Exhibit 99.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of August 17, 1997
("Agreement"), is made and entered into by and between GOLDEN STATE
BANCORP INC., a Delaware corporation ("Golden State") and CENFED
FINANCIAL CORPORATION, a Delaware corporation ("CENFED").
WHEREAS, Golden State and CENFED are entering into an Agreement and
Plan of Merger with respect to a business combination of Golden State and
CENFED (the "Merger Agreement") concurrently herewith; and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Golden State has required that CENFED agree, and in order to
induce Golden State to enter into the Merger Agreement, CENFED has
agreed, to grant an option to Golden State to purchase certain shares of
the common stock, par value $.01 per share of CENFED (the "CENFED Common
Stock");
NOW, THEREFORE, in consideration of the foregoing, and the
representations, warranties, covenants and agreements set forth herein
and in the Merger Agreement, and intending to be legally bound, the
parties hereto agree as follows:
1. Grant of Option. CENFED hereby grants to Golden State an
irrevocable option (the "Option") to purchase, subject to the terms
hereof, up to 1,140,784 fully paid and nonassessable shares (the "Option
Shares") of CENFED Common Stock, which Option shall be exercisable by
giving notice and making payment of the Option Price (as defined in
Section 4 hereof) in the manner provided herein. The number of shares of
CENFED Common Stock that may be received upon the exercise of the Option
and the Option Price is subject to adjustment as set forth herein.
2. Exercise of Option.
(a) Golden State may, subject to the provisions of this Section 2
and subject to the conditions of exercise contained in Section 3 hereof,
exercise the Option, in whole or in part, at any time during the period
following the occurrence of an Exercise Event and prior to the Expiration
Date (as defined in Section 3 hereof).
(b) Notwithstanding any provision of this Agreement to the
contrary, in no event shall Golden State have a right to purchase under
the terms of this Agreement more than the number of Option Shares that
has a Spread Value (as defined in Section 11 hereof) of $11,000,000. In
the event that the Spread Value exceeds $11,000,000 at the time Golden
State wishes to exercise the Option, the number of Option Shares that
Golden State is entitled to purchase on the date of the Closing (as
defined herein) shall be reduced to the extent necessary to reduce the
Spread Value following such reduction to an amount equal to or less than
$11,000,000.
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3. Conditions to Exercise; Expiration.
(a) It shall be a condition to Golden State's exercise of the
Option that, at the time of such exercise (i) Golden State is not in
breach of any covenant or obligation set forth herein or in the Merger
Agreement and (ii) there is not in effect any preliminary or permanent
injunction or other order by any court of competent jurisdiction which
prevents or restrains the issuance and delivery of the Option Shares.
(b) The right to exercise any part of the Option not previously
exercised shall expire, terminate and be of no further force or effect
upon the earliest to occur (the date of such earliest occurring event
being referred to herein as the "Expiration Date") of (i) the Effective
Time of the Merger, (ii) the date the Merger Agreement is terminated
pursuant to Sections 7.1(a) or (e) thereof; (iii) the date the Merger
Agreement is terminated by CENFED or Golden State pursuant to Sections
7.1(b), (c) or (d) thereof, if such date is prior to the occurrence of an
Exercise Event or Preliminary Acquisition Transaction; or (iv) 18 months
following the earliest to occur of (A) the date of any termination of the
Merger Agreement other than as described in clauses (ii) and (iii) of
this sentence or (B) the date of the first occurrence of an Exercise
Event.
4. Manner of Exercise.
(a) In the event that Golden State wishes to exercise the Option,
in whole or in part, Golden State shall send a written notice (the date
of such notice being herein referred to as the "Notice Date") to CENFED
specifying the number of Option Shares to be purchased and a place and
date not earlier than three nor later than ten business days following
any such Notice Date for the closing of such purchase (the "Closing");
provided that, if prior notification to or approval of the Office of
Thrift Supervision (the "OTS") or any other regulatory agency is required
in connection with such purchase, each party hereto shall cooperate with
the other party hereto in the filing of the required notice or
application for approval and shall expeditiously process the same and use
its best efforts to obtain any required approval, and the period of time
that otherwise would run pursuant to this sentence shall run instead from
the date on which any required notification periods have expired or been
terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed.
(b) At any Closing, Golden State shall make payment to CENFED for
the Option Shares so purchased at such date by delivery of immediately
available funds to CENFED equal to $34.00 per Option Share (the "Option
Price"). If the Option is exercised in part only, Golden State shall
also deliver all originally executed copies of this Agreement to CENFED
at the Closing in exchange for a new agreement duly authorized and
executed by CENFED identical to this Agreement evidencing the right to
purchase the remaining balance of the Option Shares.
(c) Upon payment of the Option Price, CENFED shall immediately
deliver to Golden State a certificate or certificates representing such
Option Shares registered in the name of Golden State or its assignee or
designee.
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(d) Certificates for Option Shares delivered at a Closing hereunder
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 certain provisions of an agreement between the registered
holder hereof and the issuer and to resale restrictions arising
under the Securities Act of 1933, as amended. A copy of such
agreement is on file at the principal office of the issuer and will
be provided to the holder hereof without charge upon receipt by
Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "Securities
Act"), in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if Golden State shall have
delivered to CENFED a letter from the staff of the Securities and
Exchange Commission ("SEC"), or an opinion of counsel, in form and
substance reasonably satisfactory to CENFED, to the effect that such
legend is not required for purposes of the Securities Act; and (ii) the
reference to the provisions of this Agreement in the above legend shall
be removed by delivery of substitute certificate(s) without such
reference if the shares have been sold or transferred in compliance with
the provisions of this Agreement and under circumstances that do not
require the retention of such reference. In addition, such certificates
shall bear any other legend that may be required by law.
5. Registration of Shares.
(a) In the event that the Option has become exercisable in
accordance with Section 2 hereof, then, as promptly as practicable upon
Golden State's request, but, in any event, within six months from the
date of Golden State's request, CENFED agrees to prepare and file a
registration statement ("Registration Event") under the Securities Act,
and any applicable state securities laws, with respect to any proposed
disposition by Golden State of any or all of the Option Shares and to use
its best efforts to cause such registration statement to become effective
as expeditiously as possible and to keep such registration effective for
a period of not less than 180 days, unless, in the written opinion of
counsel to CENFED, addressed to Golden State and reasonably satisfactory
in form and substance to Golden State and its counsel, registration is
not required for such proposed distribution of the Option Shares.
Notwithstanding the foregoing, CENFED shall have the right to delay (the
"Delay Right") a Registration Event for a period of up to sixty days in
the event it receives a request from Golden State to effect a
Registration Event if CENFED (i) is involved in a material transaction,
(ii) determines, in the good faith exercise of its reasonable business
judgment, that such registration and offering could adversely affect or
interfere with bona fide material financing plans of CENFED or would
require disclosure of information the premature disclosure of which could
materially adversely affect CENFED or any transaction under active
consideration by CENFED, or (iii) reasonably requires such delay in order
to prepare audited financial statements required to be included in such
registration statement. CENFED may exercise its Delay Right not more
than once in any twelve-month period. All fees, expenses and charges
incurred by CENFED in connection with the registration of the Option
Shares pursuant to this Section 5 shall be borne and paid by CENFED.
CENFED shall indemnify and hold harmless Golden State, its affiliates and
its officers, directors, attorneys and agents from and against any and
all losses, claims, damages,
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liabilities and expenses (including, without limitation, all out-of-
pocket expenses, investigation expenses, expenses incurred with respect
to any judgment and fees, charges and disbursements of counsel and
accountants) arising out of or based upon any statements contained in, or
omissions or alleged omissions from, each registration statement (and
related prospectus) required to be filed pursuant to this Section 5,
other than any losses, claims, damages, liabilities and expenses arising
out of or based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or
prospectus in reliance upon information furnished to CENFED by Golden
State.
(b) Golden State shall be limited to the benefit of two effective
demand registrations as described in Section 5(a), which demand
registrations may only be requested during the three years following the
date of the first Exercise Event, but shall have an unlimited number of
so-called "piggyback" registration rights. CENFED agrees, if requested
by Golden State, to enter into a Registration Rights agreement with
Golden State consistent with the terms and conditions hereof and
containing customary terms, including appropriate indemnities, which
shall only allow underwriters the ability to cut back the number of
shares Golden State seeks to have registered on pro rata basis.
6. Representations and Warranties of CENFED. CENFED hereby
represents and warrants to, and agrees with, Golden State as follows:
(a) Authority Relative to this Agreement. CENFED has full
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of CENFED and no other
corporate proceedings on the part of CENFED are necessary to
authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and
delivered by CENFED and, assuming that this Agreement has been duly
and validly authorized, executed and delivered by Golden State, this
Agreement constitutes a valid and binding agreement of CENFED,
enforceable against CENFED in accordance with its terms.
(b) Option Shares. CENFED has taken all necessary corporate
action to authorize and reserve and to permit it to issue, and at
all times from the date hereof through the Expiration Date will have
reserved for issuance upon exercise of the Option, 1,140,784 shares
of CENFED Common Stock, each of which, upon delivery pursuant
hereto, shall be duly authorized, validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all claims,
liens, encumbrances and security interests and not be subject to any
preemptive rights. CENFED will take all necessary corporate action
to authorize and reserve for issuance upon exercise of the Option
such additional shares as may be required pursuant to Section 9
hereof. CENFED will not take any action which could reasonably have
the effect of preventing or disabling CENFED from (i) delivery of
the Option Shares to Golden State upon exercise of the Option or
(ii) otherwise performing its obligations under this Agreement.
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(c) Conflicting Instruments; Consents. Neither the execution
and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate or result in any
violation of or be in conflict with or constitute a default under
any term of the certificate of incorporation or by-laws of CENFED,
or of any material agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to CENFED. No
consent or approval by any governmental authority, other than
compliance with applicable federal and state securities and banking
laws, including the regulations of the OTS, is required of CENFED in
connection with the execution and delivery by CENFED of this
Agreement or the consummation by CENFED of the transactions
contemplated hereby.
(d) Notice. CENFED shall give notice to Golden State
promptly, but in any event within two business days, of CENFED's
first obtaining knowledge of any Exercise Event or Repurchase Event.
7. Representations and Warranties of Golden State. Golden State
hereby represents and warrants to CENFED as follows:
(a) Golden State has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of
Directors of Golden State and no other corporate proceedings on the
part of Golden State are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by Golden State and,
assuming this Agreement has been duly and validly authorized,
executed and delivered by CENFED, this Agreement constitutes a valid
and binding agreement of Golden State, enforceable against Golden
State in accordance with its terms.
(b) Golden State will acquire the Option Shares issued upon
exercise of the Option for its own account, without a view toward
the distribution thereof, and will not sell such Option Shares
unless such sale is registered as required by the Securities Act or
unless an exemption from such registration requirement is available.
8. Notification of Record Date; Postponement of Meeting. At any
time during the period that this Option may become exercisable by Golden
State, CENFED shall give Golden State thirty business days' (or such
shorter time as is possible under the circumstances) prior written notice
of any record date for determining the holders of CENFED Common Stock of
record and entitled to vote on any matter, to receive any dividend or
distribution, or to receive any other benefit or right, or for any other
purpose that a record date is taken or declared with respect to the
CENFED Common Stock. In the event that Golden State, in accordance with
this Agreement, elects to exercise the Option granted hereunder by
delivery of the notice required pursuant to Section 4 after the record
date set by CENFED for any such shareholders' meeting, then CENFED shall,
upon request by Golden State, cancel the scheduled meeting and its
related record date and reschedule it
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for a later date; provided, however, that the record date for such
rescheduled meeting shall be a date that is not fewer than ten nor more
than thirty business days after the cancellation of the originally
scheduled shareholders' meeting.
9. Adjustment upon Changes in Capitalization, Etc.
(a) In the event of any dividend, stock split, split-up,
recapitalization, reclassification, combination, exchange of shares or
similar transaction or event with respect to the CENFED Common Stock, the
type and number of shares or securities subject to the Option, and the
Option Price therefor, shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction so
that Golden State shall receive, upon exercise of the Option, the number
and class of shares or other securities or property that Golden State
would have received in respect of CENFED Common Stock if the Option had
been exercised immediately prior to such event, or the record date
therefor, as applicable. If any shares of CENFED Common Stock are issued
after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 9(a)), the number of
shares of CENFED Common Stock subject to the Option shall be adjusted so
that, after such issuance, such number, together with any shares of
CENFED Common Stock previously issued to Golden State pursuant hereto,
equals 19.9% of the number of shares of CENFED Common Stock then issued
and outstanding, without giving effect to any shares subject to or issued
pursuant to this Option.
(b) In the event that CENFED shall, prior to the Expiration Date,
enter in an agreement (i) to consolidate with or merge into any person,
other than Golden State or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii)
to permit any person, other than Golden State or one of its Subsidiaries,
to merge into CENFED and CENFED shall be the continuing or surviving
corporation, but, in connection with such merger, the then outstanding
shares of CENFED Common Stock shall be changed into or exchanged for
stock or other securities of CENFED or any other person or cash or any
other property and the outstanding shares of CENFED Common Stock
immediately prior to such merger shall after such merger represent less
than 50% of the outstanding shares and share equivalents of the
continuing or surviving corporation, or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person, other than
Golden State or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or
exchanged for, an option (the "Substitute Option"), at the election of
Golden State, of either (x) the Acquiring Corporation (as defined below),
(y) any person that controls the Acquiring Corporation, or (z) in the
case of a merger described in clause (ii), CENFED (in each case, such
person being referred to as the "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, for legal or
regulatory reasons, be the same as the Option, such terms shall be as
similar as possible and in no event less advantageous to Golden State.
The Substitute Option Issuer shall also enter into an agreement with the
then-holder or holders of the Substitute Option in substantially the same
form as this Agreement, which shall be applicable to the
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Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as hereinafter defined) as is
equal to the Assigned Value (as hereinafter defined) multiplied by the
number of shares of the CENFED Common Stock for which the Option was
theretofore exercisable, divided by the Average Price (as hereinafter
defined). The exercise price of the Substitute Option per share of the
Substitute Common Stock (the "Substitute Option Price") shall then be
equal to the Option Price multiplied by a fraction in which the numerator
is the number of shares of the CENFED Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares
for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing or
surviving corporation of a consolidation or merger with CENFED (if
other than CENFED), (y) CENFED in a merger in which CENFED is the
continuing or surviving corporation, and (z) the transferee of all
or any substantial part of CENFED's assets (or the assets of its
Subsidiaries).
(ii) "Assigned Value" shall mean the highest of (x) the price
per share of the CENFED Common Stock at which a Tender Offer or
Exchange Offer therefor has been made by any person (other than
Golden State or its Subsidiaries or affiliates), (y) the price per
share of the CENFED Common Stock to be paid by any person (other
than Golden State or its Subsidiaries or affiliates) pursuant to an
agreement with CENFED, and (z) the highest closing sale price per
share of CENFED Common Stock quoted on the Nasdaq National Market
(or if CENFED Common Stock is not quoted on the Nasdaq National
Market, the highest bid price per share on any day as quoted on the
principal trading market or securities exchange on which such shares
are traded as reported by a recognized source chosen by Golden
State) within the six-month period immediately preceding any such
agreement; provided, that in the event of a sale of less than all of
CENFED's assets, the Assigned Value shall be the sum of the price
paid in such sale for such assets and the current market value of
the remaining assets of CENFED as determined in good faith by a
nationally recognized investment banking firm selected by Golden
State and reasonably acceptable to CENFED, divided by the number of
shares of the CENFED Common Stock outstanding at the time of such
sale. In the event that an Exchange Offer is made for the CENFED
Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of
the securities or other property issuable or deliverable in exchange
for the CENFED Common Stock shall be determined in good faith by a
nationally recognized investment banking firm mutually selected by
Golden State and CENFED (or, if applicable, Acquiring Corporation),
provided, that if a mutual selection cannot be made as to such
investment banking firm, it shall be selected by Golden State.
(iii) "Average Price" shall mean the average closing price
of a share of the Substitute Common Stock for the one-year period
immediately preceding the consolidation,
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merger or sale in question, but in no event higher than the closing
price of the shares of the Substitute Common Stock on the day
preceding such consolidation, merger or sale, provided, that if
CENFED is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock issued by
CENFED, the person merging into CENFED or by any company which
controls or is controlled by such merging person, as Golden State
may elect.
(iv) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the
Substitute Option.
(f) In no event pursuant to any of the foregoing paragraphs shall
the Substitute Option be exercisable for more than 19.9% of the aggregate
of the shares of the Substitute Common Stock outstanding prior to
exercise of the Substitute Option.
(g) CENFED shall not enter into any transaction described in
subsection (b) of this Section 9 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of CENFED hereunder and take all other actions that may be
necessary so that the provisions of this Section 9 are given full force
and effect (including, without limitation, any action that may be
necessary so that the shares of Substitute Common Stock are in no
material way distinguishable from or have less economic value than other
shares of common stock issued by the Substitute Option Issuer).
10. Repurchase at the Option of Golden State.
(a) At the written request of Golden State at any time commencing
upon the first occurrence of a Repurchase Event (as defined in Section
10(d)), CENFED shall repurchase the Option from Golden State and, to the
extent permitted by applicable law, all shares of CENFED Common Stock
purchased by Golden State pursuant hereto with respect to which Golden
State then has Beneficial Ownership. The date on which Golden State
exercises its rights under this Section 10 is referred to as the "Request
Date", and the Request Date must be no later than 12 months after the
first occurrence of a Repurchase Event. Such repurchase shall be at an
aggregate price (the "Repurchase Consideration") equal to the sum of:
(i) the aggregate Option Price paid by Golden State for any
shares of CENFED Common Stock acquired pursuant to the Option with
respect to which Golden State then has Beneficial Ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of CENFED Common Stock over (y) the
Option Price (subject to adjustment pursuant to Section 9),
multiplied by the number of shares of CENFED Common Stock with
respect to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Option Price (subject to adjustment pursuant to Section 9) paid (or,
in the case of Option Shares with respect to
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which the Option has been exercised but the Closing has not
occurred, payable) by Golden State for each share of CENFED Common
Stock with respect to which the Option has been exercised and with
respect to which Golden State then has Beneficial Ownership,
multiplied by the number of such shares; provided, that the amount
calculated pursuant to clause (ii) and (iii) of this Section 10(a)
shall not exceed $11,000,000.
(b) If Golden State exercises its rights under this Section 10,
CENFED shall, within ten business days after the Request Date, pay the
Repurchase Consideration to Golden State in immediately available funds,
and contemporaneously with such payment Golden State shall surrender to
CENFED the Option and the certificates evidencing the shares of CENFED
Common Stock purchased thereunder with respect to which Golden State then
has Beneficial Ownership, and Golden State shall represent and warrant
that it has sole record and Beneficial Ownership of such shares, that it
has not granted any rights to purchase or otherwise acquire such shares
to any person, and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Notwithstanding
the foregoing, to the extent that prior notification to or approval of
the OTS or any other regulatory authority is required in connection with
the payment of all or any portion of the Repurchase Consideration, Golden
State shall have the ongoing option to revoke its request for repurchase
pursuant to this Section 10, in whole or in part, or to require that
CENFED deliver from time to time that portion of the Repurchase
Consideration that it is not then so prohibited from paying and promptly
file the required notice or application for approval with the respect to
the balance and expeditiously process the same (and each party shall
cooperate with the other in the filing of any such notice or application
and the obtaining of any such approval). If the OTS or any other
regulatory authority disapproves of any part of CENFED's proposed
repurchase pursuant to this Section 10, CENFED shall promptly give notice
of such fact to Golden State. If the OTS or such other regulatory agency
prohibits the repurchase in part but not in whole, then Golden State
shall have the right (i) to revoke the repurchase request or (ii) to the
extent permitted by the OTS or such other regulatory agency, determine
whether the repurchase should apply to the Option and/or Option Shares
and to what extent to each, and Golden State shall thereupon have the
right to exercise the Option as to the number of Option Shares for which
the Option was exercisable at the Request Date less the sum of the number
of shares covered by the Option in respect of which payment has been made
pursuant to Section 10(a)(ii) and the number of shares covered by the
portion of the Option (if any) that has previously been repurchased.
Golden State shall notify CENFED of its determination under the preceding
sentence within five business days of receipt of notice of disapproval of
the repurchase.
Notwithstanding anything herein to the contrary, all of Golden
State's rights with respect to any unexercised Options under this Section
10 shall terminate on the Expiration Date.
(c) For purposes of this Agreement, the "Applicable Price" means
the highest of (i) the highest price per share of CENFED Common Stock
paid for any such share by the person or groups described in Section
10(d)(i), (ii) the price per share of CENFED Common Stock received by
holders of CENFED Common Stock in connection with any merger or other
business combination transaction described in Section 9(b)(i), (ii) or
(iii), or (iii) the highest closing sales price per share of CENFED
Common Stock quoted on the Nasdaq National Market (or if CENFED Common
Stock
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is not quoted on the Nasdaq National Market, the highest bid price per
share as quoted on the principal trading market or securities exchange on
which such shares are traded as reported by a recognized source chosen by
Golden State) during the 60 business days preceding the Request Date;
provided, however, that in the event of a sale of less than all of
CENFED's assets, the Applicable Price shall be the sum of the price paid
in such sale for such assets and the current market value of the
remaining assets of CENFED as determined in good faith by an independent
nationally recognized investment banking firm selected by Golden State
and reasonably acceptable to CENFED (which determination shall be
conclusive for all purposes of this Agreement), divided by the number of
shares of the CENFED Common Stock outstanding at the time of such sale.
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 selected by
Golden State and reasonably acceptable to CENFED, which determination
shall be conclusive for all purposes of this Agreement.
(d) As used herein, a "Repurchase Event" shall be deemed to occur
if (i) any person (other than Golden State or any Subsidiary or affiliate
of Golden State) shall have acquired Beneficial Ownership, or the right
to acquire Beneficial Ownership, or any "group" (as such term is defined
under the Exchange Act) shall have been formed which Beneficially Owns or
has the right to acquire Beneficial Ownership, of 50% or more of the then
outstanding shares of CENFED Common Stock, (ii) any of the transactions
described in Section 9(b)(i), 9(b)(ii) or 9(b)(iii) shall have been
consummated, or (iii) following an Exercise Event, Golden State receives
official notice that an approval of the OTS or any other regulatory
authority required for the exercise of the Option and purchase of the
Option Shares will not be issued or granted.
11. Definitional Matters.
(a) Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Merger Agreement.
(b) The following definitions shall have the meanings set forth
herein:
"Acquisition Transaction" shall mean:
(i) a merger, consolidation or similar transaction involving
CENFED or any of its Subsidiaries (other than internal transactions
solely involving CENFED and any of its wholly owned Subsidiaries);
(ii) except as expressly permitted by the Merger Agreement, the
disposition, by sale, lease, exchange or otherwise, of assets or
deposits of CENFED or any of its Subsidiaries representing all or a
substantial portion of the consolidated assets or deposits of CENFED
and its Subsidiaries not in the ordinary course of business;
(iii) the issuance, sale or other disposition of (including
by way of merger, consolidation, share exchange or any similar
transaction) securities representing 20% or
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more of the voting power of CENFED or any of its Subsidiaries;
(iv) the acquisition by any person or group of persons (other
than by Golden State or any of its Subsidiaries or affiliates) of
Beneficial Ownership of, or the right to acquire beneficial
ownership of, 20% or more of the then-outstanding shares of CENFED
Common Stock; or
(v) any substantially similar transaction.
"Beneficial Ownership" or "Beneficially Owns" shall be defined by,
or have the meaning set forth in Rule 13d-3 promulgated under the
Exchange Act.
"Exercise Event" means the (i) occurrence of an Acquisition
Transaction; (ii) the public authorization, recommendation or endorsement
by CENFED of an Acquisition Transaction; (iii) a public announcement by
CENFED of an intention to authorize, recommend or announce an Acquisition
Transaction described in paragraphs (i), (ii), (iii) or (v) definition of
Acquisition Transaction; or (iv) the entering into by CENFED of any
agreement with any person or group of persons to effect an Acquisition
Transaction.
"Person" shall have the meaning specified in Sections 3(a)(9) and
13(d)(3) of the Exchange Act.
"Preliminary Acquisition Transaction" shall mean:
(i) the commencement (as such term is defined in Rule 14d-2
promulgated under the Exchange, Act) by any person (other than
Golden State or any Subsidiary or affiliate of Golden State) of, or
the filing by any person (other than Golden State or any Subsidiary
or affiliate of Golden State) of a registration statement under the
Securities Act with respect to, a tender offer or exchange offer to
purchase shares of CENFED Common Stock such that, upon consummation
of such offer, such person would own or control 20% or more of the
then-outstanding shares of CENFED Common Stock (such an offer being
referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
(ii) the shareholders of CENFED shall have voted and failed to
approve the Merger and the Merger Agreement at any meeting of such
shareholders which has been held for that, purpose, including any
adjournment or postponement thereof, the failure of such a
shareholder meeting to occur prior to termination of the Merger
Agreement, or the withdrawal or modification of the recommendation
of CENFED's Board of Directors that the shareholders of CENFED
approve the Merger and Merger Agreement, in each case after there
shall have been a public announcement that any person (other than
Golden State or any Subsidiary or affiliate of Golden State) shall
have (A) made, or disclosed an intention to make, a proposal to
engage in an Acquisition Transaction, (B) commenced a Tender Offer
or filed a registration statement under the Securities Act with
respect to an Exchange Offer, or (C) filed an application (or given
a notice), whether in draft or final form, with the OTS
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or under any federal or state thrift institution or banking law or
regulation, for approval to engage in an Acquisition Transaction.
"Spread Value" shall mean the difference between (i) the product of
(A) the sum of the number of Option Shares that Golden State intends to
purchase at a Closing pursuant to the exercise of the Option and the
number of Option Shares that Golden State has previously purchased
pursuant to the prior exercise of the Option, and (B) the closing price
of CENFED Common Stock as quoted on the Nasdaq National Market on the
last trading day immediately preceding the Closing Date, and (ii) the
product of (A) the total number of Option Shares that Golden State
intends to purchase on the day of the Closing pursuant to the exercise of
the Option and the number of Option Shares that Golden State has
previously purchased pursuant to the prior exercise of the Option and (B)
the applicable Option Price of such Option Shares.
12. Consents. Each of the parties hereto will use its best efforts
to consummate and make effective the transactions contemplated by this
Agreement.
13. Further Assurances. CENFED and Golden State will execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the
transactions contemplated hereby.
14. Entire Agreement; Assignment. This Agreement and the Merger
Agreement (including the separate agreements referred to therein) (a)
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect
to the subject matter hereof, (b) shall not be amended, altered or
modified in any manner whatsoever, except by a written instrument
executed by the parties hereto and (c) shall not, without the express
written consent of the other party hereto, be assigned by operation of
law or otherwise; provided, however, that Golden State may assign its
rights and obligations to any wholly owned Subsidiary of Golden State,
but such assignment shall not relieve Golden State of its obligations
hereunder.
15. Validity. The invalidity or unenforceability of any provision
of this Agreement or of any provision of the Merger Agreement shall not
affect the validity or enforceability of any other provisions of this
Agreement, each of which shall remain in full force and effect.
16. Notices. Any notices or other communications required or
permitted hereunder shall be in writing and shall be deemed duly given
upon (a) transmitter's confirmation of a receipt of a facsimile
transmission, (b) confirmed delivery by a standard overnight carrier or
(c) the expiration of five business days after the day mailed, when
mailed by certified or registered mail, postage prepaid, addressed as
follows (or at such other address or addresses as the parties hereto
shall specify by like notice):
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If to CENFED:
CENFED Financial Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: D. Xxx Xxxxxx
President and
Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Golden State:
Golden State Bancorp Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Vice Chairman
Facsimile: (000) 000-0000
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
17. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware without
regard to the conflict of laws provisions and principles thereof.
18. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of, this
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Agreement.
19. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other
person or any rights or remedies of any nature whatsoever under or by
reason of this Agreement.
20. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
21. Expenses. Except as set forth in Section 5 hereof, all costs
and expenses incurred in connection with the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized, all
as of the day and year first written above.
CENFED Financial Corporation GOLDEN STATE BANCORP INC.
By: /s/ D. Xxx Xxxxxx By: /s/ Xxxxxxx X. Xxxx
D. Xxx Xxxxxx Xxxxxxx X. Xxxx
President and Chief Executive Officer Vice Chairman
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