AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated July 2, 2002 ("Amendment") to Agreement and Plan of
Merger dated as of February 28, 2002 (the "Agreement") by and among Investment
Technology Group, Inc., a Delaware corporation ("Parent"), Xxxxxx Group Inc., a
Delaware corporation ("Company"), and Indigo Acquisition Corp. ("Merger
Subsidiary"), a Delaware corporation and a direct wholly owned subsidiary of
Parent. Capitalized terms used herein without definition have the meanings given
to them in the Agreement.
WHEREAS, on May 9, 2002, Company announced certain unauthorized trading and
resulting trading losses at its wholly owned subsidiary Xxxxxx & Company
Limited, a U.K. limited company;
WHEREAS, in light of such losses, Parent, Merger Subsidiary and Company
have agreed to amend the Agreement in order to adjust the Merger Consideration
and make certain other changes;
WHEREAS, the boards of directors of Parent, Merger Subsidiary and Company
have approved this Amendment;
WHEREAS, each person listed on Annex A hereto is, concurrently with the
execution and delivery of this Amendment, delivering a letter in the form of
Annex B hereto;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE ONE
AMENDMENTS
SECTION 1.1. The first paragraph of the Agreement is amended to replace
"(this "Agreement") with "(as amended by Amendment No. 1, this "Agreement")".
SECTION 1.2. Section 1.1 of the Agreement is amended as follows:
(a) The following definitions are added:
"Amendment No. 1" means Amendment No. 1 dated July 2, 2002 to this
Agreement.
"Cash Merger Consideration" means (i) $11.35 plus (ii) (A) the Escrow
Reduction Amount, if any, divided by (B) the Number of Shares and Options
Outstanding.
"Cash Option Consideration" has the meaning given in Section 2.8(a).
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"Contingent Payment" means the amount, if any, required to be paid in
cash by ITG to the Agent pursuant to Section 7.03 of the Escrow Agreement
for payment to Holders pursuant to the terms of the Paying Agent Agreement.
"Contingent Payment Right" means the right to receive an amount equal
to (i) the Contingent Payment divided by (ii) (x) the Number of Shares and
Options Outstanding less (y) the number of Specified Rollover Options,
which right shall not be assignable or otherwise transferable except by
operation of law (including the laws of descent and distribution) or by
intestacy and shall otherwise be subject to the terms of the Escrow
Agreement.
"Escrow Agreement" means the Escrow Agreement dated as of the date of
Amendment No. 1 among Company, Xxxxxx UK, Parent and the Committee Members
named therein, in the form of Annex C to the Amendment.
"Escrow Reduction Amount" has the meaning given to such term in the
Escrow Agreement.
"FSA Notices" means (i) the Notification of a Regulatory Event filed
by Xxxxxx UK with the Financial Services Authority in the United Kingdom
dated May 21, 2002, and (ii) the Notification of a Regulatory Event filed
by Xxxxxx UK, with the Financial Services Authority in the United Kingdom,
dated June 11, 2002.
"Xxxxxx UK" means Xxxxxx & Company Limited, a U.K. limited company and
a wholly owned subsidiary of Company.
"Specified Losses" means the trading losses totaling $7.1 million on a
pre-tax basis incurred by Xxxxxx UK, described in the FSA Notices, plus (i)
all fees and expenses incurred on or before the date of Amendment No. 1 in
connection with the matters referred to in the FSA Notices, (ii) all Escrow
Expenses (as defined in the Escrow Agreement), (iii) all penalties and
fines levied by any Governmental Entity in connection with the matters
referred to in the FSA Notices and (iv) all fees and expenses incurred
after the date of Amendment No. 1 in connection with any inquiry,
investigation or proceeding by any Governmental Entity relating to the
matters referred to in the FSA Notices.
"Specified Rollover Options" means the Rollover Options identified as
such on the schedule to be delivered by Parent pursuant to Section 2.8(b).
(b) The following definitions are deleted in their entirety: "Net Cash
Proceeds" and "Option Consideration".
(c) The definition of "Cash-out Option Schedule" is amended to replace
"within 30 days after the date hereof" with "within 14 days after the date of
Amendment No. 1".
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(d) The definition of "Exchange Ratio" is amended to replace "Merger
Consideration" with "Cash Merger Consideration".
(e) The definition of "Transaction Agreements" is amended to add the
following before the period: ", the Escrow Agreement and the Paying Agent
Agreement (as defined in the Escrow Agreement)".
SECTION 1.3. Section 2.6(b) of the Agreement is amended and restated as
follows:
"Conversion of Company Common Stock. Subject to Section 2.6(d), each
share of Company Common Stock issued and outstanding immediately prior to
the Effective Time (including (i) all vested and unvested Company RSUs and
(ii) any shares of Company Common Stock held by participants in the Company
Stock Purchase Plans and issued prior to the date hereof, but excluding (x)
shares to be canceled in accordance with Section 2.6(a) and (y) Dissenting
Shares) shall be converted at the Effective Time into (i) the right to
receive, without interest, the Cash Merger Consideration and (ii) one
Contingent Payment Right (together, the "Merger Consideration"). Upon such
conversion, all such shares of Company Common Stock shall no longer be
deemed to be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each certificate previously representing any
such shares shall thereafter represent only the right to receive the Merger
Consideration upon the surrender of the certificate representing such
shares of Company Common Stock in accordance with Section 2.7."
SECTION 1.4. All instances of "Merger Consideration" in Section 2.7 of the
Agreement are changed to "Cash Merger Consideration". The last sentence of
Section 2.7(c) is amended to replace the words "amount of cash" with "Cash
Merger Consideration".
SECTION 1.5. The first sentence of Section 2.7(d) shall be amended to add
", except with respect to the Contingent Payment Rights" before the period.
SECTION 1.6. Section 2.8(a) of the Agreement is amended and restated as
follows:
"At the Effective Time, all Cash-out Options shall be canceled, and
holders of Cash-out Options with an exercise price below the Cash Merger
Consideration shall receive from Surviving Corporation (subject to any
applicable withholding taxes), with respect to each Cash-out Option, (i) an
amount in cash, without interest, equal to the product of (x) the excess of
the Cash Merger Consideration over the exercise price per share of such
Cash-out Option times (y) the number of shares of Company Common Stock
subject to such Cash-out Option (the "Cash Option Consideration") and (ii)
the number of Contingent Payment Rights as is equal to the number of shares
of Company Common Stock subject to such Cash-out Option. The Cash Option
Consideration shall be due and paid at (or as soon as practicable
following) the Effective Time."
SECTION 1.7. Section 2.8(b) of the Agreement is amended as follows:
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(a) In the first sentence, "shall be converted into and become an option"
is replaced with "shall be converted into and become (x) except for the
Specified Rollover Options, the number of Contingent Payment Rights as is equal
to the number of shares of Company Common Stock subject to such Rollover Option
and (y) an option".
(b) In the second sentence, "within 30 days after the date hereof" is
replaced with "within 14 days after the date of Amendment No. 1".
(c) The following sentence shall be added after the second sentence: "Such
schedule shall identify which Company Options constitute Specified Rollover
Options."
SECTION 1.8. The lead-in to Section 3.1 of the Agreement is amended and
restated as follows:
"SECTION 3.1 Representations and Warranties. Except for the Pursuit of
Claims (each as defined in the Escrow Agreement) in compliance with the
Escrow Agreement, the Specified Losses and the activity giving rise to the
Specified Losses and matters in respect of any Governmental Entity arising
from the delivery of the FSA Notices to any such Governmental Entity, the
Company represents and warrants to Parent as follows:"
SECTION 1.9. Section 3.1(s) of the Agreement is amended to replace "opinion
of Company's Financial Advisor, dated the date of this Agreement" with "opinions
of Company's Financial Advisor, dated the date of this Agreement and the date of
Amendment No. 1".
SECTION 1.10. Section 3.1(t) of the Agreement is amended to replace the
second sentence with the following:
"The Specified Asset Sales have been consummated in accordance with
the Specified Asset Sale Agreements. Neither Company nor any of its
Subsidiaries has any liability with respect to the business, operations,
assets or liabilities of AHA or any of its Subsidiaries, other than those
specified liabilities that are expressly disclosed in the Specified Asset
Sale Agreements. Prior to the consummation of the Specified Asset Sale
under the AHA Stock Purchase Agreement, Company caused AHA to make such
dividends or distributions to Company so that AHA's Tangible Net Worth (as
defined in the AHA Stock Purchase Agreement) was equal to zero (0) at the
closing of such Specified Asset Sale."
SECTION 1.11. Section 3.2(f) of the Agreement is amended and restated as
follows:
"Financing. Parent has and will have at the Effective Time sufficient
funds to pay the Cash Merger Consideration and the Cash Option
Consideration."
SECTION 1.12. Section 4.1 of the Agreement is amended to add the following
before the colon:
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"(provided further that none of the clauses of this Section 4.1 shall
be deemed to have been violated by reason of the Pursuit of Claims
(each as defined in the Escrow Agreement) in compliance with the Escrow
Agreement, the Specified Losses and the activity giving rise to the
Specified Losses and matters in respect of any Governmental Entity
arising from the delivery of the FSA Notices to any such Governmental
Entity)"
SECTION 1.13. Section 4.1(m) is amended to add the following to the
beginning of the first sentence: "Except for any settlement or compromise of
Claims,".
SECTION 1.14. Section 4.1(p) of the Agreement is amended to delete the
second sentence.
SECTION 1.15. Section 5.1(c) of the Agreement is amended to replace the
first sentence thereof with the following:
"If required by the SEC, as promptly as practicable following the date
of Amendment No. 1, Company shall prepare a revised preliminary Proxy
Statement and file it with the SEC. After the SEC review of the revised
preliminary Proxy Statement is complete and the Proxy Statement becomes
definitive (the "Final Proxy Statement"), Company shall mail the Final
Proxy Statement to the Company's stockholders. If the SEC does not
require Company to refile the Proxy Statement in preliminary form,
Company shall file the Final Proxy Statement with the SEC and mail it
to Company's stockholders as promptly as practicable following the date
of Amendment No. 1.".
SECTION 1.16. Each of Section 6.2(c) and Section 6.3(c) of the Agreement is
replaced with "[Intentionally Omitted]".
SECTION 1.17. Section 7.1(c) of the Agreement is amended by replacing
"August 15, 2002" with "October 15, 2002".
SECTION 1.18. Section 8.3 of the Agreement is amended by deleting ", unless
the context otherwise requires," from the fifth sentence thereof.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1. Due Authorization, Etc. Each party represents and warrants
that this Amendment, the Escrow Agreement and the Paying Agent Agreement (as
defined in the Escrow Agreement) has been duly authorized, executed and
delivered by it and constitutes a valid and binding obligation of such party,
enforceable against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights and remedies
of creditors generally, and subject to general principles of equity, whether
applied by a court of law or equity.
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SECTION 2.2. Board Approval. Xxxxxx represents and warrants that the Board
of Directors has reaffirmed the resolutions described in Section 3.1(l) of the
Agreement.
SECTION 2.3. Agreement Otherwise Unchanged. Except as expressly set forth
herein, the terms, provisions and conditions of the Agreement shall remain in
full force and effect and are in all respects hereby ratified and confirmed.
Other than as specifically provided herein, this Amendment shall not operate as
a waiver or amendment of any right, power or privilege of any party under the
Agreement or of any other term or condition of the Agreement.
SECTION 2.4. Headings. The headings contained in this Amendment are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Amendment.
SECTION 2.5. Counterparts. This Amendment may be executed in 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.
SECTION 2.6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by their respective officers thereunto duly authorized, all as of the
first written above.
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman
INDIGO ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director and Chief Executive
Officer
XXXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman and Chief Executive
Officer
[Annex A]
List of Stockholders Delivering Waiver
Xxxxxx X.X. Xxxxxx
Xxxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx X. Xxxxxx Family Trust
Xxxxx X. Xxxxxx Grantor Retained Annuity Trust
Xxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxxx X.X. Xxxx
[Annex B]
Form of Waiver Letter
This Waiver (the "Waiver") is delivered by the stockholder of Xxxxxx Group
Inc., a Delaware corporation ("Company"), identified on the signature page
hereof ("Stockholder").
Reference is made to the Agreement and Plan of Merger dated as of February
28, 2002 by and among Investment Technology Group, Inc., a Delaware corporation
("Parent"), Company and Indigo Acquisition Corp. ("Merger Subsidiary"), a
Delaware corporation and a direct wholly owned subsidiary of Parent, as amended
by Amendment No. 1 thereto dated July 2, 2002 (the "Amendment," and the
Agreement and Plan of Merger as so amended, the "Merger Agreement"). Capitalized
terms used herein without definition have the meanings given to them in the
Merger Agreement.
On May 9, 2002, Company announced certain unauthorized trading and
resulting losses at its wholly owned subsidiary Xxxxxx & Company Limited, a U.K.
limited company. In light of such losses, Parent, Merger Subsidiary and Company
have agreed to amend the Merger Agreement in order to adjust the Merger
Consideration and make certain other changes.
As a condition to its execution and delivery of the Amendment, Parent is
requiring the receipt of letters in the form of this Waiver executed by each
person listed on Annex A to the Amendment, including Stockholder.
In consideration of (i) the execution and delivery of the Amendment by
Parent and Merger Subsidiary, (ii) the Merger Consideration to be received in
exchange for shares of Company Common Stock held by Stockholder and/or the
consideration to be received in the Merger in exchange for Company Options held
by Stockholder and (iii) for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by Stockholder, Stockholder
hereby agrees and acknowledges as follows:
1. Waiver. Stockholder hereby irrevocably and unconditionally waives any
and all actions, causes of action, claims, allegations, rights, obligations,
liabilities or charges that Stockholder has or may have, now or in the future,
whether known or unknown, against ITG, Xxxxxx, Xxxxxx UK, their respective
affiliates, any officer, director, employee or stockholder of any of the
foregoing, the Committee, any Member or the Agent (each as defined in the Escrow
Agreement) or any attorney, agent, successor or assign of any of the foregoing
(collectively, the "Beneficiaries") relating to or arising out of the Contingent
Payment Rights, the Contingent Payment, the Escrow, the Escrow Assets or any
decision, action or failure to act by any person in respect of any of the
foregoing or under the Escrow Agreement or the Paying Agent Agreement; provided
that the foregoing waiver shall not apply if Stockholder is a Member of the
Committee acting in his or her capacity as a Member under the Escrow Agreement.
2. Representation by Counsel. By executing this Waiver, Stockholder
acknowledges that Stockholder has been advised to consult with an attorney
before executing this Waiver.
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3. Further Assurances. Stockholder shall promptly execute, acknowledge and
deliver any and all documents and take any and all actions, as any of the
Beneficiaries shall reasonably request in order to carry out the intent and
meaning of, and to give full effect to, this Waiver.
4. Governing Law. This Waiver shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York. Each Beneficiary
shall entitled to enforce this Waiver in any court of the United States or of
the State of New York sitting in the Borough of Manhattan, City of New York.
IN WITNESS WHEREOF, the undersigned has duly executed this Waiver on the
date set forth below.
Date: , 2002
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Name of Stockholder (please print):
By:
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Name:
Title:
