STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of November 3, 1999 (the "Agreement"),
by and between American Home Products Corporation, a Delaware corporation
("Issuer"), and Xxxxxx-Xxxxxxx Company, a Delaware corporation ("Grantee").
WHEREAS, Issuer, Grantee and Wolverine Sub Corp., a Delaware corporation
("Sub"), which is a direct wholly owned subsidiary of Issuer, propose to
enter into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"; capitalized terms used but not defined herein shall have
the meanings set forth in the Merger Agreement), providing for, among other
things, a merger (the "Merger") of Sub with and into Grantee;
WHEREAS, as a condition and inducement to Grantee's willingness to enter
into the Merger Agreement and the Xxxxxx-Xxxxxxx Stock Option Agreement,
Grantee has requested that Issuer agree, and Issuer has agreed, to grant
Grantee the Option (as defined below); and
WHEREAS, as a condition and inducement to Issuer's willingness to enter
into the Merger Agreement and this Agreement, Issuer has requested that
Grantee agree, and Grantee has agreed, to grant Issuer an option to purchase
shares of Grantee's common stock under the Xxxxxx-Xxxxxxx Stock Option
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Options. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase up to 194,551,963 shares (the "Option Shares") of common stock,
par value $0.33 1/3 per share, of Issuer (the "Shares") (being 14.9% of the
number of Shares outstanding on October 31, 1999 before such issuance),
together with the associated purchase rights (the "Rights") under the Rights
Agreement, dated as of October 13, 1999, between Issuer and ChaseMellon
Shareholder Services L.L.C., as Rights Agent (references to the Option Shares
shall be deemed to include the associated Rights), at a purchase price of
$56.00 per Option Share (such price, as adjusted if applicable, the "Purchase
Price"). The number of Option Shares that may be received upon the exercise
of the Option and the Purchase Price are subject to adjustment as set forth
herein.
2. Exercise of Option. (a) Grantee may exercise the Option, in whole
or in part, at any time or from time to time following the occurrence of a
Purchase Event (as defined below); provided that, except as otherwise
provided herein, the Option shall terminate and be of no further force and
effect upon the earliest to occur of (i) the Effective Time, (ii) 6 months
after the first occurrence of a Purchase Event (or if, at the expiration of
such 6-months after the first occurrence of a Purchase Event, the Option
cannot be exercised by reason of any applicable judgment, decree, order, law
or regulation, 10 business days after such impediment to exercise shall have
been removed, but in no event under this clause (ii) later than the first
anniversary of the Purchase Event), (iii) termination of the Merger Agreement
under circumstances which do not and cannot result in Grantee's becoming
entitled to receive termination fees from Issuer pursuant to Section 7.2(b)
of the Merger Agreement of $1.8 billion or more; and (iv) 12 months after the
termination of the Merger Agreement under circumstances which could result in
Grantee's becoming entitled to receive termination fees from Issuer pursuant
to Section 7.2(b)(ii)(ii) or 7.2(b)(C), unless during such 12-month period, a
Purchase Event shall occur. Notwithstanding the foregoing, the Option shall
terminate and not be exercisable if (x) at the time the Merger Agreement is
terminated, Grantee has the right to terminate the Merger Agreement pursuant
to Section 7.1(f) thereof and the circumstances referred to in Section
7.2(b)(E)(II) of the Merger Agreement are not applicable, and (y) prior to
the 90th day following termination of the Merger Agreement, Issuer does not
(i) enter into a definitive agreement with any third party with respect to a
Business Combination or (ii) consummate any Business Combination with respect
to Issuer, which in each case is more favorable to Issuer's stockholders (in
their capacities as such) from a financial point of view than the Merger,
such determination of whether such Business Combination is more favorable
than the Merger shall be made in accordance with the terms of Section
7.2(b)(iv) of the Merger Agreement. The termination of the Option shall not
affect any rights hereunder which by their terms extend beyond the date of
such termination.
(b) As used herein, a "Purchase Event" means an event the result
of which is that the total fee or fees required to be paid by Issuer to
Grantee pursuant to Section 7.2(b) of the Merger Agreement equals or exceeds
$1.8 billion.
(c) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the "Exercise Notice"; the date of which
being herein referred to as the "Notice Date") specifying (i) the total
number of Option Shares it intends to purchase pursuant to such exercise and
(ii) a place and date not earlier than three business days nor later than 10
business days from such Notice Date for the closing of such purchase (a
"Closing"; and the date of such Closing, a "Closing Date"); provided that
such closing shall be held only if (A) such purchase would not otherwise
violate or cause the violation of applicable law (including the HSR Act), (B)
no law, rule or regulation shall have been adopted or promulgated, and no
temporary restraining order, preliminary or permanent injunction or other
order, decree or ruling issued by a court or other governmental authority of
competent jurisdiction shall be in effect, which prohibits delivery of such
Option Shares (and the parties hereto shall use their reasonable best efforts
to have any such order, injunction, decree or ruling vacated or reversed) and
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(C) any prior notification to or approval of any other regulatory authority
in the United States or elsewhere required in connection with such purchase
shall have been made or obtained, other than those which if not made or
obtained would not reasonably be expected to result in a significant
detriment to the Grantee and its Subsidiaries taken as a whole or the Issuer
and its Subsidiaries taken as a whole. If the Closing cannot be consummated
by reason of a restriction set forth in clause (A), (B) or (C) above,
notwithstanding the provisions of Section 2(a), the Closing shall be held
within 5 business days following the elimination of such restriction.
3. Payment and Delivery of Certificates. On each Closing Date,
Grantee shall pay to Issuer in immediately available funds by wire transfer
to a bank account designated by Issuer an amount equal to the Purchase Price
multiplied by the Option Shares to be purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such closing, which Option Shares shall be free and clear of all
liens, charges or encumbrances ("Liens"), and Grantee shall deliver to Issuer
a letter agreeing that Grantee shall not offer to sell or otherwise dispose
of such Option Shares in violation of applicable law or the provisions of
this Agreement.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which 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, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER
3, 1999. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required for purposes
of the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference.
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4. Authorized Stock. Issuer hereby represents and warrants to Grantee
that Issuer has taken all necessary corporate and other action to authorize
and reserve and to permit it to issue, at all times from the date hereof
until the obligation to deliver Shares upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the Option,
Shares necessary for Grantee to exercise the Option, and Issuer will take all
necessary corporate action to authorize and reserve for issuance all
additional Shares or other securities which may be issued pursuant to Section
6 upon exercise of the Option. The Shares to be issued upon due exercise of
the Option, including all additional Shares or other securities which may be
issuable upon exercise of the Option pursuant to Section 6, upon issuance
pursuant hereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all Liens, including
any preemptive rights of any stockholder of Issuer.
5. Purchase Not for Distribution. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option will not be taken with a view to the
public distribution thereof and will not be transferred or otherwise disposed
of except in a transaction registered or exempt from registration under the
Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the event
of any change in Shares by reason of reclassification, recapitalization,
stock split, split-up, combination, exchange of shares, stock dividend,
dividend, dividend payable in any other securities, or any similar event, the
type and number of Shares or securities subject to the Option, and the
Purchase Price therefor (including for purposes of repurchase thereof
pursuant to Section 7), shall be adjusted appropriately, and proper
provisions shall be made in the agreements governing such transaction, so
that Grantee shall 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 Shares if the Option had been exercised immediately prior to such
event or the record date therefor, as applicable. If any additional Shares
are issued after the date of this Agreement (other than pursuant to an event
described in the immediately preceding sentence), the number of Shares
subject to the Option shall be adjusted so that immediately prior to such
issuance, it equals 14.9% of the number of Shares then issued and
outstanding. In no event shall the number of Shares subject to the Option
exceed 14.9% of the number of Shares issued and outstanding at the time of
exercise (without giving effect to any shares subject or issued pursuant to
the Option).
(b) Without limiting the foregoing, whenever the number of Option
Shares purchasable upon exercise of the Option is adjusted as provided in
this Section 6, the Purchase Price per Option Share shall be adjusted by
multiplying the Purchase Price by a fraction, the numerator of which is equal
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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, in the event that Issuer enters into an agreement
(i) to consolidate with or merge into any person, other than Grantee or one
of its Subsidiaries, and Issuer will not be the continuing or surviving
corporation in such consolidation or merger, (ii) to permit any Person, other
than Grantee or one of its Subsidiaries, to merge into Issuer and Issuer will
be the continuing or surviving corporation, but in connection with such merger,
the shares of Common Stock outstanding immediately prior to the consummation
of such merger will be changed into or exchanged for stock or other
securities of Issuer or any other Person or cash or any other property, or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any Person, other than Grantee or one of its Subsidiaries, 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. Issuer 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.
7. Repurchase of Option. (a) Notwithstanding the provisions of
Section 2(a), at any time commencing upon the first occurrence of a Purchase
Event and ending upon termination of this Option in accordance with Section
2, Issuer (or any successor entity thereof) shall at the request of Grantee
(any such request, a "Cash Exercise Notice"), repurchase from Grantee the
Option or a portion thereof (if and to the extent not previously exercised or
terminated) at a price which, subject to Section 10 below, is equal to the
excess, if any, of (x) the Applicable Price (as defined below) as of the
Section 7 Request Date (as defined below) for a Share over (y) the Purchase
Price (subject to adjustment pursuant to Section 6), multiplied by all or
such portion of the Option Shares subject to the Option as the Grantee shall
specify in the Cash Exercise Notice (the "Option Repurchase Price").
(b) Notwithstanding the provisions of Section 2(a), at any time
following the occurrence of a Purchase Event, Issuer (or any successor entity
thereof) may, at its election, repurchase the Option (if and to the extent
not previously exercised or terminated) at the Option Repurchase Price;
provided that the aggregate number of Option Shares as to which the Option
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may be repurchased shall not exceed 129,701,373. For purposes of this
Agreement, an exercise of the Option shall be deemed to occur on the Closing
Date and not on the Notice Date relating thereto.
(c) In connection with any exercise of rights under this Section
7, Issuer shall, within 5 business days after the Section 7 Request Date, pay
the Option Repurchase Price in immediately available funds, and Grantee or
such owner, as the case may be, shall surrender to Issuer the Option. Upon
receipt by the Grantee of the Option Repurchase price, the obligations of the
Issuer to deliver Option Shares pursuant to Section 3 of this Agreement shall
be terminated with respect to the number of Option Shares specified in the
Cash Exercise Notice or the number of Option Shares as to which the Option is
repurchased under Section 7(b).
(d) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Applicable Price", as of any date, means the highest of (A)
the highest price per Share paid or proposed to be paid by any third
party for Shares or the consideration per Share received or to be
received by holders of Shares, in each case pursuant to any Acquisition
Proposal for or with Issuer made on or prior to such date or (B) the
average closing price per Share as reported on the New York Stock
Exchange, Inc. ("NYSE") Composite Tape or if the Shares are not listed
on the NYSE, the highest bid price per Share as quoted on the National
Association of Securities Dealers Automated Quotation System or, if the
Shares are not quoted thereon, on the principal trading market on which
such Shares are traded as reported by a recognized source during the 10
trading days preceding such date. If the consideration to be offered,
paid or received pursuant to the foregoing clause (A) 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 Grantee and reasonably acceptable to Issuer.
(ii) "Section 7 Request Date" means the date on which Issuer or
Grantee, as the case may be, exercises its rights under this Section.
8. Registration Rights. Issuer shall, if requested by Grantee or any
Subsidiary of the Grantee which is the owner of Option Shares (collectively
with Grantee, the "Owners") at any time and from time to time within two
years of the first exercise of the Option, as expeditiously as possible
prepare and file up to two registration statements under the Securities Act
if such registration is necessary in order to permit the sale or other
disposition of any or all shares of securities that have been acquired by or
are issuable to such Owners upon exercise of the Option in accordance with
the intended method of sale or other disposition stated by such Owners,
including a "shelf" registration statement under Rule 415 under the
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Securities Act or any successor provision, and Issuer shall use all
reasonable efforts to qualify such shares or other securities under any
applicable state securities laws. Issuer shall use all reasonable efforts to
cause each such registration statement to become effective, to obtain all
consents or waivers of other parties which are required therefor and to keep
such registration statement effective for such period at least 90 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 Issuer hereunder to file a registration statement and to
maintain its effectiveness may be suspended for a period of time not
exceeding 90 days in the aggregate if the Board of Directors of Issuer shall
have determined in good faith that the filing of such registration statement
or the maintenance of its effectiveness would require disclosure of nonpublic
information that would materially and adversely affect Issuer (but in no
event shall Issuer exercise such postponement right more than once in any 12-
month period). Any registration statement prepared and filed under this
Section 8, and any sale covered thereby, shall be at Issuer's expense except
for underwriting discounts or commissions, brokers' fees and the reasonable
fees and disbursements of Owners' counsel related thereto. The Owners shall
provide all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If during the time period
referred to in the first sentence of this Section 8 Issuer effects a
registration under the Securities Act of Shares for its own account or for
any other stockholders of Issuer (other than on Form S-4 or Form S-8, or any
successor form), it shall allow the Owners the right to participate in such
registration, and such participation shall not affect the obligation of
Issuer to effect two registration statements for the Owners under this
Section 8; provided that, if the managing underwriters of such offering
advise Issuer in writing that in their opinion the number of Shares requested
to be included in such registration exceeds the number which can be sold in
such offering without adversely affecting the offering price, Issuer and the
Owners shall each reduce on a pro rata basis the Shares to be included
therein on their respective behalf. In connection with any registration
pursuant to this Section 8, Issuer and the Owners shall provide each other
and any underwriter of the offering with customary representations,
warranties, covenants, indemnification and contribution in connection with
such registration.
9. Additional Covenants of Issuer. (a) If Shares or any other
securities to be acquired upon exercise of the Option are then listed on the
NYSE or any other securities exchange or market, Issuer, upon the request of
any Owner, will promptly file an application to list the Shares or other
securities to be acquired upon exercise of the Options on the NYSE or such
other securities exchange or market and will use its reasonable best efforts
to obtain approval of such listing as soon as practicable.
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(b) Issuer will use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
permit the exercise of the Option in accordance with the terms and conditions
hereof, as soon as practicable after the date hereof, including making any
appropriate filing pursuant to the HSR Act and any other applicable law,
supplying as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any
other applicable law, and taking all other actions necessary to cause the
expiration or termination of the applicable waiting periods under the HSR Act
as soon as practicable.
(c) Issuer agrees not to avoid or seek to avoid (whether by
charter amendment or through reorganization, consolidation, merger, issuance
of rights, dissolution or sale of assets, or by any other voluntary act) the
observance or performance of any of the covenants, agreements or conditions
to be observed or performed hereunder by it.
(d) Issuer shall take all such steps as may be required to cause
any acquisitions or dispositions by Grantee (or any affiliate who may become
subject to the reporting requirements of Section 16(a) of the Exchange Act)
of any Shares acquired in connection with this Agreement (through conversion
or exercise of the Option or otherwise) to be exempt under Rule 16b-3
promulgated under the Exchange Act.
10. Limitation of Grantee Profit. (a) Notwithstanding any other
provision in this Agreement, in no event shall Grantee's Total Profit (as
defined below) exceed $2 billion (the "Maximum Profit") and, if it otherwise
would exceed such amount, Grantee, at its sole discretion, shall either (i)
reduce the number of Shares subject to the Option, (ii) deliver to Issuer for
cancellation Shares (or other securities into which such Option Shares are
converted or exchanged) previously purchased by Grantee, (iii) pay cash to
Issuer, or (iv) any combination of the foregoing, so that Grantee's actually
realized Total Profit shall not exceed the Maximum Profit after taking into
account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of Option Shares as would, as of any
Notice Date, result in a Notional Total Profit (as defined below) of more
than the Maximum Amount and, if exercise of the Option otherwise would result
in the Notional Total Profit exceeding such amount, Grantee, at its
discretion, may (in addition to any of the actions specified in Section 10(a)
above) (i) reduce the number of Shares subject to the Option or (ii) increase
the Purchase Price for that number of Option Shares set forth in the Exercise
Notice so that the Notional Total Profit shall not exceed the Maximum Profit;
provided that nothing in this sentence shall restrict any exercise of the
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Option permitted hereby on any subsequent date at the Purchase Price set
forth in Section 1 hereof.
(c) For purposes of this Agreement, "Total Profit" shall mean:
(i) the aggregate amount (before taxes) of (A) any excess of (x) the net cash
amounts or fair market value of any property received by Grantee pursuant to
a sale of Option Shares (or securities into which such shares are converted
or exchanged) over (y) the Grantee's aggregate purchase price for such Option
Shares (or other securities), plus (B) any amounts received by Grantee on the
repurchase of the Option by Issuer pursuant to Section 7, plus (C) any
termination fee paid by Issuer and received by Grantee pursuant to Section
7.2(b) of the Merger Agreement, minus (ii) the amounts of any cash previously
paid by Grantee to Issuer pursuant to this Section 10 plus the value of the
Option Shares (or other securities) previously delivered by Grantee to Issuer
for cancellation pursuant to this Section 10.
(d) For purposes of this Agreement, "Notional Total Profit" with
respect to any number of Option Shares as to which Grantee may propose to
exercise the Option shall mean the Total Profit determined as of the Notice
Date assuming that the Stock Option was exercised on such date for such
number of Option Shares and assuming that such Option Shares, together with
all other Option Shares previously acquired upon exercise of the Option and
held by Grantee as of such date, were sold for cash at the closing price per
Share on the NYSE as of the close of business on the preceding trading day
(less customary brokerage commissions).
(e) Notwithstanding any other provision of this Agreement, nothing
in this Agreement shall affect the ability of Grantee to receive, nor relieve
Issuer's obligation to pay, any termination fee provided for in Section
7.2(b) of the Merger Agreement; provided that if and to the extent the Total
Profit received by Grantee would exceed the Maximum Profit following receipt
of such payment, Grantee shall be obligated to promptly comply with the terms
of Section 10(a).
(f) For purposes of Section 10(a) and clause (ii) of Section
10(c), the value of any Option Shares delivered by Grantee to Issuer shall be
the Applicable Price of such Option Shares.
11. Loss, Theft, Etc. of Agreement. This Agreement (and the Option
granted hereby) is exchangeable, without expense, at the option of Grantee,
upon presentation and surrender of this Agreement at the principal office of
Issuer for other Agreements providing for Options of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
Shares purchasable hereunder. The terms "Agreement" and "Option" as used
herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
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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, Issuer will
execute and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9 hereof or
in the Merger Agreement, each of the parties hereto shall bear and pay all
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,
together with the Merger Agreement and the Xxxxxx-Xxxxxxx Stock Option
Agreement (a) 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 (b) is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or a federal or state regulatory
agency to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
If for any reason such court or regulatory agency determines that the Option
does not permit Grantee to acquire, or does not require Issuer to repurchase,
the full number of Shares as provided in Sections 2 and 7, as adjusted
pursuant to Section 6, it is the express intention of Issuer to allow Grantee
to acquire or to require Issuer to repurchase such lesser number of Shares as
may be permissible without any amendment or modification hereof.
(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT
TO CHOICE OF LAW PRINCIPLES).
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(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given as set forth in Section 8.2 of the
Merger Agreement.
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the
same agreement and shall become effective when both counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may not, without the prior written
consent of Issuer (which shall not be unreasonably withheld), assign this
Agreement or the Option to any other person. This Agreement shall not be
assignable by Issuer except by operation of law. 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.
(i) Representations and Warranties. The representations and
warranties contained in Sections 3.1(a)(i) and 3.2(a)(i) of the Merger
Agreement, and, to the extent they relate to this Stock Option Agreement, in
Sections 3.1(b), (c), (f), (g) and (q) and Section 3.2(c) of the Merger
Agreement, are incorporated herein by reference.
(j) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and 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) Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity. Both 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.
(l) Captions. The Article, Section and paragraph captions herein
are for convenience only, do not constitute part of this Agreement and shall
not be deemed to limit or otherwise affect any of the provisions hereof.
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(m) Confidentiality Agreement. Issuer hereby waives the
restrictions on Grantee's acquisition of Shares contained in the
Confidentiality Agreement to the extent necessary to permit Grantee to
exercise the Option and purchase the Option Shares as herein provided.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of November 3, 1999.
XXXXXX-XXXXXXX COMPANY
By: /s/ Xxxxxxxx X.X. xx Xxxx
-------------------------------------
Name: Xxxxxxxx X.X. xx Xxxx
Title: Chairman, Chief Executive
Officer and President
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, Chief Executive
Officer and President
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