EXHIBIT 2(b)
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of April 30, 2000 (this "Agreement"),
is between Reliastar Financial Corp., a Delaware corporation ("Issuer") and ING
America Insurance Holdings, Inc., a Delaware corporation ("Grantee").
RECITALS
A. The Merger Agreement. Prior to the entry into this Agreement and prior
to the grant of the Option, Issuer, ING Groep N.V., Grantee, and SHP Acquisition
Corp., a wholly-owned subsidiary of Grantee ("Merger Sub") have entered into an
Agreement and Plan of Merger, dated as of the date of this Agreement (the
"Merger Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), pursuant to which Grantee and
Issuer intend to effect a merger of Merger Sub with and into Issuer (the
"Merger").
B. The Stock Option Agreement. As an inducement and condition to Grantee's
and Merger Sub's willingness to enter into the Merger Agreement, and in
consideration thereof, the board of directors of Issuer has approved the grant
to Grantee of the Option pursuant to this Agreement and the acquisition of
Shares by Grantee pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth in this Agreement and in the Merger Agreement, the
parties agree as follows:
1. The Option. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms of this
Agreement, up to 8,873,630 fully paid and nonassessable Shares at a price per
share in cash equal to $54.00 (the "Option Price"); provided, however, that in
no event shall the number of shares for which the Option is exercisable exceed
9.9% of the Shares issued and outstanding at the time of exercise (without
giving effect to the Shares issued or issuable under the Option) (the "Maximum
Applicable Percentage"). The number of Shares purchasable upon exercise of the
Option and the Option Price are subject to adjustment as set forth in this
Agreement.
(b) In the event that any additional Shares are issued or otherwise
become outstanding after the date of this Agreement (other than pursuant to
an event described in Section 7 of this Agreement), the aggregate number of
Shares purchasable upon exercise of the Option (inclusive of Shares, if
any, previously purchased upon exercise of the Option) shall automatically
be increased (without any further action on the part of Issuer
or Grantee being necessary) so that, after such issuance, it equals the
Maximum Applicable Percentage. Any such increase shall not affect the
Option Price.
2. Exercise; Closing. (a) Conditions to Exercise; Termination. Grantee or
any other person that shall become a holder of all or a part of the Option in
accordance with the terms of this Agreement (each such person being referred to
in this Agreement as the "Holder") may exercise the Option, in whole or in part,
by delivering a written notice thereof as provided in Section 2(d) at any time
following the occurrence of a Triggering Event unless prior to such Triggering
Event the Effective Time shall have occurred. If no notice pursuant to the
preceding sentence has been delivered prior thereto, the Option shall terminate
upon either (I) the occurrence of the Effective Time or (ii) the close of
business on the earlier of (x) the day 180 days after the date that Grantee
becomes entitled to receive the Termination Fee under Section 8.5(b) of the
Merger Agreement (or if, at the expiration of such 180 days, 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) and (y) the date that Grantee is no longer potentially entitled to
receive the Termination Fee under Section 8.5(b) of the Merger Agreement for a
reason other than that Grantee has already received the Termination Fee.
(b) Triggering Event. A "Triggering Event" shall have occurred if the
Merger Agreement is terminated and Grantee thereby becomes entitled to
receive the Termination Fee pursuant to Section 8.5(b) of the Merger
Agreement.
(c) Notice of Triggering Event by Issuer. Issuer shall notify Grantee
promptly in writing of the occurrence of any Triggering Event, it being
understood that the giving of such notice by Issuer shall not be a
condition to the right of the Holder to exercise the Option.
(d) Notice of Exercise by Grantee. If a Holder shall be entitled to
and wishes to exercise the Option, it shall send to Issuer a written notice
(the date of which is referred to in this Agreement as the "Notice Date")
specifying (i) the total number of shares that the Holder will purchase
pursuant to such exercise and (ii) a place and date (a "Closing Date") not
earlier than three business days nor later than 60 business days from the
Notice Date for the closing of such purchase (a "Closing"); provided, that
if a filing is required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), or any other notice, report,
filing or approval is required with respect to any Governmental Entity in
connection with such purchase, (x) the Holder or Issuer, as required,
promptly after the giving of such notice shall file the required notice,
report, filing or application for approval and shall expeditiously process
the same and (y) the period of time referred to in clause (ii) above shall
commence on the date on which the Holder furnishes to Issuer a supplemental
written notice setting forth the Closing Date,
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which notice shall be furnished as promptly as practicable after all
required notification, reporting or filing periods shall have expired or
been terminated, all required approvals shall have been obtained and all
requisite waiting periods shall have passed. Each of the Holder and the
Issuer agrees to use its reasonable best efforts to cooperate with and
provide information to Issuer or Holder, as the case may be, for the
purpose of any required notice, report, filing or application for approval.
(e) Payment of Purchase Price. At each Closing, the Holder shall pay
to Issuer the aggregate purchase price for the Shares purchased pursuant to
the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by Issuer; provided, that failure or
refusal of Issuer to designate such a bank account shall not preclude the
Holder from exercising the Option, in whole or in part.
(f) Delivery of Common Stock. At such Closing, simultaneously with the
payment of the purchase price by the Holder, Issuer shall deliver to the
Holder a certificate or certificates representing the number of Shares
purchased by the Holder, which Shares shall be free and clear of all liens,
charges, encumbrances or security interests ("Liens") and, if the Option
shall be exercised in part only, a new Option evidencing the rights of the
Holder to purchase the balance (as adjusted pursuant to Section 1(b)) of
the Shares then purchasable under this Agreement.
(g) Restrictive Legend. Certificates for Shares delivered at a Closing
may be endorsed with a restrictive legend that shall read 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."
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the Holder
shall have delivered to Issuer a copy of a letter from the staff of the
Securities and Exchange Commission, or a written opinion of counsel, in
form and substance reasonably satisfactory to Issuer, to the effect that
such legend is not required for purposes of the Securities Act of 1933, as
amended (the "Securities Act"). In addition, such certificates shall bear
any other legend as may be required by applicable law.
(h) Ownership of Record; Tender of Purchase Price; Expenses. Upon the
giving by the Holder to Issuer of a written notice of exercise referred to
in Section 2(d) and the tender of the applicable purchase price in
immediately available funds, the Holder shall be deemed to be the holder of
record of the Shares issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that certificates
representing such Shares shall not have been delivered to the Holder.
Issuer
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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 the Holder or its assignee, transferee or designee.
3. Covenants of Issuer. In addition to its other agreements and covenants
in this Agreement, Issuer agrees:
(a) Shares Reserved for Issuance. It will maintain, free from
preemptive rights, sufficient authorized but unissued or treasury Shares to
issue the appropriate number of Shares pursuant to the terms of this
Agreement so that the Option may be fully exercised without additional
authorization of Shares after giving effect to all other options, warrants,
convertible securities and other rights of third parties to purchase Shares
from Issuer.
(b) No Avoidance. It will not 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 under this Agreement
by Issuer.
(c) Further Assurances. Promptly after the date of this Agreement it
will take all actions as may from time to time be required (including (i)
complying with all applicable premerger notification, reporting and waiting
period requirements under the HSR Act and (ii) in the event that prior
notice, report, filing or approval with respect to any Governmental Entity
is necessary under any applicable foreign or United States federal, state
or local law before the Option may be exercised, cooperating fully with the
Holder in preparing and processing the required applications or notices) in
order to permit each Holder to exercise the Option and purchase Shares
pursuant to such exercise and to take all action necessary to protect the
rights of the Holder against dilution.
(d) Stock Exchange Listing. It will use its reasonable best efforts to
cause the Shares to be issued pursuant to the Option to be approved for
listing (to the extent they are not already listed) on the New York Stock
Exchange ("NYSE") and on all other stock exchanges on which Shares of the
Issuer are then listed, subject to official notice of issuance.
4. Representations and Warranties of Issuer. Issuer represents and warrants
to Grantee as follows:
(a) Merger Agreement. Issuer hereby makes each of the representations
and warranties contained in Sections 5.1(a)(i), (b), (c) (first
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sentence), (d)(i), (d)(ii), (j), (p) and (q) of the Merger Agreement as
they relate to Issuer and this Agreement, as if such representations were
set forth in this Agreement.
(b) Shares Reserved for Issuance; Capital Stock. Issuer has taken all
necessary corporate action to authorize and reserve, free from preemptive
rights, and permit it to issue, at all times from the date hereof until the
obligation to deliver Shares upon the exercise of the Option terminates,
sufficient authorized but unissued or treasury Shares so that the Option
may be fully exercised without additional authorization of Shares after
giving effect to all other options, warrants, convertible securities and
other rights of third parties to purchase Shares from Issuer, and all such
Shares, upon issuance pursuant to the Option, will be duly authorized,
validly issued, fully paid and nonassessable, and will be delivered free
and clear of all claims, Liens (other than those created by this Agreement)
and not subject to any preemptive rights.
5. Representations and Warranties of Grantee. Grantee represents and
warrants to Issuer that Grantee has all requisite corporate power and authority
and has taken all corporate action necessary in order to execute, deliver and
perform its obligations under and to consummate the transactions contemplated by
this Agreement. This Agreement has been duly and validly executed and delivered
by Grantee and constitutes a valid and binding agreement of Grantee enforceable
against Grantee in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
6. Exchange; Replacement. This Agreement and the Option granted by this
Agreement are exchangeable, without expense, at the option of the Holder, 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 at such time under this Agreement, subject to corresponding
adjustments in the number of Shares purchasable upon exercise so that the
aggregate number of such Shares under all stock option agreements issued in
respect of this Agreement shall not exceed the Maximum Applicable Percentage.
Unless the context shall require otherwise, the terms "Agreement" and "Option"
as used in this Agreement include any stock option agreements and related
Options for which this Agreement (and the Option granted by this Agreement) may
be exchanged. Upon (i) receipt by Issuer of evidence reasonably satisfactory to
it of the loss, theft, destruction of this Agreement, or mutilation of this
Agreement, (ii) receipt by Issuer of reasonably satisfactory indemnification in
the case of loss, theft or destruction of this Agreement and (iii) surrender and
cancellation of this Agreement in the case of mutilation, Issuer will execute
and deliver a new Agreement of
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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 any person other than the holder of the new Agreement.
7. Adjustments. In addition to the adjustment to the total number of Shares
purchasable upon exercise of the Option pursuant to Section 1(b), the total
number of Shares purchasable upon the exercise of the Option and the Option
Price shall be subject to adjustment from time to time as follows:
(a) In the event of any change in the outstanding shares of Common
Stock by reason of stock dividends, stock splits, split-ups, mergers,
recapitalizations, reclassifications, combinations, subdivisions,
conversions, exchanges of shares or the like, the type and number of Shares
purchasable upon exercise of the Option shall be appropriately adjusted,
and proper provision shall be made in the agreements governing any such
transaction, so that (i) any Holder shall receive upon exercise of the
Option the number and class of shares, other securities, property or cash
that such Holder would have received in respect of the Shares purchasable
upon exercise of the Option if the Option had been exercised and such
Shares had been issued to such Holder immediately prior to such event or
the record date therefor, as applicable, and (ii) in the event any
additional Shares are to be issued or otherwise become outstanding as a
result of any such change (other than pursuant to an exercise of the
Option), the number of Shares purchasable upon exercise of the Option shall
be increased so that, after such issuance and together with Shares
previously issued pursuant to the exercise of the Option (as adjusted on
account of any of the foregoing changes in the Shares), the number of
Shares so purchasable equals the Maximum Applicable Percentage of the
number of Shares issued and outstanding immediately after the consummation
of such change.
(b) Whenever the number of Shares purchasable upon exercise of the
Option is adjusted as provided in this Section 7, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of
which is equal to the number of Shares purchasable prior to the adjustment
and the denominator of which is equal to the number of Shares purchasable
after the adjustment.
8. Registration. (a) Upon the occurrence of a Triggering Event, Issuer
shall, at the request of Grantee delivered in the written notice of exercise of
the Option provided for in Section 2(d), as promptly as practicable prepare,
file and keep current a shelf registration statement under the Securities Act
covering any or all Shares issued and issuable pursuant to the Option and shall
use its best efforts to cause such registration statement to become effective
and remain current in order to permit the sale or other
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disposition of any Shares 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 8 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. Issuer will use its best
efforts to cause such registration statement first to become effective as soon
as practicable and then to remain effective for one year from the day such
registration statement first becomes effective or until such earlier date as all
Shares registered shall have been sold by Grantee. In 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 shall become a party to any underwriting agreement relating
to the sale of such Shares, but only to the extent of obligating Issuer in
respect of representations, warranties, indemnities, contribution and other
agreements customarily made by issuers in such underwriting agreements.
(b) In the event that Grantee so requests, the closing of the sale or
other disposition of the Shares or other securities pursuant to a
registration statement filed pursuant to Section 8(a) shall occur
substantially simultaneously with the exercise of the Option. 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 and brokers fees.
9. Repurchase of Option and/or Shares. (a) Repurchase; Repurchase Price.
Upon the occurrence of a Triggering Event, (i) at the request of a Holder,
delivered in writing within 180 days of such occurrence (or such later period as
provided in Section 2(d) with respect to any required notice or application or
in Section 10), Issuer shall repurchase the Option from the Holder, in whole or
in part, at a price (the "Option Repurchase Price") equal to the number of
Shares then purchasable upon exercise of the Option (or such lesser number of
Shares as may be designated in the Repurchase Notice) multiplied by the amount
by which the market/offer price exceeds the Option Price and (ii) at the request
of a Holder or any person who has been a Holder (for purposes of this Section 9
only, each such person being referred to as a "Holder"), delivered in writing
within 180 days of such occurrence (or such later period as provided in Section
2(d) with respect to any required notice or application or in Section 10),
Issuer shall repurchase such number of Option Shares from such Holder as the
Holder shall designate in the Repurchase Notice at a price (the "Option Share
Repurchase Price") equal to the number of Shares designated multiplied by the
market/offer price. The term "market/offer price"shall mean the highest of (x)
the highest price per Share at which an Acquisition Proposal for Shares has been
made, (y) the price per Share to be paid by any third party pursuant to an
agreement relating to an Acquisition Proposal with Issuer and (z) the
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highest trading price for Shares on the NYSE (or, if the Shares are not then
listed on the NYSE, any other national securities exchange or automated
quotation system on which the Shares are then listed or quoted) within the
120-day period immediately preceding the delivery of the Repurchase Notice. In
the event that an Acquisition Proposal is made for the Shares or an agreement is
entered into relating to an Acquisition Proposal involving consideration other
than cash, the value of the securities or other property issuable or deliverable
in exchange for the Shares shall (I) if such consideration is in securities and
such securities are listed on a national securities exchange, be determined to
be the highest trading price for such securities on such national securities
exchange within the 120-day period immediately preceding the delivery of the
Repurchase Notice or (II) if such consideration is not securities, or if in
securities and such securities are not traded on a national securities exchange,
be determined in good faith by a nationally recognized investment banking firm
selected by an investment banking firm designated by Grantee and an investment
banking firm designated by Issuer.
(b) Method of Repurchase. A Holder may exercise its right to require
Issuer to repurchase the Option, in whole or in part, and/or any Option
Shares then owned by such Holder pursuant to this Section 9 by surrendering
for such purpose to Issuer, at its principal office, this Agreement or
certificates for Option Shares, as applicable, accompanied by a written
notice or notices stating that the Holder elects to require Issuer to
repurchase the Option and/or such Option Shares in accordance with the
provisions of this Section 9 (each such notice, a "Repurchase Notice"). As
promptly as practicable, and in any event within two business days after
the surrender of the Option and/or certificates representing Option Shares
and the receipt of the Repurchase Notice relating thereto, Issuer shall
deliver or cause to be delivered to the Holder the applicable Option
Repurchase Price and/or the Option Share Repurchase Price. Any Holder shall
have the right to require that the repurchase of Option Shares shall occur
immediately after the exercise of all or part of the Option. In the event
that the Repurchase Notice shall request the repurchase of the Option in
part, Issuer shall deliver with the Option Repurchase Price a new Stock
Option Agreement evidencing the right of the Holder to purchase that number
of shares of Common Stock purchasable pursuant to the Option at the time of
delivery of the Repurchase Notice minus the number of Shares represented by
that portion of the Option then being repurchased.
(c) Effect of Statutory or Regulatory Restraints on Repurchase. To the
extent that, upon or following the delivery of a Repurchase Notice, Issuer
is prohibited under applicable law or regulation from repurchasing the
Option (or portion thereof) and/or any Option Shares subject to such
Repurchase Notice (and Issuer will undertake to use its reasonable best
efforts to obtain all required regulatory and legal approvals and to file
any required notices as promptly as practicable in order to accomplish such
repurchase), Issuer shall immediately so notify the Holder in writing and
thereafter deliver or cause to be delivered, from time to time, to the
Holder the portion of the Option Repurchase Price
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and the Option Share Repurchase Price that Issuer is no longer prohibited
from delivering, within two business days after the date on which it is no
longer so prohibited; provided, however, that upon notification by Issuer
in writing of such prohibition, the Holder may, within five days of receipt
of such notification from Issuer, revoke in writing its Repurchase Notice,
whether in whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly (i) deliver to the Holder that portion
of the Option Repurchase Price and/or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver to the
Holder, as appropriate, (A) with respect to the Option, a new stock option
agreement evidencing the right of the Holder to purchase that number of
Shares for which the surrendered stock option agreement was exercisable at
the time of delivery of the Repurchase Notice less the number of shares as
to which the Option Repurchase Price has theretofore been delivered to the
Holder, and/or (B) with respect to Option Shares, a certificate for the
Option Shares as to which the Option Share Repurchase Price has not
theretofore been delivered to the Holder. Notwithstanding anything to the
contrary in this Agreement, including, without limitation, the time
limitations on the exercise of the Option, the Holder may give notice of
exercise of the Option for 180 days after a notice of revocation has been
issued pursuant to this Section 9(c) and thereafter exercise the Option in
accordance with the applicable provisions of this Agreement.
(d) Acquisition Transactions. In addition to any other restrictions or
covenants, Issuer agrees that, in the event that a Holder delivers a
Repurchase Notice, Issuer shall not enter or agree to enter into an
agreement or series of agreements relating to a merger with or into or the
consolidation with any other person or entity, the sale of all or
substantially all of the assets of Issuer or any similar disposition unless
the other party or parties to such agreement or agreements agree to assume
in writing Issuer's obligations under Section 9(a) and, notwithstanding any
notice of revocation delivered pursuant to the proviso to Section 9(c), a
Holder may require such other party or parties to perform Issuer's
obligations under Section 9(a) unless such party or parties are prohibited
by law or regulation from such performance, in which case such party or
parties shall be subject to the obligations of the Issuer under Section
9(c).
(e) Repurchase at the Option of the Issuer. (i) To the extent the
Grantee shall not have previously exercised its rights under Section 9(a),
at the request of the Issuer made at any time after the tenth day following
a Closing pursuant to Section 2 hereof and for a period ending 120 days
after the termination of the Option in accordance with Section 2 hereof
(the "Call Period"), the Issuer may repurchase from the Grantee, and the
Grantee shall sell, or cause to be sold, to the Issuer, all (but not less
than all) of the Option Shares acquired by the Grantee pursuant hereto and
with respect to which the Grantee has ownership at the time of such
repurchase at a price per Option Share equal to the greater of (A) the
market/offer price and (B) the Option Price per share in respect of the
Option Shares so acquired (such price per Option Share multiplied by the
number of
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Option Shares to be repurchased pursuant to this Section 9(e) being herein
called the "Call Consideration"). The date on which the Issuer exercises
its rights under this Section 9(e) is referred to as the "Call Date."
(ii) If the Issuer exercises its rights under this Section 9(e),
the Issuer shall, within ten business days pay the Call Consideration
in immediately available funds, and the Grantee shall surrender to the
Issuer certificates evidencing the Option Shares purchased hereunder,
and the Grantee shall warrant to the Issuer that, immediately prior to
the repurchase thereof pursuant to this Section 9(e), the Grantee had
sole record and beneficial ownership of such Option Shares and that
such shares were then held free and clear of all Liens.
(iii) To the extent that the Grantee shall exercise the Option,
the Grantee shall, unless the Grantee shall exercise its rights under
Section 9(a) or the Issuer shall exercise the Call Right, retain sole
ownership of the Option Shares so acquired through the end of the Call
Period.
10. Extension of Exercise Periods. The 180-day periods for exercise of
certain rights under Sections 2 and 9 shall be extended in each such case at
there quest of the Holder to the extent necessary to avoid liability by the
Holder under Section 16(b) of the Securities Exchange Act of 1934, as amended,
by reason of such exercise.
11. Assignment. Neither party may assign any of its rights or obligations
under this Agreement or the Option to any other person without the express
written consent of the other party except that Grantee may, without the prior
written consent of Issuer assign the Option, in whole or in part, to any
affiliate of Grantee. Any attempted assignment in contravention of the preceding
sentence shall be null and void.
12. Filings; Other Actions. Issuer and Grantee each will use its best
efforts to make all filings with, and to obtain consents of, all third parties
and governmental authorities necessary for the consummation of the transactions
contemplated by this Agreement.
13. Specific Performance. The parties acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party and that the
obligations of the parties shall be specifically enforceable through injunctive
or other equitable relief.
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, 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
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court or regulatory agency determines that the Holder is not permitted to
acquire, or Issuer is not permitted to repurchase pursuant to Section 9, the
full number of Shares provided in Section 1(a) of this Agreement (as adjusted
pursuant to Sections 1(b) and 7 of this Agreement), it is the express intention
of Issuer to allow the Holder to acquire or to require Issuer to repurchase such
lesser number of Shares as may be permissible, without any amendment or
modification of this Agreement.
15. Notices. Notices, requests, instructions, or other documents to be
given under this Agreement shall be in writing and shall be deemed given (i)
three business days following sending by registered or certified mail, postage
prepaid, (ii) when sent, if sent by facsimile, provided that a copy of the fax
is promptly sent by U.S. mail, (iii) when delivered, if delivered personally to
the intended recipient, and (iv) one business day later, if sent by overnight
delivery via a national courier service, in each case at the respective
addresses of the parties set forth in the Merger Agreement.
16. Expenses. Except as otherwise expressly provided in this Agreement or
in the Merger Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expense, including fees and expenses of its own
financial consultants, investment bankers, accountants, and counsel.
17. Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter of this Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns. Nothing in this Agreement, is
intended to confer upon any person or entity, other than the parties to this
Agreement, and their respective successors and permitted assigns, any rights or
remedies under this Agreement.
18. Governing Law and Venue; Waiver of Jury Trial.
(a) This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with
Delaware law without regard to the conflict of law principles thereof. The
parties irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United
States of America located in Wilmington, Delaware (the "Delaware Courts")
for any litigation arising out of or relating to this Agreement and the
transactions contemplated by this Agreement (and agree not to commence any
litigation relating thereto except in such Delaware Courts), waive any
objection to the laying of venue of any such litigation in the Delaware
Courts and agree not to plead or claim in any
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Xxxxxxxx Xxxxx that such litigation brought therein has been brought in an
inconvenient forum.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF
THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
19. Captions. The Section and paragraph captions in this Agreement are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions of this
Agreement.
20. Limitation on Profit. (a) Notwithstanding any other provision of this
Agreement, in no event shall the Grantee's Total Profit (as defined
herein)exceed in the aggregate $150 million (the "Maximum Amount") and, if it
otherwise would exceed such amount, the Grantee, at its sole election, shall
either: (i) reduce the number of Shares subject to this Option; (ii) deliver to
the Issuer for cancellation Option Shares previously purchased by Grantee; (iii)
pay cash to the Issuer; or (iv) any combination thereof, so that Grantee's
actually realized Total Profit shall not exceed the Maximum Amount taking into
account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, 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
20(a) above) (i) reduce the number of Shares subject to the Option or (ii)
increase the Option Price for that number of Shares set forth in the
exercise notice so that the Notional Total Profit shall not exceed the
Maximum Profit; provided, that nothing in this
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sentence shall restrict any exercise of the Option permitted hereby on any
subsequent date.
(c) As used in this Agreement, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) (x) the amount
received by Grantee pursuant to Issuer's repurchase of the Option (or any
portion thereof) or any Option Shares pursuant to Section 9, less, in the
case of any repurchase of Option Shares, (y) the Grantee's purchase price
for such Option Shares, as the case may be plus (ii) (x) the net cash
amounts 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 (y) the Grantee's purchase price of such
Option Shares plus (iii) any Termination Fee paid by the Issuer and
received by the Grantee pursuant to Section 8.5(b) of the Merger Agreement
minus (iv) (x) the amounts of any cash previously paid by Grantee to Issuer
pursuant to this Section 20 plus the value of the Option Shares (or other
securities) previously delivered by Grantee to Issuer for cancellation
pursuant to this Section 20.
(d) As used in this Agreement, 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 for the Shares 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
8.5(b) 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 20(a).
(f) For purposes of Section 20(a) and clause (iv) of Section 20(c),
the value of any Option Shares delivered by Grantee to Issuer shall be the
market/offer price of such Option Shares.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties as of the day and year first written
above.
RELIASTAR FINANCIAL CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and
General Counsel
ING AMERICA INSURANCE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
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