Exhibit 2.k.(iii)
PURCHASE AGREEMENT
THIS AGREEMENT is made as of this _____ day of September, 1997
between Banc One Capital Holdings Corporation, an Ohio corporation ("Seller"),
and Mandatory Common Exchange Trust (such trust and the trustees thereof acting
in their capacity as such being referred to herein as the "Trust" or
"Purchaser").
WHEREAS, Seller owns shares of voting common stock, $.01 par
value per share (the "Voting Common Stock"), of FIRSTPLUS Financial Group, Inc.,
a Nevada corporation (the "Company")and nonvoting common stock, $.01 par value
per share ("Nonvoting Common"), of the Company;
WHEREAS, Purchaser has filed with the Securities and Exchange
Commission a registration statement contemplating the offering of up to
_________ Trust Issued Mandatory Exchange Securities (the "TIMES"), the terms of
which contemplate delivery by Purchaser to the holders thereof of a number of
shares (the "Shares") of Voting Common Stock (or, at the option of the Seller,
the equivalent in cash equal to the Reference Market Price), on [DATE] (the
"Exchange Date");
WHEREAS, Seller has agreed, pursuant to the Collateral
Agreement (the "Collateral Agreement") dated as of September , 1997, among
Purchaser, Seller and The Bank of New York, as collateral agent (the "Collateral
Agent"), to grant Purchaser a security interest in a specified amount of U.S.
Treasury securities and/or shares of Voting Common Stock and/or Nonvoting Common
and in certain other circumstances certain other collateral to secure the
obligations of the Seller hereunder;
WHEREAS, Purchaser has agreed, pursuant to an underwriting
agreement, dated September ____, 1997 (the "Underwriting Agreement"), among
Purchaser, Seller, Bear, Xxxxxxx & Co. Inc. and Salomon Brothers Inc, on behalf
of the other several underwriters named therein (the "Underwriters"), to issue
and sell to the Underwriters an aggregate of _________ TIMES ("the Initial
TIMES") and, at the Underwriters' option, all or any part of _________
additional TIMES (the "Additional TIMES") to cover overallotments;
NOW, THEREFORE, in consideration of their mutual covenants
herein contained, the parties hereto, intending to be legally bound, hereby
mutually covenant and agree as follows:
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"Acceleration Amount" has the meaning provided in Article VII.
"Acceleration Amount Notice" has the meaning provided in
Article VII.
"Acceleration Date" has the meaning provided in Article VII.
"Acceleration Value" has the meaning provided in Article VII.
"Additional Purchase Price" has the meaning provided in
Section 1.2(b).
"Additional Share Base Amount" means the number of Additional
TIMES that the Underwriters shall elect to purchase under the Underwriting
Agreement.
"Additional Shares" has the meaning provided in Section
1.1(b).
"Additional STRIPS" means the U.S. Treasury obligations
purchased by Purchaser for settlement on the Option Closing Date.
"Administrator" means the Bank of New York, administrator for
Purchaser under the Administration Agreement dated as of September , 1997, or
any successor thereto.
"Aggregate Acceleration Value" has the meaning provided in
Article VII.
"Business Day" means: (i) as used in Article VI, any day on
which commercial banks are open for business in New York City and (ii) as used
in Article VII, any day on which commercial banks are open for business in New
York City and the New York Stock Exchange is not closed.
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"Calculation Period" means any period of Trading Days for
which an average security price must be determined pursuant to this Agreement.
"Cash Settlement Alternative" has the meaning provided in
Section 1.3(d).
"Closing Price" means, for any security on any Trading Day,
(i) the last reported executed trade price (regular way) of such security on the
principal trading market for such security on such date; (ii) if no regular way
executed trade price for such security is reported on the principal trading
market for such security on such date, the average of the closing bid and
offered prices for such security as reported by the principal trading market for
such security on such date; (iii) if no regular way executed traded price or
closing bid and offered prices for such security are reported on the principal
trading market for such security on such date, the Closing Price (as determined
in accordance with clauses (i) or (ii)) for the next succeeding Trading Day (if
any) within the relevant Calculation Period on which the Closing Price may be so
determined; or (iv) if such security is no longer listed or admitted to trading
on any exchange or in the over-the-counter market, the average of the closing
bid and offered prices for such day as furnished by a member firm of the most
recent principal trading market for such security. The Closing Price shall be
subject to adjustment in certain events as provided in Section 6.1(e).
"Contract Shares" has the meaning provided in Section 1.1(b).
"Custodian" means The Bank of New York, custodian for
Purchaser under the Custodian Agreement dated as of September ___, 1997, or any
successor thereto.
"Dilution Adjustment" means any fraction or number by which
the Exchange Rate shall be multiplied pursuant to Section 6.1(a), (b), (c) or
(d).
"Event of Default" has the meaning provided in Article VII.
"Excess Purchase Payment" has the meaning provided in Section
6.1(d).
"Exchange Date" has the meaning provided in Section 1.3(c).
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"Exchange Rate" has the meaning provided in Section 1.1(c).
"Firm Share Base Amount" has the meaning provided in Section
1.1(a).
"Firm Shares" has the meaning provided in Section 1.1(a).
"Firm Payment Date" has the meaning provided in Section
1.3(a).
"Firm Purchase Price" has the meaning provided in Section
1.2(a).
"Floor Price" has the meaning provided in Section 1.1(c).
"Independent Dealer" has the meaning provided in Article VII.
"Initial Value" has the meaning provided in Section 1.1(c).
"Marketable Securities" has the meaning provided in Section
6.2.
"Option Closing Date" has the meaning provided in Article IV
of the Underwriting Agreement.
"Permitted Dividend" has the meaning provided in Section
6.1(d).
"Purchase Price" means the sum of the Firm Purchase Price and
the Additional Purchase Price (if any).
"Reference Market Price" means the average Closing Price per
share of the Common Stock for a Calculation Period of 20 Trading Days
immediately prior to (but not including) the Exchange Date, provided that if no
Closing Price may be determined for one or more (but not all) of such Trading
Days, such Trading Day shall be disregarded in the calculation of the Reference
Market Price (but no additional Trading Day shall be added to the Calculation
Period). If no Closing Price may be determined for any of such Trading Days, the
Reference Market Price shall be the Closing Price per share of the Common Stock
for the most recent
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Trading Day prior to such 20 Trading Days for which a Closing Price for the
Common Stock may be determined.
"Reorganization Event" has the meaning provided in Section
6.2.
"Then-Reference Market Price" of the Common Stock, for the
purpose of applying any adjustment pursuant to Section 6.1, means the average
Closing Price per share of the Common Stock for the Calculation Period of five
Trading Days immediately prior to the time such adjustment is effected (or, in
the case of an adjustment effected on the Business Day next following a record
date as described in Section 6.1(f)(i), immediately prior to the earlier of the
time such adjustment is effected and the related ex-date); provided that if no
Closing Price for the Common Stock may be determined for one or more (but not
all) of such Trading Days, such Trading Day shall be disregarded in the
calculation of the Then-Reference Market Price (but no additional Trading Days
shall be added to the Calculation Period). If no Closing Price for the Common
Stock may be determined for any of such Trading Days, the Then-Reference Market
Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such five Trading Days for which a Closing Price for the
Common Stock may be determined. The "ex-date" with respect to any dividend,
distribution or issuance shall mean the first date on which the shares of Common
Stock trade regular way on their principal market without the right to receive
such dividend, distribution or issuance.
"Threshold Appreciation Price" has the meaning provided in
Section 1.1(c).
"Trading Day" means, with respect to any security, a day on
which the principal trading market for such security is open for trading or
quotation.
"Transaction Value" has the meaning provided in Section 6.2.
"Trust Agreement" means the Declaration of Trust of the
Mandatory Common Exchange Trust dated as of September , 1997.
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I.
SALE AND PURCHASE
1.1 Sale and Purchase. (a) Firm Shares. Upon the terms and
subject to the conditions of this Agreement, Seller agrees to sell to Purchaser,
and Purchaser agrees to purchase and acquire from Seller, the number of Shares
(the "Firm Shares") equal to the product of _________ (the "Firm Share Base
Amount") and the Exchange Rate.
(b) Additional Shares. Upon the terms and
subject to the conditions of this Agreement, Seller agrees to sell to Purchaser,
and Purchaser shall have a right to purchase, a number of additional Shares (the
"Additional Shares") equal to the product of the Exchange Rate and the
Additional Share Base Amount. If the Underwriters exercise their option to
purchase Additional TIMES pursuant to the Underwriting Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Shares, which notice shall specify the Additional Share Base Amount and the date
on which Purchaser shall deliver the purchase price for the Additional Shares,
which shall be the Option Closing Date. The Firm Shares and the Additional
Shares (if any) are collectively referred to herein as the "Contract Shares".
(c) Exchange Rate. The "Exchange Rate" shall be
determined in accordance with the following formula, subject to adjustment as a
result of certain events relating to the Common Stock or the Shares as provided
in Article VI: (i) if the Reference Market Price is less than $_____ (the
"Threshold Appreciation Price") but equal to or greater than $_____ (the "Floor
Price"), a number or fractional number (rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to $_____ (the "Initial Value") divided by the Reference
Market Price, (ii) if the Reference Market Price is equal to or greater than the
Threshold Appreciation Price, 0.x and (iii) if the Reference Market Price is
less than the Floor Price, 1.xx.
1.2 Purchase Price. (a) Firm Purchase Price. The purchase
price for the Firm Shares (the "Firm Purchase Price") shall be $_________ in
cash.
(b) Additional Purchase Price. The purchase price for
the Additional Shares (the "Additional Purchase Price") shall be the difference
between: (i) the aggregate proceeds to
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Purchaser from the sale of the Additional TIMES; and (ii) the aggregate cost to
Purchaser, as notified by Purchaser to Seller on the Option Closing Date, of the
Additional STRIPS.
1.3 Payment for and Delivery of Contract Shares. (a) Firm
Payment Date. Upon the terms and subject to the conditions of this Agreement,
Purchaser shall deliver to Seller the Firm Purchase Price on September , 1997
(the "Firm Payment Date") at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall
be agreed upon by Purchaser and Seller, paid by certified or official bank check
or checks duly endorsed to, or payable to the order of, Seller, or by wire
transfer to an account designated by Seller, in New York Clearing House Funds.
(b) Option Closing Date. Upon the terms and
subject to the conditions of this Agreement, Purchaser shall deliver to Seller
the Additional Purchase Price on the Option Closing Date at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by Purchaser and Seller,
paid by certified or official bank check or checks duly endorsed to, or payable
to the order of, Seller, or wire transfer to an account designated by Seller, in
New York Clearing House Funds.
(c) Delivery of Contract Shares. On ,
200 (the "Exchange Date"), Seller agrees to deliver the Contract Shares to
Purchaser. Delivery shall be effected by delivery by the Collateral Agent to the
Custodian, for the account of Purchaser, of shares of Common Stock then held by
the Collateral Agent as collateral under the Collateral Agreement, in an amount
representing a number of shares equal to the number of Contract Shares, rounded
down to the nearest whole number. Instead of any fractional share that would
otherwise be deliverable to Purchaser at the Exchange Date, Seller agrees to
make a cash payment in respect of such fractional share in an amount equal to
the value thereof at the Reference Market Price. Notwithstanding the foregoing,
if a Reorganization Event shall have occurred prior to the Exchange Date then,
in lieu of the foregoing, delivery shall be effected as follows: (i) in the case
of any cash required to be delivered on the Exchange Date as provided in Section
6.2, by wire transfer of immediately available funds to an account designated by
Purchaser; or (ii) in the case of any shares of Marketable Securities elected by
Seller to be delivered in lieu of cash as provided in Section 6.2, at Seller's
election, by instruction to the Collateral Agent to deliver to the Custodian,
for the account of Purchaser, a specified number of shares of
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Marketable Securities then held as collateral under the Collateral Agreement, as
provided in Section 6(g) of the Collateral Agreement.
(d) Cash Settlement Alternative. At its option,
Seller may deliver to Purchaser on the Exchange Date, in lieu of the Contract
Shares, an amount in cash equal to the Reference Market Price of the Contract
Shares (the "Cash Settlement Alternative"), paid by wire transfer to an account
designated by Custodian, in New York Clearing House funds. Seller may elect the
Cash Settlement Alternative in respect of all, but not less than all, Contract
Shares by notice to Purchaser, the Collateral Agent and the Custodian not less
than 20 trading days immediately prior to (but not including) the Exchange Date.
II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each
representation and warranty made by Seller pursuant to Section 2 of the
Underwriting Agreement is true and correct on the date hereof.
III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
(a) Purchaser has been duly created and is validly
existing as a statutory business trust under the laws of the State of Delaware.
(b) This Agreement has been duly authorized,
executed and delivered by Purchaser and, assuming due authorization, execution
and delivery by Seller, is a legal, valid and binding agreement of Purchaser,
enforceable against Purchaser in accordance with its terms except as (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
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(c) The execution and delivery by Purchaser of,
and the performance by Purchaser of its obligations under, this Agreement will
not contravene any provision of applicable law or the Trust Agreement or any
agreement or other instrument binding upon Purchaser or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
Purchaser, whether foreign or domestic, and no consent, approval, authorization,
order of, or qualification with, any governmental body or agency,
self-regulatory organization or court or other tribunal, whether foreign or
domestic.
IV.
CONDITIONS TO PURCHASER'S OBLIGATIONS
(a) The obligation of Purchaser to deliver the
Purchase Price on the Firm Payment Date is subject to the satisfaction of the
following conditions:
(i) the purchase by the Underwriters of the Initial
TIMES pursuant to the Underwriting Agreement shall have been
consummated as contemplated therein; and
(ii) the representations and warranties of Seller
contained in Article III hereof shall be true and correct as of the
Firm Payment Date.
(b) The obligation of Purchaser to deliver the
Additional Purchase Price on the Option Closing Date is subject to the condition
that the purchase by the Underwriters of the Additional TIMES pursuant to the
Underwriting Agreement shall have been consummated as contemplated therein.
V.
COVENANTS
5.1 Taxes. Seller shall pay any and all documentary, stamp,
transfer or similar taxes and charges that may be payable in respect of the
entry into this Agreement and the transfer and delivery of the Contract Shares
pursuant hereto.
5.2 Forward Contract. Seller hereby agrees that:
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(i) it will not treat this Agreement, any portion of this Agreement, or any
obligation hereunder as giving rise to any interest income or other inclusions
of ordinary income; (ii) it will not treat the delivery of any portion of the
Contract Shares, cash or Marketable Securities to be delivered pursuant to this
Agreement as the payment of interest or ordinary income; (iii) it will treat
this Agreement in its entirety as a forward contract for the delivery of such
Contract Shares, cash or Marketable Securities; and (iv) it will not take any
action (including filing any tax return or form or taking any position in any
tax proceeding) that is inconsistent with the obligations contained in (i)
through (iii). Notwithstanding the preceding sentence, Seller may take any
action or position required by law, provided that Seller delivers to Purchaser
an unqualified opinion of counsel, nationally recognized as expert in Federal
tax matters, to the effect that such action or position is required by a
statutory change, Treasury regulation, or applicable court decision published
after the date of this Agreement.
5.3 Limitations on Trading During Certain Days. Seller hereby
agrees that it will not buy shares of Common Stock for its own account during
the 60 days prior to the Exchange Date; provided, however, that if any
adjustment is made to the Exchange Rate pursuant to Section 6.1(c) or (d) during
the 65 days prior to the Exchange Date the Seller may buy a maximum number of
shares of Common Stock equal to the increase in the number of Contract Shares
deliverable by the Seller on the Exchange Date solely as a result of such
adjustment; provided, further, that in no event may the Seller buy shares of
Common Stock for its own account on and after the date on which the Seller has
elected the Cash Settlement Alternative.
5.4 Notices. Seller will cause to be delivered to
Purchaser:
(a) Promptly upon the occurrence of any Event of
Default hereunder or under the Collateral Agreement, or upon Seller obtaining
knowledge that any of the conditions or events described in paragraph (a) or (b)
of Article VII shall have occurred with respect to the Company, notice of such
occurrence; and
(b) In case at any time prior to the Exchange
Date Seller receives notice, or obtains knowledge, that any event requiring that
an adjustment be effected pursuant to Article VI hereof shall have occurred or
be pending, then Seller shall promptly cause to be delivered to Purchaser a
notice identifying
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such event and stating, if known to Seller, the date on which such event is to
occur and, if applicable, the record date relating to such event. Seller shall
cause further notices to be delivered to Purchaser if Seller subsequently
receives notice, or obtains knowledge, of any further or revised information
regarding the terms or timing of such event or any record date relating thereto.
5.5 Further Assurances. From time to time on and after the
date hereof through the Exchange Date, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper and advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using reasonable best efforts to remove any legal impediment to the consummation
of such transactions and (ii) the execution and delivery of all such deeds,
agreements, assignments and further instruments of transfer and conveyance
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement in accordance with the terms and conditions
hereof.
VI.
ADJUSTMENT OF EXCHANGE RATE, THRESHOLD PRICES,
INITIAL VALUE AND CLOSING PRICE
6.1 Dilution Adjustments. The Exchange Rate, Threshold
Appreciation Price, Floor Price and the Initial Value shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends, Splits, Reclassifications,
Etc. If the Company shall, after the date hereof,
(i) pay a stock dividend or make a distribution
with respect to Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of
Common Stock into a greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock
into a smaller number of shares of Common Stock; or
(iv) issue by reclassification of shares of Common
Stock any shares of common stock of the Company;
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then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of common stock (or the fraction
thereof) that a holder who held one share of Common Stock immediately prior to
such event would be entitled solely by reason of such event to hold immediately
after such event. Upon any such adjustment the Threshold Appreciation Price,
Floor Price and Initial Value shall also be adjusted in the manner described in
Section 6.1(e).
(b) Right or Warrant Issuances. If the Company shall, after
the date hereof, issue, or declare a record date in respect of an issuance of,
rights or warrants to all holders of Common Stock entitling them to subscribe
for or purchase shares of Common Stock (other than rights to purchase Common
Stock pursuant to a plan for the reinvestment of dividends or interest) at a
price per share less than the Then-Reference Market Price of the Common Stock,
then, in each such case, the Exchange Rate shall be multiplied by the following
Dilution Adjustment: a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to the time the adjustment
is effected, plus the number of additional shares of Common Stock offered for
subscription or purchase pursuant to such rights or warrants, and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately prior to the time as of which the adjustment is effected plus the
number of additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at the
Then-Reference Market Price of the Common Stock, which shall be determined by
multiplying the total number of shares so offered for subscription or purchase
by the exercise price of such rights or warrants and dividing the product so
obtained by such Then-Reference Market Price. To the extent that shares of
Common Stock are not delivered in connection with exercises of such rights or
warrants, the Exchange Rate shall be readjusted to the Exchange Rate which would
then be in effect had such adjustments for the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
Common Stock actually delivered. Upon any such adjustment the Threshold
Appreciation Price, Floor Price and Initial Value shall also be adjusted in the
manner described in Section 6.1(e).
(c) Distributions of Other Assets. If the
Company shall, after the date hereof, declare or pay a dividend or distribution
to all holders of Common Stock, in either case, of evidences of its indebtedness
or other non-cash assets (excluding any dividends or distributions referred to
in Section
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6.1(a) above) or shall issue to all holders of Common Stock rights or warrants
to subscribe for or purchase any of its securities (other than rights or
warrants referred to in Section 6.1(b) above) or other assets or the value of
which (such as in the case of contingent value rights) is calculated by
reference to changes in the value of the Common Stock or any other reference,
then, in each such case, the Exchange Rate shall be multiplied by the following
Dilution Adjustment: a fraction of which the numerator shall be the
Then-Reference Market Price of the Common Stock, and of which the denominator
shall be such Then-Reference Market Price less the fair market value (as
determined by a nationally recognized independent investment banking firm
retained for this purpose by Purchaser) as of the time the adjustment is
effected of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights or warrants or other assets or amount
of value applicable to one share of Common Stock. Upon any such adjustment the
Threshold Appreciation Price, Floor Price and Initial Value shall also be
adjusted in the manner described in Section 6.1(e).
(d) Cash Dividends; Excess Purchase Payments.
If, after the date hereof, the Company distributes or declares a record date in
respect of a distribution of cash (other than any Permitted Dividend, any cash
distributed in consideration of fractional shares of Common Stock and any cash
distributed in a Reorganization Event), by dividend or otherwise, to all holders
of Common Stock, or makes an Excess Purchase Payment, then the Exchange Rate
will be multiplied by a fraction of which the numerator shall be the
Then-Reference Market Price of the Common Stock, and of which the denominator
shall be such Then-Reference Market Price less the amount of such distribution
applicable to one share of Common Stock which would not be a Permitted Dividend
(or in the case of an Excess Purchase Payment, less the aggregate amount of such
Excess Purchase Payments for which adjustment is being made at such time divided
by the number of outstanding shares of Common Stock on the date the adjustment
is effected). For purposes of these adjustments, (A) "Permitted Dividend" means
any cash dividend in respect of the Common Stock, other than a cash dividend
that, together with any other cash dividends during the preceding 12 months,
exceeds 10% of the average of the Closing Prices during such 12-month period and
(B) "Excess Purchase Payment" means the excess, if any, of (x) the cash and the
value (as determined by a nationally recognized independent investment banking
firm retained for this purpose by Purchaser) of all other consideration paid by
the Company with respect to one share of Common Stock acquired in any share
repurchase (excluding share repurchases by the Company effected in compliance
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with Rule 10b-18 under the Securities Exchange Act of 1934, as amended)
whether made by the Company in the open market, by private purchase by tender
offer, by exchange offer or otherwise, over (y) the Then-Reference Market Price
of the Common Stock. Notwithstanding the foregoing, the Company may pay up to
[$_____] in aggregate consideration in respect of share repurchases without any
adjustment pursuant to this Section 6.1(d) being required, provided that no such
repurchase involves an Excess Purchase Payment of more than five percent of the
Then-Reference Market Price of the Common Stock on the date an adjustment
therefor would otherwise be required to be effected. Upon any such adjustment
the Threshold Appreciation Price, Floor Price and Initial Value shall also be
adjusted in the manner described in Section 6.1(e).
(e) Corresponding Adjustments to Initial Value,
Threshold Appreciation Price, Floor Price and Closing Price.
(i) If any adjustment is made to the Exchange Rate
pursuant to Section 6.1 (a), (b), (c) or (d), an adjustment shall also
be made to the Threshold Appreciation Price, the Floor Price and the
Initial Value. The required adjustment shall be made by dividing each
of the Threshold Appreciation Price, the Floor Price and the Initial
Value by the relevant Dilution Adjustment.
(ii) If, during any Calculation Period used in
calculating the Reference Market Price, the Then-Reference Market Price
or the Transaction Value, there shall occur any event requiring an
adjustment to be effected pursuant to this Section 6.1, then the
Closing Price for each Trading Day in the Calculation Period occurring
prior to the day on which such adjustment is effected shall be adjusted
by being divided by the relevant Dilution Adjustment.
(iii) Appropriate adjustment shall also be made if
any event of the type referred to above occurs with respect to the
Nonvoting Common which has an effect on the proportion of the net
assets of the Company allocable to the Voting Common Stock.
(f) Timing of Dilution Adjustments. Each Dilution
Adjustment required hereunder shall be effected:
(i) in the case of any dividend, distribution or
issuance, at the opening of business on the Business Day next following
the record date or determination of holders
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of Common Stock entitled to receive such dividend, distribution or
issuance or, if the announcement of any such dividend, distribution or
issuance is after such record date, at the time such dividend,
distribution or issuance shall be announced by the Company;
(ii) in the case of any subdivision, split,
combination or reclassification, on the effective date of such
transaction;
(iii) in the case of any Excess Purchase Payment for
which the Company shall announce, at or prior to the time it commences
the relevant share repurchase, the repurchase price per share for
shares proposed to be repurchased on the date of such announcement; and
(iv) in the case of any other Excess Purchase
Payment, on the date that the holders of the repurchased shares become
entitled to payment in respect thereof.
(g) General; Failure of Dilution Event to Occur.
All Dilution Adjustments shall be rounded upward or downward to the nearest
1/10,000th or if there is not a nearest 1/10,000th to the next lower
1/10,000th). No adjustment in the Exchange Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
sentence are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. If any announcement or declaration of a
record date in respect of a dividend, distribution, issuance or repurchase
requiring an adjustment pursuant to this Section 6.1 shall subsequently be
cancelled by the Company, or such dividend, distribution, issuance or repurchase
shall fail to receive requisite approvals or shall fail to occur for any other
reason, then, upon such cancellation, failure of approval or failure to occur,
the Exchange Rate shall be readjusted to the Exchange Rate which would then have
been in effect had adjustment for such event not been made. If a Reorganization
Event shall occur after the occurrence of one or more events requiring an
adjustment pursuant to this Section 6.1, the Dilution Adjustments previously
applied to the Exchange Rate in respect of such events shall not be rescinded
but shall be applied to the new Exchange Rate provided for under Section 6.2.
6.2 Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any dividend or distribution by the
Company to all holders of Common Stock of
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evidences of its indebtedness or other assets (excluding (i) dividends or
distributions referred to in Section 6.1(a)(i), shares issued in a
reclassification referred to in Section 6.1(a)(iv) and Permitted Dividends),
(ii) any consolidation or merger of the Company, or any surviving entity or
subsequent surviving entity of the Company (a "Company Successor"), with or into
another entity (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another entity), (iii) any sale, transfer,
lease or conveyance to another entity of the property of the Company or any
Company Successor as an entirety or substantially as an entirety, (iv) any
statutory exchange of securities of the Company or any Company Successor with
another entity (other than in connection with a merger or acquisition) or (v)
any liquidation, dissolution or winding up of the Company or any Company
Successor (any such event described in clause (i), (ii), (iii), (iv) or (v), a
"Reorganization Event"), the Exchange Rate shall be adjusted so that on the
Exchange Date Purchaser shall receive, in lieu of, or (in the case of an
Adjustment Event described in this Section 6.2(i)) in addition to, the Contract
Shares, cash in an amount equal to the product of (x) the Firm Share Base Amount
plus the Additional Share Base Amount (if any) and (y)(i) if the Reference
Market Price is greater than or equal to the Threshold Appreciation Price, o.xx
multiplied by the Transaction Value, (ii) if the Reference Market Price is less
than the Threshold Appreciation Price but is equal to or greater than the Floor
Price, the product of (A) the Floor Price divided by the Reference Market Price
multiplied by (B) the Transaction Value and (iii) if the Reference Market Price
is less than the Floor Price, the Transaction Value. Following an Adjustment
Event, the Reference Market Price, as such term is used herein, shall be deemed
to equal (A) the Reference Market Price of the Common Stock, as adjusted
pursuant to Section 6.1(e); plus (B) the Transaction Value. Notwithstanding the
foregoing, if any Marketable Securities are received in such Reorganization
Event, Seller may, at its option, in lieu of delivering cash as described above,
deliver an equivalent amount (based on the value determined in accordance with
clause (z) of the following paragraph) of Marketable Securities, but not
exceeding, as a percentage of the total consideration required to be delivered,
the percentage of the total Transaction Value attributable to such Marketable
Securities; provided, however, that (i) if such option is exercised, the Seller
shall deliver Marketable Securities in respect of all, but not less than all,
cash amounts that would otherwise be deliverable in respect of Marketable
Securities
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received in an Adjustment Event, (ii) the Seller may not exercise such option if
the Seller has elected to deliver cash in lieu of the Common Stock, if any,
deliverable upon the Exchange Date or if such Marketable Securities have not yet
been delivered to the holders entitled thereto following such Adjustment Event
or any record date with respect thereto, and (iii) subject to clause (ii) of
this proviso, the Seller must exercise such option if the Seller does not elect
to deliver cash in lieu of Common Stock, if any, deliverable upon the Exchange
Date. If the Seller elects to deliver Marketable Securities, each holder of a
TIMES will be responsible for the payment of any and all brokerage and other
transaction costs upon the sale of such Marketable Securities. If, following any
Adjustment Event, any Marketable Security ceases to qualify as a Marketable
Security, then (x) the Seller may no longer elect to deliver such Marketable
Security in lieu of an equivalent amount of cash and (y) notwithstanding clause
(ii) of the definition of Transaction Value, the Transaction Value of such
Marketable Security shall mean the fair market value of such Marketable Security
on the date such security ceases to qualify as a Marketable Security, as
determined by a nationally recognized investment banking firm retained for this
purpose by the Seller.
"Transaction Value" means the sum of: (x) for any cash
received in any such Reorganization Event, the amount of cash received per share
of Common Stock; (y) for any property other than cash or Marketable Securities
received in any such Reorganization Event, an amount equal to the market value
on the date the Reorganization Event is consummated of such property received
per share of Common Stock, as determined by a nationally recognized independent
investment banking firm retained for this purpose by Purchaser; and (z) for any
Marketable Securities received in any such Reorganization Event, an amount equal
to the average Closing Price per share of such Marketable Securities for the
Calculation Period of 20 Trading Days immediately prior to the Exchange Date
multiplied by the number of such shares received for each share of Common Stock;
provided that if no Closing Price for such Marketable Securities may be
determined for one or more (but not all) of such Trading Days, such Trading Day
shall be disregarded in the calculation of such average Closing Price (but no
additional Trading Days shall be added to the Calculation Period). If no Closing
Price for the Marketable Securities may be determined for all such Trading Days,
the calculation in the preceding clause (z) shall be based on the most recently
available Closing Price for the Marketable Securities prior to such 20 Trading
Days.
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"Marketable Securities" means any securities that (A) are (i)
listed on a United States national securities exchange, (ii) reported on a
United States national securities system subject to last sale reporting, (iii)
traded in the over-the-counter market and reported on the National Quotation
Bureau or similar organization or (iv) for which bid and ask prices are
available from at least three nationally recognized investment banking firms and
(B) are either (x) perpetual equity securities or (y) non-perpetual equity or
debt securities with a stated maturity after the stated maturity of the TIMES.
The number of shares of any Marketable Securities included in the calculation of
Transaction Value pursuant to the clause (z) of the preceding paragraph, and the
Threshold Appreciation Price, Floor Price and Initial Value, shall be subject to
adjustment if any event that would, had it occurred with respect to the Common
Stock or the Company, have required an adjustment pursuant to Section 6.1, shall
occur with respect to such Marketable Securities or the issuer thereof
subsequent to the date the Reorganization Event is consummated. Adjustment for
such subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1.
VII.
ACCELERATION
If one or more of the following events (each an "Event of
Default") shall occur:
(a) Seller shall commence a voluntary case or
other proceeding seeking a liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall take any corporate action to
authorize any of the foregoing;
(b) an involuntary case or other proceeding shall
be commenced against Seller seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator,
18
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 days; or an order for relief shall be entered
against Seller under the federal bankruptcy laws as now or hereafter in effect;
or
(c) a Collateral Event of Default within the
meaning of the Collateral Agreement;
then, upon the occurrence of any such event, an Acceleration Date shall occur,
and Seller shall become obligated to deliver immediately upon receipt of the
Acceleration Amount Notice, the Acceleration Amount. The "Acceleration Amount"
means that number of shares of Common Stock determined by dividing: (i) the
Aggregate Acceleration Value by (ii) the Closing Price on the Acceleration Date.
If a Reorganization Event shall have occurred on or before the Acceleration
Date, then in lieu of the Acceleration Amount, Seller shall deliver cash,
Marketable Securities or a combination thereof, as the case may be, having an
aggregate value, based on the Closing Price per share of the Marketable
Securities on the Acceleration Date, equal to the Aggregate Acceleration Value;
provided that the percentage of such aggregate value that may be delivered in
the form of Marketable Securities shall not exceed the percentage of the
Transaction Value that would be attributable to Marketable Securities if the
Exchange Date were the Acceleration Date.
The "Aggregate Acceleration Value" means the product obtained
by multiplying (i) the Acceleration Value (as defined below) by (ii) the
quotient obtained by dividing (A) the sum of the Firm Share Base Amount and the
Additional Share Base Amount (if any) by (B) 1,000; except that, if no
quotations for the determination of the Acceleration Value are obtained as
described below, the Aggregate Acceleration Value shall be the Closing Price on
the Acceleration Date times the number of shares of Common Stock that would be
required to be delivered by Seller on such date under this Agreement if the
Exchange Date were the Acceleration Date.
The "Acceleration Value" means an amount determined on the
basis of quotations from up to four Independent Dealers, as defined below. Each
quotation will be for the amount that would be paid to the relevant Independent
Dealer in consideration of an agreement between Purchaser and such Independent
Dealer that would have the effect of preserving for Purchaser the economic
equivalent of the payments and deliveries that Purchaser would,
19
but for the occurrence of the Acceleration Date, have been entitled to receive
after the Acceleration Date under Article I hereof (taking into account any
adjustments to the Exchange Rate that may have been effected on or prior to the
Acceleration Date) provided that, for purposes of determining the payments and
deliveries to which Purchaser is entitled under Article I hereto, the Additional
Share Base Amount shall be redefined to be zero and the Firm Share Base Amount
shall be redefined to be 1,000. On or as soon as reasonably practicable
following the date on which Purchaser receives notice, or obtains knowledge of,
such Acceleration Date, Purchaser will request each Independent Dealer to
provide its quotation as soon as reasonably practicable, but in any event within
two Business Days. Purchaser shall compute Acceleration Value upon receipt of
each Independent Dealer's quotation, provided that if, at the close of business
on the fourth Business Day following the date on which Purchaser receives
notice, or obtains knowledge of, such Acceleration Date, Purchaser shall have
received quotations from fewer than four of the Independent Dealers, Purchaser
shall compute the Acceleration Value using the quotations, if any, it shall have
received at or prior to such time. If four quotations are provided, the
Acceleration Value will be the arithmetic mean of the two quotations remaining
after disregarding the highest and lowest quotations. (For this purpose, if more
than one quotation has the same highest or lowest value, then one of such
quotations shall be disregarded.) If two or three quotations are provided, the
Acceleration Value will be the arithmetic mean of such quotations. If one
quotation is provided, the Acceleration Value will be equal to such quotation.
If no quotations are provided, the Acceleration Value will not be determined and
the Aggregate Acceleration Value will be determined as provided above.
"Independent Dealer" means a nationally recognized independent
investment banking firm selected in good faith by Purchaser.
As promptly as reasonably practicable after receipt of the
quotations on which the Acceleration Value is based (or, as the case may be,
after failure to receive any such quotations within the time period prescribed
above, Purchaser shall deliver to Seller a notice (the "Acceleration Amount
Notice") specifying the Acceleration Amount of Shares required to be delivered
by Seller.
Purchaser and Seller agree that the Aggregate Acceleration
Value is a reasonable pre-estimate of loss and not a penalty. Such amount is
payable for the loss of bargain and
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Purchaser will not be entitled to recover additional damage as a consequence of
loss resulting from an Event of Default.
VIII.
MISCELLANEOUS
8.1 Adjustments of Exchange Rate; Selection of Independent
Investment Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI hereof and shall furnish
Seller notice of any such adjustment and shall provide Seller reasonable
opportunity to review the calculations pertaining to any such adjustment. If,
pursuant to the terms and conditions hereof, Purchaser shall be required to
retain a nationally recognized independent investment banking firm for any
purpose provided herein, such nationally recognized independent investment
banking firm shall be selected and retained by Purchaser only after consultation
with Seller. Purchaser may delegate the selection of any such firm, or the
effectuation and calculation of any such adjustments, to the Administrator.
8.2 Notices. Any notice provided for herein, unless otherwise
specified, shall be in writing (including transmittal by telex or telecopier)
and shall be given to a party at the address set forth opposite such party's
name on the signature pages hereto or at such other address as may be designated
by notice duly given in accordance with this Section 8.2 to each other party
hereto.
8.3 Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
To the extent permitted by law, the unenforceability or invalidity of any
provision or provisions of this Agreement shall not render any other provision
or provisions herein contained unenforceable or invalid.
8.4 Entire Agreement. Except as expressly set forth herein,
this Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior agreements, understandings
and negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
8.5 Amendments; Waivers. Any provision of this Agreement may
be amended or waived if, and only if, such amendment
21
or waiver is in writing and signed, in the case of an amendment, by
Purchaser and Seller or, in the case of a waiver, by the party against whom the
waiver is to be effective. No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
8.6 No Third Party Rights; Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Seller and Purchaser and their respective successors and
assigns and no person shall assert any rights as third party beneficiary
hereunder. Whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party. All the
covenants and agreements herein contained by or on behalf of Seller and
Purchaser shall bind, and inure to the benefit of, their respective successors
and assigns whether so expressed or not, and shall be enforceable by and inure
to the benefit of Purchaser and its successors and assigns.
8.7 Counterparts. This Agreement may be executed acknowledged
and delivered in any number of counterparts, and such counterparts taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date and year first above written.
SELLER:
Banc One Capital Holdings
Corporation
By ______________________________
Address for Notices:
_________________________________
_________________________________
_________________________________
_________________________________
Attention:_______________________
PURCHASER:
Mandatory Common Exchange Trust
_________________________________
as Trustee
Address for Notices:
_________________________________
_________________________________
_________________________________
_________________________________
Attention:_______________________
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