if Grantee thereafter obtains the Regulatory Approvals to
acquire the remaining balance of the Option Shares specified in the Exercise
Notice, then Grantee shall be entitled to acquire such remaining balance.
If (i) Grantee receives official notice that a Regulatory
Approval required for the purchase of any Option Shares will not be issued or
granted or (ii) such Regulatory Approval has not been issued or granted within
six months of the date of the Exercise Notice, Grantee shall have the right to
exercise its Cash-Out Right pursuant to Section 6(c) with respect to the Option
2
3
Shares for which such Regulatory Approval will not be issued or granted or has
not been issued or granted.
3. Payment and Delivery of Certificates. (a) At the
Option Closing, Grantee will pay to Issuer in immediately available funds by
wire transfer to a bank account designated in writing by Issuer an amount equal
to the Purchase Price multiplied by the number of Option Shares to be purchased
at the Option Closing plus the amount of any transfer, stamp or other similar
taxes or charges imposed in connection therewith.
(b) At the Option Closing, simultaneously with the
delivery of immediately available funds as provided in Section 3(a), Issuer will
deliver to Grantee a certificate or certificates representing the Option Shares
to be purchased at the Option Closing, which Option Shares will be free and
clear of all liens, claims, charges and encumbrances of any kind whatsoever,
except for any encumbrances arising hereunder.
(c) Certificates for the Option Shares delivered at the
Option Closing will have typed or printed thereon a restrictive legend which
will read substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION
AGREEMENT DATED AS OF JANUARY ____, 2001, A COPY OF WHICH MAY BE
OBTAINED FROM THE SECRETARY OF XXXXX COMPANIES, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES."
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend will be removed by delivery of substitute
certificate(s) without such reference if such Option Shares have been registered
pursuant to the Securities Act, such Option Shares have been sold in reliance on
and in accordance with Rule 144 under the Securities Act or Grantee has
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 will 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. Representations and Warranties of Issuer. Issuer
hereby represents and warrants to Grantee as follows:
(a) Authorized Stock. Issuer has taken all necessary
corporate and other action to authorize and reserve and, subject to the
expiration or termination of any
3
4
required waiting period under the HSR Act, to permit it to issue, and,
at all times from the date hereof until the obligation to deliver
Option Shares upon the exercise of the Option terminates, shall have
reserved for issuance, upon exercise of the Option, shares of Issuer
Common Stock necessary for Grantee to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 6 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer
Common Stock or other securities which may be issuable upon exercise of
the Option or any other securities which may be issued pursuant to
Section 6, upon issuance pursuant hereto, will be duly and validly
issued, fully paid and nonassessable, and will be delivered free and
clear of all liens, claims, charges and encumbrances of any kind or
nature whatsoever, (except for any encumbrances arising hereunder),
including without limitation any preemptive rights of any stockholder
of Issuer.
5. Representations and Warranties of Grantee. 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
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 Issuer Common Stock by reason of a stock dividend,
split-up, merger, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of shares or securities subject to the Option,
and the Purchase Price thereof, will be adjusted appropriately, and proper
provision will be made in the agreements governing such transaction, so that
Grantee will 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
Issuer Common Stock if the Option had been exercised immediately prior to such
event or the record date therefor, as applicable. Without limiting the parties'
relative rights and obligations under the Merger Agreement, if the number of
outstanding shares of Issuer Common Stock increases or decreases after the date
of this Agreement (other than pursuant to an event described in the first
sentence of this Section 6(a)), the number of shares of Issuer Common Stock
subject to the Option will be adjusted so that it equals 10.1% of the number of
shares of Issuer Common Stock then issued and outstanding, without giving effect
to any shares subject to or issued pursuant to the Option.
(b) Without limiting the parties' relative rights and
obligations under the Merger Agreement, if 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
Issuer Common Stock outstanding immediately prior to the
4
5
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 the
shares of Issuer Common Stock outstanding immediately prior to the consummation
of such merger will, after such merger, represent less than 90% of the
outstanding voting securities of the merged company, 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 Issuer Common Stock if the Option had been exercised immediately
prior to such consolidation, merger, sale, or transfer, or the record date
therefor, as applicable and make any other necessary adjustments to preserve the
full value of the Option.
(c) If, at any time during the period commencing on a
Purchase Event and ending on the termination of the Option in accordance with
Section 2, Grantee sends to Issuer an Exercise Notice indicating Grantee's
election to exercise its right (the "Cash-Out Right") pursuant to this Section
6(c), then Issuer shall pay to Grantee, on the Option Closing Date, in exchange
for the cancellation of the Option with respect to such number of Option Shares
as Grantee specifies in the Exercise Notice, an amount in cash equal to such
number of Option Shares multiplied by the difference between (i) the average
closing price, for the 10 trading days commencing on the 12th trading day
immediately preceding the Option Closing Date, per share of Issuer Common Stock
as reported on The New York Stock Exchange, Inc. (or, if not listed on The New
York Stock Exchange, as reported on any other national securities exchange or
national securities quotation system on which the Issuer Common Stock is listed
or quoted, as reported in The Wall Street Journal (Northeast edition), or, if
not reported thereby, any other authoritative source) (the "Closing Price") and
(ii) the Purchase Price. Notwithstanding the termination of the Option, Grantee
will be entitled to exercise its rights under this Section 6(c) if it has
exercised such rights in accordance with the terms hereof prior to the
termination of the Option.
7. Registration Rights. (a) Issuer will, if requested by
Grantee in writing at any time and from time to time within two years of the
exercise of the Option, promptly prepare and file one registration statement
under the Securities Act if such registration is necessary in order to permit
the sale or other disposition of any or all shares or securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by Grantee,
including a "shelf" registration statement under Rule 415 under the Securities
Act or any successor provision, and Issuer will use its reasonable best efforts
to qualify such shares or other securities under any applicable state securities
laws. Issuer will use commercially 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 not in excess of 120 calendar 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 up to 90 calendar days in the aggregate if the Board of
Directors of Issuer shall have determined that the filing of such registration
statement or the maintenance of its effectiveness would require premature
disclosure of material nonpublic information that would materially and adversely
5
6
affect Issuer or otherwise interfere with or adversely affect any pending or
proposed offering of securities of Issuer or any other material transaction
involving Issuer. Any registration statement prepared and filed under this
Section 7, and any sale covered thereby, will be at Issuer's expense except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto. Grantee will provide all
information reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder. If, during the time periods referred to in the
first sentence of this Section 7, Issuer effects a registration under the
Securities Act of Issuer Common Stock 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 will allow Grantee the right to participate in such registration, and
such participation will not affect the obligation of Issuer to effect demand
registration statements for Grantee under this Section 7; provided that, if the
managing underwriters of such offering advise Issuer in writing that in their
opinion the number of shares of Issuer Common Stock requested to be included in
such registration exceeds the number which can be sold in such offering, Issuer
will first reduce the shares requested to be included therein by Grantee before
reducing any other shares intended to be included therein by Issuer. In
connection with any registration pursuant to this Section 7, Issuer and Grantee
will provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification, and contribution in
connection with such registration.
If a requested registration pursuant to this Section 7(a)
involves an underwritten offering, the underwriter or underwriters thereof shall
be a nationally recognized firm or firms selected by Grantee, and reasonably
acceptable to Issuer.
(b) Notwithstanding Section 7(a), if Issuer receives a
written request (the "Registration Notice") from Grantee requesting that Issuer
register any or all shares or securities that have been acquired by Grantee upon
exercise of the Option (the "Registrable Securities"), Issuer will thereupon
have the option exercisable by written notice delivered to Grantee within ten
trading days after receipt of the Registration Notice, to purchase all or any
part of the Registrable Securities for cash at a price (the "Section 7b Price")
equal to the product of (i) the number of Registrable Securities so purchased
and (ii) the per share average of the closing sale prices of Issuer Common Stock
on The New York Stock Exchange (or any other national securities exchange or
national securities quotation system on which the shares of Issuer Common Stock
are then listed or quoted) for the twenty trading days immediately preceding the
date of the Registration Notice. Any such purchase of Registrable Securities by
Issuer hereunder will take place at a closing to be held at the principal
executive offices of Issuer or its counsel at any reasonable date and time
designated by Issuer in such notice within ten trading days after delivery of
such notice. At the time of such closing, Issuer shall deliver to Grantee an
amount equal to the Section 7b Price in immediately available funds as
consideration for the purchase of the applicable Registrable Securities.
8. Quotation. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then quoted on The New
York Stock Exchange (or any other national securities exchange or national
securities quotation system), Issuer, upon the request of Grantee, will promptly
file an application to have the shares of Issuer Common Stock or other
6
7
securities to be acquired upon exercise of the Option quoted on The New York
Stock Exchange (and any such other national securities exchange or national
securities quotation system) and will use reasonable efforts to obtain approval
of such quotation as promptly as practicable.
9. Loss or Mutilation. 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 cancelation 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 will
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.
10. Miscellaneous. (a) Expenses. Except as provided in
Section 7, each of the parties hereto will 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 counsel, accountants,
investment bankers, experts and consultants incurred in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby.
(b) Amendment. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
(c) Extension; Waiver; Consent. The parties hereto may,
to the extent legally allowed, (i) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (ii) waive any
inaccuracies in the representations contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with or give a consent
under any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension, waiver or consent shall be valid
only if set forth in a written instrument signed on behalf of such party in its
sole discretion. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
(d) Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Merger Agreement (including the documents and instruments
attached thereto as exhibits or schedules or delivered in connection therewith)
and the Confidentiality Agreement (i) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof, and (ii) are not
intended to and shall not confer upon any Person other than the parties hereto
any rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement.
(e) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflict
of laws thereof.
7
8
(f) Notices. All notices and other communications
hereunder shall be sent in the manner and to the addresses set forth in the
Merger Agreement.
(g) Assignment. Neither this Agreement, the Option nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto, in whole or in part (whether by operation of law or
otherwise), without the prior written consent of the other party and any attempt
to make any such assignment without such consent shall be null and void. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(h) Further Assurances. In the event of any exercise of
the Option by Grantee, Issuer and Grantee will execute and deliver all other
documents and instruments and take all other actions that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
(i) Enforcement. The parties agree that irreparable
damage would occur and that the parties would not have any adequate remedy at
law 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 will 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.
(j) Submission to Jurisdiction; Waivers. Each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
Delaware state court or any Federal court located in the State of Delaware in
the event any dispute arises out of or under or relates to this Agreement or any
of the transactions contemplated hereby, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees that it will not bring any action, suit or
proceeding arising out of or under or relating to this Agreement or any of the
transactions contemplated hereby, in any court other than any Delaware state
court or any Federal court located in the State of Delaware and (d) waives any
right to trial by jury with respect to any action, suit or proceeding arising
out of or under or relating to this Agreement or any of the transactions
contemplated hereby. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of or under or relating to this Agreement or any of
the transactions contemplated hereby in any Delaware state court or any Federal
court located in the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(k) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of
8
9
the parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the fullest extent.
(l) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more 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.
(m) Limitation on Profit. (i) Notwithstanding any other
provision hereof, in no event shall the Grantee's Total Profit (as defined
herein) exceed in the aggregate $22.5 million (the "Maximum Amount") and, if it
otherwise would exceed such amount, the Grantee, at its sole election, shall
either: (A) reduce the number of shares of Issuer Common Stock subject to this
Option; (B) deliver to the Issuer for cancellation Option Shares (or other
securities into which such Option Shares are converted or exchanged) previously
purchased by Grantee; (C) pay cash to the Issuer; or (D) any combination
thereof, so that Grantee's actually realized Total Profit shall not exceed the
Maximum Amount taking into account the foregoing actions.
(ii) Notwithstanding any other provision hereof, this
Option may not be exercised for a number of shares as would, as of the
date of exercise, result in a Notional Total Profit (as defined below)
which would exceed 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(m)(i) above) (A) reduce the number of
Shares subject to the Option or (B) increase the Purchase Price for
that number of Option Shares for which the Option is being exercised so
that the Notional Total Profit shall not exceed the Maximum Amount;
provided, that nothing in this sentence shall restrict any exercise of
the Option permitted hereby on any subsequent date.
(iii) As used herein, the term "Total Profit" shall mean
(A) the aggregate amount (before taxes) of the following: (w) any
amounts received by Grantee pursuant to exercise of its Cash-Out Right,
plus (x) any Section 7b Price received by Grantee pursuant to Section
7(b) hereof with respect to Registrable Securities, less the Grantee's
Purchase Price for such Registrable Securities, plus (y) the net cash
amounts or fair market value of any property received by Grantee
pursuant to the sale of Option Shares (or any other securities into
which such Option Shares are converted or exchanged) to any
unaffiliated party, less the Grantee's Purchase Price for such Option
Shares, plus (z) any Termination Fee paid by Issuer and received by
Grantee pursuant to Section 8.2(b) or (c) of the Merger Agreement,
minus (B) the amount of any cash previously paid by Grantee to Issuer
pursuant to this Section 10 plus the value of the Option Shares (or
other securities into which such Option Shares are converted or
exchanged) previously delivered by Grantee to Issuer for cancellation
pursuant to this Section 10(m).
9
10
(iv) As used herein, the term "Notional Total Profit" with
respect to any number of shares as to which Grantee may propose to
exercise this Option shall be the Total Profit determined as of the
date of such proposal assuming that this Option were exercised on such
date for such number of shares and assuming that such shares, together
with all other Option Shares held by Grantee and its affiliates as of
such date, were sold for cash at the closing market price (less
customary brokerage commissions) for shares of Issuer Common Stock as
of the close of business of the preceding trading day on The New York
Stock Exchange (or any other national securities exchange or national
securities quotation system on which the shares of Issuer Common Stock
are then listed or quoted). (v) 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 8.2(b) or (c) of the Merger
Agreement; provided that if and to the extent the Total Profit received
by Grantee would exceed the Maximum Amount following receipt of such
payment, Grantee shall be obligated to promptly comply with the terms
of this Section 10(m).
(vi) For purposes of Section 10(m)(i) and clause (A) of
Section 10(m)(iii), the value of any Option Shares (or other securities
into which such Option Shares are converted or exchanged) delivered by
Grantee to Issuer shall be the Closing Price of such Option Shares.
10
11
IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first written above.
XXXXX COMPANIES, INC.
By: /s/ Xxxx Xxxxx
------------------------------------------
Name: Xxxx Xxxxx
Title: President
UNITED PARCEL SERVICE, INC.
By:/S/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
11
