STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of May 25, 2000 is by and between
Santa Xx Xxxxxx Corporation, a Delaware corporation (the "Company"), and
Devon Energy Corporation, a Delaware corporation (the "Grantee").
RECITALS
The Grantee, the Company and Merger Co., a Delaware corporation wholly
owned by the Grantee ("Merger Co."), propose to enter into the Merger
Agreement providing, among other things, for the Merger pursuant to the
Merger Agreement of Merger Co. with and into the Company, which shall be the
surviving corporation.
As a condition and inducement to the Grantee's willingness to enter into
the Merger Agreement, the Grantee has requested that the Company agree, and
the Company has agreed, to grant the Grantee the Option.
The Board of Directors of the Grantee has approved and adopted the
Merger Agreement, the Merger and this Agreement and has recommended approval
of the Merger Agreement by the holders of Devon Common Stock (as defined in
the Merger Agreement).
The Board of Directors of the Company has approved and adopted the
Merger Agreement, the Merger and this Agreement and has recommended approval
of the Merger Agreement by the holders of Santa Xx Xxxxxx Common Stock (as
defined in the Merger Agreement).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, the Company and the Grantee agree as follows:
1. CAPITALIZED TERMS. Those capitalized terms used but not defined herein
that are defined in the Merger Agreement are used herein with the same
meanings as ascribed to them therein; PROVIDED, HOWEVER, that, as used in
this Agreement, "Person" shall have the meaning specified in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act. Those capitalized terms used in this
Agreement that are not defined in the Merger Agreement are defined in Annex A
hereto and are used herein with the meanings ascribed to them therein.
2. THE OPTION.
(a) GRANT OF OPTION. Subject to the terms and conditions set forth
herein, the Company hereby grants to the Grantee an irrevocable option to
purchase, out of the authorized but unissued Santa Xx Xxxxxx Common Stock,
36,424,413 shares of Santa Xx Xxxxxx Common Stock (as adjusted as set forth
herein) (the "Option Shares"), at the Exercise Price.
(b) EXERCISE PRICE. The exercise price (the "Exercise Price") per
Option Share shall be the Current Market Price per share of Santa Xx Xxxxxx
Common Stock on the date of this Agreement.
(c) TERM. The Option shall either (i) be exercisable at any time and
from time to time following the occurrence of an Exercise Event described in
subsection (i) of the definition of an Exercise Event and remain in full
force and effect for one year thereafter, or (ii) be exercisable at any time
and from time to time following the occurrence of an Exercise Event described
in subsection (ii) of the definition of an Exercise Event and remain in full
force and effect for one year thereafter (the "Option Term"). This Option
shall terminate on the earliest to occur of (i) the failure of Grantee to
exercise the Option prior to the termination of the Option Term, (ii) the
Effective Time, (iii) Grantee's written notice of termination of this
Agreement to the Company, and (iv) termination of the Merger Agreement in
accordance with its terms under circumstances in which the Option does not
and could not, through the passage of time or in conjunction with subsequent
events, become exercisable in accordance with the preceding sentence.
(d) EXERCISE OF OPTION.
(i) The Grantee may exercise the Option, in whole or in part, at
any time and from time to time during the Option Term. Notwithstanding the
expiration of the Option Term, the Grantee shall be entitled to purchase
those Option Shares with respect to which it has exercised the Option in
accordance with the terms hereof prior to the expiration of the Option Term.
(ii) If the Grantee wishes to exercise the Option, it shall send a
written notice (an "Exercise Notice") (the date of which being herein
referred to as the "Notice Date") to the Company specifying (i) the total
number of Option Shares it intends to purchase pursuant to such exercise and
(ii) a place and a date (the "Closing Date") not earlier than three Business
Days nor later than 15 Business Days from the Notice Date for the closing of
the purchase and sale pursuant to the Option (the "Closing").
(iii) If the Closing cannot be effected by reason of the
application of any Law, Regulation or Order, the Closing Date shall be
extended to the tenth Business Day following the expiration or termination of
the restriction imposed by such Law, Regulation or Order; PROVIDED HOWEVER,
that during this extended period, notwithstanding any prior Exercise Notice,
Grantee shall be entitled to rescind such Exercise Notice and shall not be
obligated to purchase any Option Shares in connection with such exercise upon
written notice to such effect to the Company. Without limiting the
foregoing, if prior notification to, or Authorization of, any Governmental
Authority is required in connection with the purchase of such Option Shares
by virtue of the application of such Law, Regulation or Order, the Grantee
and, if applicable, the Company shall promptly file the required notice or
application for Authorization and the Grantee, with the cooperation of the
Company, shall expeditiously process the same.
(e) PAYMENT AND DELIVERY OF CERTIFICATES.
(i) At each Closing, the Grantee shall pay to the Company in
immediately available funds by wire transfer to a bank account designated by
the Company an amount equal to the Exercise Price multiplied by the number of
Option Shares to be purchased on such Closing Date. Alternatively, the
Grantee may elect to purchase Option Shares issuable, and pay some or all of
the aggregate Exercise Price payable, upon an exercise of the Option by
surrendering a portion of the Option with respect to such number of Option
Shares as is determined by dividing
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(i) the aggregate Exercise Price payable in respect of the number of Option
Shares being purchased in such manner by (ii) the excess of the Current
Market Price per share of Santa Xx Xxxxxx Common Stock as of the last trading
day preceding the date Grantee delivers its Exercise Notice over the per
share Exercise Price.
(ii) At each Closing, simultaneously with the delivery of
immediately available funds as provided above, the Company shall deliver to
the Grantee a certificate or certificates representing the Option Shares to
be purchased at such Closing, which Option Shares shall be duly authorized,
validly issued, fully paid and nonassessable and free and clear of all Liens,
and the Grantee shall deliver to the Company its written agreement that the
Grantee will not offer to sell or otherwise dispose of such Option Shares in
violation of applicable Law or the provisions of this Agreement.
(f) CERTIFICATES. Certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend that 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.
A new certificate or certificates evidencing the same number of shares
of the Santa Xx Xxxxxx Common Stock will be issued to the Grantee in lieu of
the certificate bearing the above legend, and such new certificate shall not
bear such legend if the Grantee shall have delivered to the Company a copy of
a letter from the staff of the Commission, or an opinion of counsel in form
and substance reasonably satisfactory to the Company and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.
(g) If at the time of issuance of any Santa Xx Xxxxxx Common Stock
pursuant to any exercise of the Option, the Company shall have issued any
share purchase rights or similar securities to holders of Santa Xx Xxxxxx
Common Stock, then each Option Share purchased pursuant to the Option shall
also include rights with terms substantially the same as and at least as
favorable to the Grantee as those issued to other holders of Santa Xx Xxxxxx
Common Stock.
3. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Santa Xx
Xxxxxx Common Stock by reason of a stock dividend, stock split, split-up,
merger, consolidation, recapitalization, combination, conversion, exchange of
shares, extraordinary or liquidating dividend or similar transaction which
would have the effect of diluting the Grantee's rights hereunder, the type
and number of shares or securities purchasable upon the exercise of the
Option and the Exercise Price shall be adjusted appropriately, and proper
provision will be made in the agreements governing such transaction, so that
the 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 the Option Shares had the Option been exercised immediately prior
to such event or the record date therefor, as applicable. In no event shall
the number of shares of Santa Xx Xxxxxx Common Stock subject to the Option
exceed 19.9% of the number of shares of Santa Xx Xxxxxx Common Stock issued
and outstanding at the time of exercise.
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(b) Without limiting the foregoing, whenever the number of Option
Shares purchasable upon exercise of the Option is adjusted as provided in
this Section 3, the Exercise Price shall be adjusted by multiplying the
Exercise 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, if the Company enters into an agreement to consummate a
Business Combination Transaction, 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, and will make any other necessary adjustments and the Company
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.
4. REPURCHASE AT THE OPTION OF GRANTEE.
(a) At the request of the Grantee made at any time and from time to
time after the occurrence of an Exercise Event and prior to 120 days after
the expiration of the Option Term (the "Put Period"), the Company (or any
successor thereto) shall, at the election of the Grantee (the "Put Right"),
repurchase from the Grantee (i) that portion of the Option relating to all or
any part of the Unexercised Option Shares (or as to which the Option has been
exercised but the Closing has not occurred) and (ii) all or any portion of
the Option Shares of Santa Xx Xxxxxx Common Stock purchased by the Grantee
upon exercise of the Option (or any portion thereof) and with respect to
which the Grantee then has ownership. The date on which the Grantee exercises
its rights under this Section 4 is referred to as the "Put Date." Such
repurchase shall be at an aggregate price (the "Put Consideration") equal to
the sum of:
(i) the aggregate Exercise Price paid by the Grantee for any
Option Shares which the Grantee owns and as to which the Grantee is
exercising the Put Right;
(ii) the excess, if any, of (x) the Applicable Price per share of
Santa Xx Xxxxxx Common Stock over (y) the Exercise Price paid by the Grantee
for each Option Share as to which the Grantee is exercising the Put Right,
multiplied by the number of such Option Shares; and
(iii) the excess, if any, of (x) the Applicable Price per share of
Santa Xx Xxxxxx Common Stock over (y) the Exercise Price, multiplied by the
number of Unexercised Option Shares as to which the Grantee is exercising the
Put Right.
(b) If the Grantee exercises its rights under this Section 4, the
Company shall, within five Business Days after the Put Date, pay the Put
Consideration to the Grantee in immediately
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available funds, and the Grantee shall surrender to the Company the Option or
portion of the Option and the certificates evidencing the Option Shares of
Santa Xx Xxxxxx Common Stock purchased thereunder. The Grantee shall warrant
to the Company that, immediately prior to the repurchase thereof pursuant to
this Section 4, the Grantee had sole record and Beneficial Ownership of the
Option or such Option Shares, or both, as the case may be, and that the
Option or such shares, or both, as the case may be, were then held free and
clear of all Liens.
(c) If the Option has been exercised, in whole or in part, as to any
Option Shares subject to the Put Right but the Closing thereunder has not
occurred, the payment of the Put Consideration shall, to that extent, render
such exercise null and void.
(d) Notwithstanding any provision to the contrary in this Agreement,
the Grantee may not exercise its rights pursuant to this Section 4 in a
manner that would result in Total Profit of more than the Profit Cap;
PROVIDED, HOWEVER, that nothing in this sentence shall limit the Grantee's
ability to exercise the Option in accordance with its terms.
(e) To the extent that the Company is prohibited under applicable Law
from repurchasing the portion of the Option or the Option Shares pursuant to
this Section 4, the Company shall immediately so notify Grantee and
thereafter deliver, from time to time, to Grantee the portion of the Put
Consideration that it is no longer prohibited from delivering, within five
Business Days after the date on which the Company is no longer so prohibited;
PROVIDED, HOWEVER, that if the Company at any time after the Put Date is
prohibited under applicable Law from delivering to Grantee the full amount of
the Put Consideration, Grantee may rescind the exercise of the Put Right,
whether in whole, in part or to the extent of the prohibition, and, to the
extent rescinded, no part of the amounts, terms or the rights with respect to
the Option or Put Right shall be changed or affected as if such Put Right was
not exercised. The Company shall use its reasonable best efforts to obtain
all required regulatory and legal approvals and to file any required notices
to permit Grantee to exercise its Put Right and shall use its reasonable best
efforts to avoid or cause to be rescinded or rendered inapplicable any
prohibition on the Company's repurchase of the Option or the Option Shares.
5. REGISTRATION RIGHTS.
(a) The Company shall, if requested by the Grantee at any time and from
time to time during the Registration Period, as expeditiously as practicable,
prepare, file and cause to be made effective up to two registration
statements under the Securities Act if such registration is required in order
to permit the offering, sale and delivery of any or all shares of Santa Xx
Xxxxxx Common Stock or other securities that have been acquired by or are
issuable to the Grantee upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by the Grantee,
including, at the sole discretion of the Company, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and the Company shall use all reasonable efforts to qualify such shares or
other securities under any applicable state securities laws. The Company
shall use all reasonable efforts to cause each such registration statement to
become effective, to obtain all consents or waivers of other parties that are
required therefor and to keep such registration statement effective for such
period not in excess of 180 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 the Company hereunder to file a
registration
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statement and to maintain its effectiveness may be suspended for one or more
periods of time not exceeding 60 days in the aggregate if the Board of
Directors of the Company shall have determined in good faith that the filing
of such registration or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect the Company. For purposes of determining whether two requests have
been made under this Section 5, only requests relating to a registration
statement that has become effective under the Securities Act and pursuant to
which the Grantee has disposed of all shares covered thereby in the manner
contemplated therein shallbe counted.
(b) The Registration Expenses shall be for the account of the Company;
PROVIDED, HOWEVER, that the Company shall not be required to pay any
Registration Expenses with respect to such registration if the registration
request is subsequently withdrawn at the request of the Grantee unless the
Grantee agrees to forfeit its right to request one registration.
(c) The Grantee shall provide all information reasonably requested by
the Company for inclusion in any registration statement to be filed
hereunder. If during the Registration Period the Company shall propose to
register under the Securities Act the offering, sale and delivery of Santa Xx
Xxxxxx Common Stock for cash for its own account or for any other stockholder
of the Company pursuant to a firm underwriting, it shall, in addition to the
Company's other obligations under this Section 5, allow the Grantee the right
to participate in such registration provided that the Grantee participates in
the underwriting; PROVIDED, HOWEVER, that, if the managing underwriter of
such offering advises the Company in writing that in its opinion the number
of shares of Santa Xx Xxxxxx Common Stock requested to be included in such
registration exceeds the number that can be sold in such offering, the
Company shall, after fully including therein all securities to be sold by the
Company or, if such registration relates to Santa Xx Xxxxxx Common Stock of
any other stockholder of the Company being registered pursuant to a demand
registration, all securities to be sold by such other stockholder, include
the shares requested to be included therein by Grantee pro rata (based on the
number of shares intended to be included therein) with the shares intended to
be included therein by Persons other than the Company or, in the case of a
demand registration of a Company stockholder, with the shares intended to be
included therein by the Company or other Company stockholders.
(d) In connection with any offering, sale and delivery of Santa Xx
Xxxxxx Common Stock pursuant to a registration statement effected pursuant to
this Section 5, the Company and the Grantee shall provide each other and each
underwriter of the offering with customary representations, warranties and
covenants, including covenants of indemnification and contribution.
6. PROFIT LIMITATION.
(a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit exceed the Profit Cap and, if it otherwise
would exceed such amount, the Grantee, at its sole election, shall either (i)
deliver to the Company for cancellation Option Shares previously purchased by
Grantee, (ii) pay cash or other consideration to the Company, (iii) reduce
the amount of the fee payable to Grantee under Section 8.5 of the Merger
Agreement or (iv) undertake any combination thereof, so that the Grantee's
Total Profit shall not exceed the Profit Cap after taking into account the
foregoing actions.
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(b) Notwithstanding any other provision of this Agreement, this Stock
Option may not be exercised for a number of Option Shares that would, as of
the Notice Date, result in a Notional Total Profit of more than the Profit
Cap, and, if the Notional Total Profit associated with exercise of the Option
otherwise would exceed the Profit Cap, the Grantee, at its sole option, may
increase the Exercise Price for that number of Option Shares set forth in the
Exercise Notice so that the Notional Total Profit shall not exceed the Profit
Cap; PROVIDED, HOWEVER, that nothing in this sentence shall restrict any
exercise of the Option otherwise permitted by this Section 6(b) on any
subsequent date at the Exercise Price set forth in Section 2(b) if such
exercise would not then be restricted under this Section 6(b).
7. LISTING. If the Santa Xx Xxxxxx Common Stock or any other securities
then subject to the Option are then listed on the New York Stock Exchange
("NYSE") or any other national securities exchange, or on the Nasdaq National
Market, the Company, upon the occurrence of an Exercise Event, will promptly
file an application to list on the NYSE or such other securities exchange the
shares of the Santa Xx Xxxxxx Common Stock or other securities then subject
to the Option and will use all reasonable efforts to cause such listing
application to be approved as promptly as practicable.
8. REPLACEMENT OF AGREEMENT. Upon receipt by the Company 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, the Company will execute and deliver a new
Agreement of like tenor and date. Any such new Agreement shall constitute an
additional contractual obligation of the Company, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
9. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in the Merger Agreement or
as otherwise expressly provided herein, each of the parties hereto shall bear
and pay all costs and expenses incurred by it or on its behalf in connection
with the transactions contemplated hereunder, including fees and expenses of
its own financial consultants, investment bankers, accountants and counsel.
(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 (including the
Merger Agreement and the other documents and instruments referred to herein
and therein) (i) 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 (ii) is not intended to confer
upon any Person other than the parties hereto any rights or remedies
hereunder.
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(d) SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. 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 the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
(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 conflicts of law.
(f) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience or reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses or sent by electronic
transmission to the telecopier number specified below:
If to the Company to:
Santa Xx Xxxxxx Corporation
000 Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxx
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: G. Xxxxxxx X'Xxxxx
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If to Grantee to:
Devon Energy Corporation
00 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: J. Xxxxx Xxxxxxx
with a copy to:
McAfee & Xxxx
00xx Xxxxx, Xxx Xxxxxxxxxx Xxxxxx
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxx
(h) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in counterparts, each of which shall be deemed an original and all
of which taken together shall constitute but a single document.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be sold, assigned or
otherwise disposed of or transferred by either of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other party, except that the Grantee may assign this Agreement to a wholly
owned Subsidiary of the Grantee; PROVIDED, HOWEVER, that no such assignment
shall have the effect of releasing the Grantee from its obligations
hereunder. 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.
(j) FURTHER ASSURANCES. If the Grantee exercises the Option or any
portion thereof, the Company and the 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) SPECIFIC PERFORMANCE. The parties hereto hereby acknowledge and
agree that the failure of any party to this Agreement to perform its
agreements and covenants hereunder will cause irreparable injury to the other
party to this Agreement for which damages, even if available, will not be an
adequate remedy. Accordingly, each of the parties hereto hereby consents to
the granting of equitable relief (including specific performance and
injunctive relief) by any court of competent jurisdiction to enforce any
party's obligations hereunder. The 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.
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IN WITNESS WHEREOF, the Company and the Grantee have caused this
Stock Option Agreement to be signed by their respective officers thereunto
duly authorized, all as of the day and year first written above.
SANTA XX XXXXXX CORPORATION
By:
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
DEVON ENERGY CORPORATION
By:
-----------------------------------
Name: J. Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
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ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Stock Option Agreement shall
have the meanings set forth below unless the context shall otherwise require:
"Agreement" shall mean this Stock Option Agreement.
"Applicable Price" means the highest of (i) the highest purchase
price per share paid pursuant to a third party's tender or exchange offer
made for shares of Santa Xx Xxxxxx Common Stock after the date hereof and on
or prior to the Put Date, (ii) the price per share to be paid by any third
Person for shares of Santa Xx Xxxxxx Common Stock pursuant to an agreement
for a Business Combination Transaction entered into on or prior to the Put
Date, and (iii) the Current Market Price. If the consideration to be offered,
paid or received pursuant to either of the foregoing clauses (i) or (ii)
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 jointly selected by the Grantee and the Company, which
determination shall be conclusive for all purposes of this Agreement.
"Authorization" shall mean any and all permits, licenses,
authorizations, orders certificates, registrations or other approvals granted
by any Governmental Authority.
"Beneficial Ownership," "Beneficial Owner" and "Beneficially Own"
shall have the meanings ascribed to them in Rule 13d-3 under the Exchange Act.
"Business Combination Transaction" shall mean (i) a consolidation,
exchange of shares or merger of the Company with any Person, other than the
Grantee or one of its Subsidiaries, and, in the case of a merger, in which
the Company shall not be the continuing or surviving corporation, (ii) a
merger of the Company with a Person, other than the Grantee or one of its
Subsidiaries, in which the Company shall be the continuing or surviving
corporation but the then outstanding shares of Santa Xx Xxxxxx Common Stock
shall be changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property or the shares of
Santa Xx Xxxxxx Common Stock outstanding immediately before such merger shall
after such merger represent less than 50% of the common shares and common
share equivalents of the Company outstanding immediately after the merger or
(iii) a sale, lease or other transfer of all or substantially all the assets
of the Company to any Person, other than the Grantee or one of its
Subsidiaries.
"Business Day" shall mean a day other than Saturday, Sunday or a
federal holiday.
"Closing" shall have the meaning ascribed to such term in Section 2
herein.
"Closing Date" shall have the meaning ascribed to such term in
Section 2 herein.
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"Court" shall mean any court or arbitration tribunal of the United
States, any foreign country or any domestic or foreign state, and any
political subdivision thereof, and shall include the European Court of
Justice.
"Current Market Price" shall mean, as of any date, the average of
the closing prices (or, if such securities should not trade on any trading
day, the average of the bid and asked prices therefor on such day) of the
Santa Xx Xxxxxx Common Stock as reported on the New York Stock Exchange
Composite Tape during the ten consecutive trading days ending on (and
including) the trading day immediately prior to such date or, if the shares
of Santa Xx Xxxxxx Common Stock are not quoted thereon, on The Nasdaq
National Market or, if the shares of Santa Xx Xxxxxx Common Stock are not
quoted thereon, on the principal trading market (as defined in Regulation M
under the Exchange Act) on which such shares are traded as reported by a
recognized source during such ten Business Day period.
"Exercise Event" shall mean (i) any of the events giving rise to
the obligation of the Company to pay the $103,000,000 fee under Section
8.5(a) of the Merger Agreement or (ii) the event giving rise to the
obligation to pay the $56,650,000 fee under Section 8.5(a) of the Merger
Agreement after an event giving rise to the obligation to pay the $46,350,000
fee under Section 8.5(a) of the Merger Agreement has already occurred.
"Exercise Notice" shall have the meaning ascribed to such term in
Section 2(d) herein.
"Exercise Price" shall have the meaning ascribed to such term in
Section 2 herein.
"Governmental Authority" shall mean any governmental agency or
authority (other than a Court) of the United States, any foreign country, or
any domestic or foreign state, and any political subdivision thereof, and
shall include any multinational authority having governmental or
quasi-governmental powers.
"Law" shall mean all laws, statutes and ordinances of the United
States, any state of the United States, any foreign country, any foreign
state and any political subdivision thereof, including all decisions of
Courts having the effect of law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest, adverse
claim, encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing), any conditional sale or other title retention
agreement, any lease in the nature thereof or the filing of or agreement to
give any financing statement under the Laws of any jurisdiction.
"Merger Agreement" shall mean that certain Agreement and Plan of
Merger dated as of the date hereof by and among the Company, Merger Co. and
Grantee.
"Notice Date" shall have the meaning ascribed to such term in
Section 2 herein.
"Notional Total Profit" shall mean, with respect to any number of
Option Shares as to which the Grantee may propose to exercise the Option, the
Total Profit determined as of the date of the Exercise Notice assuming that
the Option were exercised on such date for such number of Option Shares and
assuming such Option Shares, together with all other Option
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Shares held by the Grantee and its Affiliates as of such date, were sold for
cash at the closing market price for the Santa Xx Xxxxxx Common Stock as of
the close of business on the preceding trading day (less customary brokerage
commissions) and including all amounts theretofore received or concurrently
being paid to the Grantee pursuant to clauses (i), (ii) and (iii) of the
definition of Total Profit.
"Option" shall mean the option granted by the Company to Grantee
pursuant to Section 2 herein.
"Option Shares" shall have the meaning ascribed to such term in
Section 2 herein.
"Option Term" shall have the meaning ascribed to such term in
Section 2 herein.
"Order" shall mean any judgment, order or decree of any Court or
Governmental Authority, federal, foreign, state or local, of competent
jurisdiction.
"Profit Cap" shall mean $103,000,000.
"Put Consideration" shall have the meaning ascribed to such term in
Section 4 herein.
"Put Date" shall have the meaning ascribed to such term in Section
4 herein.
"Put Period" shall have the meaning ascribed to such term in
Section 4 herein.
"Put Right" shall have the meaning ascribed to such term in Section
4 herein.
"Registration Expenses" shall mean the expenses associated with the
preparation and filing of any registration statement pursuant to Section 5
herein and any sale covered thereby (including any fees related to blue sky
qualifications and filing fees in respect of the National Association of
Securities Dealers, Inc.), but excluding underwriting discounts or
commissions or brokers' fees in respect to shares to be sold by the Grantee
and the fees and disbursements of the Grantee's counsel.
"Registration Period" shall mean the period of two years following
the first exercise of the Option by the Grantee.
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of Law or of any rule or regulation of any
self-regulatory organization, such as the NYSE.
"Total Profit" shall mean the aggregate (before income taxes) of
the following: (i) all amounts received by the Grantee or concurrently being
paid to the Grantee pursuant to Section 4 for the repurchase of all or part
of the unexercised portion of the Option, (ii) (A) the amounts received by
the Grantee or concurrently being paid to the Grantee pursuant to the sale of
Option Shares (or any other securities into which such Option Shares are
converted or exchanged), including sales made to the Company or pursuant to a
registration statement under the Securities Act or any exemption therefrom,
less (B) the Grantee's purchase price for such
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Option Shares (or, in the case of a cashless exercise, the aggregate Exercise
Price of the Option Shares purchased by cashless exercise) and (iii) all
amounts received by the Grantee from the Company or concurrently being paid
to the Grantee pursuant to Section 8.5 of the Merger Agreement less (iv) any
payments made pursuant to Section 6(a)(ii) herein.
"Unexercised Option Shares" shall mean, from and after the Exercise
Date until the expiration of the Option Term, those Option Shares as to which
the Option remains unexercised from time to time.
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