THE TRANSFER OF THIS AGREEMENT IS
SUBJECT TO CERTAIN PROVISIONS CONTAINED
HEREIN AND MAY BE SUBJECT TO TRANSFER RESTRICTIONS UNDER
THE FEDERAL SECURITIES LAWS
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of January 15, 1997 (the
"Agreement"), by and between Oxford Resources Corp., a New York corporation
("Issuer"), and Xxxxxxx Xxxxx, Inc., a Florida corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), of even date herewith, providing
for, among other things, the merger of a wholly owned subsidiary of Grantee
with and into Issuer; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has requested that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer grants to Grantee an irrevocable option (the "Option") to
purchase up to 2,974,658 shares (subject to adjustment as set forth herein) (the
"Option Shares") of Class A common stock, par value $.01 per share, of Issuer
("Issuer Common Stock") at a purchase price (subject to adjustment as set forth
herein) of $33.75 per Option Share (the "Purchase Price").
3. EXERCISE OF OPTION. (a) Provided that no preliminary or
permanent injunction or other order against the delivery of Option Shares issued
by any court
of competent jurisdiction in the United States shall be in effect, Grantee may
exercise the Option, in whole or part, and from time to time, if, but only if, a
Triggering Event shall have occurred prior to the occurrence of an Exercise
Termination Event (as hereinafter defined); PROVIDED, HOWEVER, that Grantee
shall have sent the written notice of such exercise (as provided in subsection
(d) of this Section 3) within 90 days following such Triggering Event; and
PROVIDED FURTHER, HOWEVER, that any purchase of shares upon exercise of the
Option shall be subject to compliance with applicable law; and PROVIDED FURTHER,
HOWEVER, that if the Option cannot be exercised on any day because of any
injunction, order or similar restraint issued by a court of competent
jurisdiction, the period during which the Option may be exercised shall be
extended so that the Option shall expire no earlier than on the 10th business
day after such injunction, order or restraint shall have been dissolved or when
such injunction, order or restraint shall have become permanent and no longer
subject to appeal, as the case may be. Each of the following shall be an
Exercise Termination Event: (i) the Effective Time; (ii) termination of the
Merger Agreement in accordance with the provisions thereof if such termination
occurs prior to the occurrence of a Triggering Event other than a termination by
Grantee pursuant to Section 8.1(e) of the Merger Agreement if the breach by the
Issuer giving rise to such termination is willful; or (iii) the passage of
twelve months after termination of the Merger Agreement if such termination
follows the occurrence of a Triggering Event or is a termination by Grantee
pursuant to Section 8.1(e) of the Merger Agreement if the breach by the Issuer
giving rise to such termination is willful; PROVIDED, HOWEVER, that if a
Triggering Event occurs within twelve months after such termination of the
Merger Agreement pursuant to Section 8.1(e), the Exercise Termination Event
shall be twelve months from the expiration of the Last Triggering Event (as
hereinafter defined) but in no event more than 18 months after such termination
of the Merger Agreement. The "Last Triggering Event" shall mean the last
Triggering Event to expire. The rights set forth in Section 8 hereof shall
terminate at the time set forth in Section 8.
(b) The term "Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
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(i) Issuer or any of its Subsidiaries, without having
received Grantee's prior written consent, shall have entered into an
agreement to engage in an Acquisition Transaction (as hereinafter
defined) with any person (other than Grantee or any of its
Subsidiaries) or Issuer or any of its Subsidiaries, without having
received Grantee's prior written consent, shall have authorized,
recommended, proposed, or publicly announced its intention to
authorize, recommend or propose to engage in, an Acquisition
Transaction with any person other than Grantee or a Subsidiary of
Grantee. For purposes of this Agreement, "Acquisition Transaction"
shall mean (w) a merger or consolidation, or any similar transaction,
involving Issuer or any of its Subsidiaries (other than internal
mergers, reorganizations, consolidations or dissolutions involving
only existing Subsidiaries), (x) a purchase, lease or other
acquisition of all or a substantial portion of the consolidated assets
of Issuer and its Subsidiaries, or (y) a purchase or other acquisition
(including by way of merger, consolidation, Tender Offer or Exchange
Offer (as such terms are hereinafter defined), share exchange or
otherwise) of securities representing 15% or more of the voting power
of Issuer;
(ii) (A) the Merger Agreement and the transactions
contemplated thereby shall not have been approved at the meeting of
Issuer's shareholders held for the purpose of voting on such agreement
or (B) such meeting shall not have been held or shall have been
cancelled prior to termination of the Merger Agreement, in each case
after it shall have been publicly announced that any person other than
Grantee or any Subsidiary of Grantee (w) shall have made a bona fide
proposal to engage in an Acquisition Transaction, (x) shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of 15% or more of the voting power of Issuer (the term
"beneficial ownership" for purposes of this Option Agreement having
the meaning assigned thereto in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder), (y) shall have commenced (as such term is
defined under Rule 14d-2 promulgated under the Exchange
3
Act), or shall have filed or publicly disseminated a registration
statement or similar disclosure statement with respect to, a tender
offer or exchange offer to purchase any shares of Issuer Common Stock
such that, upon consummation of such offer, such person would own or
control 15% or more of the voting power of Issuer (such an offer being
referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively), or (z) shall have filed an application (or given a
notice), whether in draft or final form, under any federal or state
banking laws seeking regulatory approval to engage in an Acquisition
Transaction; or
(iii) Issuer shall have willfully breached any
representation, warranty, covenant or obligation contained in the
Merger Agreement and such breach would entitle Grantee to terminate
the Merger Agreement in accordance with the terms thereof (without
regard to any cure periods provided for in the Merger Agreement unless
such cure is promptly effected without jeopardizing the consummation
of the Merger in accordance with the terms of the Merger Agreement)
after any person other than Grantee or any Subsidiary of Grantee shall
have (w) stated its intention to Issuer or its shareholders to make a
proposal to engage in an Acquisition Transaction if the Merger
Agreement terminates, (x) made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction, (y) commenced a
Tender Offer, or filed or publicly disseminated a registration
statement or similar disclosure statement with respect to an Exchange
Offer, or (z) filed an application (or given a notice), whether in
draft or final form, under any federal or state banking laws seeking
regulatory approval to engage in an Acquisition Transaction.
As used in this Agreement, (a) "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act and (b) "group"
shall have the meaning specified in Section 13(d)(3) of the Exchange Act.
(d) In the event Grantee is entitled to under the terms of this
Agreement and wishes to exercise the Option, it shall send to Issuer a written
notice (the
4
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 30
business days from the Notice Date for the closing (the "Closing") of such
purchase (the "Closing Date"). If prior notification to or approval of any
regulatory authority is required in connection with such purchase, Issuer shall
cooperate in good faith with Grantee in the filing of the required notice or
application for approval and the obtaining of any such approval and the period
of time that otherwise would run pursuant to the preceding sentence shall run
instead from the date on which, as the case may be (i) any required notification
period has expired or been terminated or (ii) such approval has been obtained,
and in either event, any requisite waiting period shall have passed.
4. PAYMENT AND DELIVERY OF CERTIFICATES. (a) On each Closing Date,
Grantee shall (i) 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 number of Option Shares to be purchased on such Closing Date
and (ii) present and surrender this Agreement to the Issuer at the address of
the Issuer specified in Section 13(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a) hereof, Issuer shall deliver to Grantee (A) 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, claims, charges and
encumbrances of any kind whatsoever, other than any such lien or encumbrance
created by Grantee and (B) if the Option is exercised in part only, an executed
new agreement with the same terms as this Agreement evidencing the right to
purchase the balance of the shares of Issuer Common Stock purchasable hereunder.
If Issuer shall have issued rights or any similar securities ("Rights") pursuant
to any shareholder rights, poison pill or similar plan (a "Shareholder Rights
Plan") prior or subsequent to the date of this Agreement and such Rights remain
outstanding at the time of the issuance of any Option Shares pursuant to an
exercise of all or part of the Option hereunder, then each Option Share issued
pursuant to such exercise
5
shall also represent the number of Rights issued per share of Issuer Common
Stock with terms substantially the same as and at least as favorable to Grantee
as are provided under the Shareholder Rights Plan as then in effect.
(c) In addition to any other legend that is required by
applicable law, 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 MAY BE
SUBJECT TO RESTRICTIONS ARISING UNDER THE FEDERAL SECURITIES LAWS AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF JANUARY
14, 1997. 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 the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the Securities and Exchange
Commission (the "SEC"), or an opinion of outside counsel reasonably satisfactory
to Issuer 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 of 1933, as amended (the "Securities Act").
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) DUE AUTHORIZATION. Issuer has full corporate power and
authority to enter into 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 authorized
by all necessary corporate action on the part of Issuer. This Agreement has
been duly and validly executed and delivered by Issuer.
(b) NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the consummation of
6
the transactions contemplated hereby, nor compliance by Issuer with any of the
terms or provisions hereof, will (i) violate any provision of the Restated
Certificate of Incorporation (the "Organization Certificate") or ByLaws of
Issuer or the certificates of incorporation, by-laws or similar governing
documents of any of its Subsidiaries or (ii) (x) assuming that all of the
consents and approvals required under applicable law for the purchase of Option
Shares upon the exercise of the Option are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Issuer or any of its Subsidiaries, or any of their respective
properties or assets, or (y) violate, conflict with, result in a breach of any
provisions of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
lien, pledge, security interest, charge or other encumbrance upon any of the
respective properties or assets of Issuer or any of its Subsidiaries under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which Issuer or any of its Subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected.
(c) AUTHORIZED STOCK. Issuer has taken all necessary corporate
and other action to authorize and reserve and to permit it to issue, and, at all
times from the date of this Agreement until the obligation to deliver Issuer
Common Stock upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, shares of Issuer Common Stock necessary
for Grantee to exercise the Option, and Issuer will take all necessary corporate
action to authorize and reserve for issuance all additional shares of Issuer
Common Stock (together with any Rights which may have been issued with respect
thereto) or other securities which may be issued pursuant to Section 7 upon
exercise of the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer Common Stock
(together with any Rights which may have been issued with respect thereto) or
other securities which may be issuable pursuant to
7
Section 7, upon issuance pursuant hereto, shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
liens, claims, charges and encumbrances of any kind or nature whatsoever
(except any such lien or encumbrance created by Grantee), including any
preemptive rights of any shareholder of Issuer.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
(a) DUE AUTHORIZATION. Grantee has corporate power and
authority to enter into this Agreement and, subject to any required regulatory
approvals or consents, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.
(b) PURCHASE NOT FOR DISTRIBUTION. This Option is not being
acquired with a view to the public distribution thereof and neither this Option
nor any Option Shares will be transferred or otherwise disposed of except in a
transaction registered or exempt from registration under the Securities Act and
applicable state and federal banking laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. (a) In the event
(i) of any change in Issuer Common Stock by reason of a stock dividend, stock
split, split-up, recapitalization, combination, exchange of shares or similar
transaction or (ii) that any Rights issued by Issuer shall become exercisable,
the type and number of shares or securities subject to the Option, and the
Purchase Price therefor, shall be adjusted appropriately, and, in the case of
any of the transactions described in clause (i) above, proper provision 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 Issuer Common Stock
if the Option had been exercised immediately prior to such event, or the record
date therefor, as applicable. If any additional shares of Issuer Common Stock
or any shares of Class B Common Stock, par value
8
$.01 per share, of Grantee (the "Class B Common Stock") are issued after the
date of this Agreement (other than pursuant to an event described in the first
sentence of this Section 7(a)), the number of shares of Issuer Common Stock
subject to the Option shall be adjusted so that, after such issuance, the
Option, together with any shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the total number of shares of Issuer Common
Stock and Class B Common Stock then issued and outstanding, without giving
effect to any shares subject or previously issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee 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 Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock and Class B Common Stock shall be changed into or
exchanged for stock or other securities of Issuer or any other person or cash or
any other property or the outstanding shares of Issuer Common Stock and Class B
Common Stock immediately prior to such merger shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the merged
company, 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 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
Grantee, of any of (I) the Acquiring Corporation (as defined below), (II) any
person that controls the Acquiring Corporation or (III) in the case of a merger
described in clause (ii), the Issuer (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
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Grantee.
9
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 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 Issuer 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
Purchase Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares of the Substitute Common Stock for which the Substitute
Option is exercisable.
(e) The following terms have the meanings indicated:
(I) "Acquiring Corporation" shall mean (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than Issuer),
(ii) Issuer in a merger in which Issuer is the continuing or surviving person,
and (iii) the transferee of all or substantially all of the Issuer's assets (or
the assets of its Subsidiaries).
(II) "Substitute Common Stock" shall mean the common stock issued by the
Substitute Option Issuer upon exercise of the Substitute Option.
(III) "Assigned Value" shall mean the highest of (i) the price per share
of Issuer Common Stock at which a tender offer or exchange offer therefor has
been made by any person (other than Grantee), (ii) the price per share of Issuer
Common Stock to be paid by any person (other than the Grantee) pursuant to an
agreement with Issuer, and (iii) the highest closing sales price per share of
Issuer Common Stock quoted on National Association of Securities Dealers, Inc.
Automated Quotation/National Market System ("NASDAQ") (or if Issuer Common Stock
is not quoted on NASDAQ, the highest bid price per share as
10
quoted on the principal trading market or securities exchange on which such
shares are traded as reported by a recognized source) within the six-month
period immediately preceding the agreement referred to in Section 7(c) hereof;
PROVIDED, HOWEVER, that in the event of a sale of all or substantially all of
Issuer'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
Issuer as determined by a nationally recognized investment banking firm selected
by Grantee or by a Grantee Majority (as defined below), divided by the number of
shares of Issuer Common Stock outstanding at the time of such sale. In the
event that an exchange offer is made for the Issuer 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 Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee (or a majority of
interest of the Grantees if there shall be more than one Grantee (a "Grantee
Majority")) and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
(IV) "Average Price" shall mean the average closing price of a share of
the Substitute Common Stock for the one year immediately preceding the
consolidation, 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 Issuer is the issuer of the
Substitute Option, the Average Price shall be computed with respect to a share
of common stock issued by Issuer, the person merging into Issuer or by any
company which controls or is controlled by such merging person, as Grantee may
elect.
(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. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares of Substitute
Common Stock but for this clause (f), the Substitute Option Issuer shall make a
cash payment to Grantee equal to the
11
excess of (i) the value of the Substitute Option without giving effect to the
limitation in this clause (f) over (ii) the value of the Substitute Option after
giving effect to the limitation in this clause (f). This difference in value
shall be determined by a nationally recognized investment banking firm selected
by Grantee (or a Grantee Majority).
(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 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 way distinguishable from or have lesser economic value
(other than any diminution in value resulting from the fact that the shares of
Substitute Common Stock may be restricted securities, as defined in Rule 144
under the Securities Act) than other shares of common stock issued by the
Substitute Option Issuer).
(h) The provisions of Sections 8, 9 and 10 shall apply to any
securities for which the Option becomes exercisable pursuant to this Section 7
and, as applicable, references in such sections to "Issuer", "Option", "Purchase
Price" and "Issuer Common Stock" shall be deemed to be references to "Substitute
Option Issuer", "Substitute Option", "Substitute Purchase Price" and "Substitute
Common Stock", respectively.
8. REPURCHASE AT THE OPTION OF GRANTEE. (a) At the request of
Grantee at any time commencing upon the first occurrence of a Repurchase Event
(as defined in Section 8(d) below) and ending 12 months immediately thereafter,
Issuer shall repurchase from Grantee (I) the Option and (II) all shares of
Issuer Common Stock purchased by Grantee pursuant hereto with respect to which
Grantee then has beneficial ownership. The date on which Grantee exercises its
rights under this Section 8 is referred to as the "Request Date". Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
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(i) the aggregate Purchase Price paid by Grantee for any
shares of Issuer Common Stock acquired pursuant to the Option with
respect to which Grantee then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Grantee
for each share of Issuer Common Stock with respect to which the Option
has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares.
(b) If Grantee exercises its rights under this Section 8, Issuer
shall, within 10 business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds by wire
transfer to a bank account designated by Grantee, and Grantee shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer Common
Stock purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Notwithstanding
anything herein to the contrary, (i) all of Grantee's rights under this Section
8 shall terminate on the date of termination of this Option pursuant to Section
3(a) hereof, unless this Option shall have been exercised in whole or part prior
to the date of termination and (ii) if this Option shall have been exercised in
whole or in part prior to the date of termination described in clause (i) above,
then Grant-
13
ee's rights under this Section 8 shall terminate 12 months after such date of
termination.
(c) For purposes of this Agreement, the "Applicable Price" means
the highest of (i) the highest price per share of Issuer Common Stock paid for
any such share by the person or group described in Section 8(d)(i) hereof, (ii)
the price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business combination transaction
described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) hereof or (iii) the highest
closing sales price per share of Issuer Common Stock quoted on NASDAQ (or if
Issuer Common Stock is not quoted on NASDAQ, 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) during the 60 business
days preceding the Request Date; PROVIDED, HOWEVER, that in the event of a sale
of less than all of Issuer'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 Issuer, as determined by a nationally recognized investment
banking firm selected by Grantee, divided by the number of shares of the Issuer
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 Grantee (or a Grantee Majority) and reasonably
acceptable to Issuer, which determination shall be conclusive for all purposes
of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any
person (other than Grantee or any of its Subsidiaries) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 under the
Exchange Act) or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) (other than Grantee or any
Subsidiary of Grantee) shall have been formed which beneficially owns or has the
right to acquire beneficial ownership of, 50% or more of the voting power of the
Issuer Common or (ii) any of the transactions described in Section 7(b)(i),
7(b)(ii) or 7(b)(iii) hereof shall be consummated.
14
9. REGISTRATION RIGHTS. Issuer shall, if requested by Grantee (or
if applicable, a Grantee Majority) at any time and from time to time within
three years of the date on which the Option first becomes exercisable, provided
that such period of time shall be extended by the number of days, if any, by
which Issuer shall delay the registration of the Issuer Common Stock pursuant to
the proviso contained at the end of this sentence, 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 Issuer Common Stock or other securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by Grantee,
including a "shelf" registration statement under Rule 415 under the Securities
Act or any successor provision, and Issuer shall use its best efforts to qualify
such shares or other securities under any applicable state securities laws;
PROVIDED, HOWEVER, that Issuer may delay for a period not to exceed 90 days
filing a registration or equivalent statement if Issuer shall in good faith
determine that (i) any such registration would adversely affect an offering or
contemplated offering of securities by Issuer or (ii) the filing of such
registration or equivalent statement would, if not so delayed, materially and
adversely affect a then proposed or pending financial project, acquisition,
merger or corporate reorganization; and PROVIDED FURTHER, that nothing contained
herein shall limit or adversely affect in any manner Grantee's rights contained
in the fourth following sentence hereof. Issuer shall use its best 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 not in excess of 180 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. Any registration
or similar statement prepared and filed under this Section 9, and any sale
covered thereby, shall be at Issuer's expense except for underwriting discounts
or commissions, brokers' fees and the fees and disbursements of Grantee's
counsel related thereto. Grantee shall provide all information reasonably
requested by Issuer for inclusion in any registration or similar statement to be
filed hereunder. If during the time
15
periods referred to in the first sentence of this Section 9 Issuer effects a
registration under the Securities Act of Issuer Common Stock for its own account
or for any other shareholder of Issuer (other than on Form S-4 or Form S-8, or
any successor forms or any form with respect to a dividend reinvestment or
similar plan), it shall allow Grantee the right to participate in such
registration, and such participation shall not affect the obligation of Issuer
to effect two registration statements for Grantee under this Section 9;
PROVIDED, HOWEVER, that, if the managing underwriters of such offering advise
Issuer in writing that in their opinion the number of shares of Issuer Common
Stock requested by Grantee to be included in such registration, together with
the shares of Issuer Common Stock proposed to be included in such registration,
exceeds the number which can be sold in such offering, Issuer shall include the
shares requested to be included therein by Grantee pro rata with the shares
intended to be included therein by Issuer. In connection with any registration
pursuant to this Section 9, Issuer and Grantee shall provide each other and any
underwriter of the offering with customary representations, warranties,
covenants, indemnification and contribution in connection with such
registration. Notwithstanding anything to the contrary contained herein, Issuer
shall not be required to register Option Shares pursuant to this Section 9(i)
prior to the occurrence of a Triggering Event, (ii) within 90 days after the
effective date of a registration referred to in the second preceding sentence
pursuant to which Grantee was afforded the opportunity to register Option Shares
and such shares were registered as requested, (iii) unless a request therefor is
made to Issuer by a Grantee or Grantees which hold at least 25% of the aggregate
number of Option Shares (including shares of Issuer Common Stock upon exercise
of the Option) then outstanding and (iv) on more than two occasions by reason of
the fact that there shall be more than one Grantee as a result of any assignment
of this Agreement or division of this Agreement pursuant to Section 11 hereof.
10. LISTING. If Issuer Common Stock or any other securities to be
acquired upon exercise of the Option are then authorized for quotation on NASDAQ
or any securities exchange, Issuer, upon the request of Grantee, will promptly
file an application to authorize for quotation the shares of Issuer Common Stock
or other securi-
16
ties to be acquired upon exercise of the Option on NASDAQ or such other
securities exchange and will use its best efforts to obtain approval of such
listing as soon as practicable.
11. DIVISION OF OPTION. Upon the occurrence of a Triggering Event,
this Agreement (and the Option granted hereby) are 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 of Issuer Common Stock 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, 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. RIGHTS AGREEMENT. Issuer shall not approve, adopt or amend, or
propose the approval and adoption or amendment of, any Shareholder Rights Plan
unless such Shareholder Rights Plan contains terms which provide, to the
reasonable satisfaction of Grantee, that (a) the Rights issued pursuant thereto
will not become exercisable by virtue of the fact that (i) Grantee is, or may be
deemed to be, the Beneficial Owner of shares of Issuer Common Stock (x) acquired
or acquirable pursuant to the grant or exercise of this Option and (y) held by
Grantee or any of its Subsidiaries as in a fiduciary capacity or in respect of a
debt previously contracted or (ii) while Grantee is the Beneficial Owner of the
shares of Issuer Common Stock described in clause (a)(i), an Acquisition
Transaction involving Issuer or any of its Subsidiaries, on the one hand, and
Grantee, or any of its Subsidiaries, on the other hand, is proposed, agreed to
or consummated and (b) no restrictions or limitations with respect to
17
the exercise of any Rights acquired or acquirable by Grantee will result or be
imposed to the extent such Rights relate to the shares of Issuer Common Stock
described in clause (a) of this Section 12. This covenant shall survive for so
long as Grantee is the Beneficial Owner of the shares of Issuer Common Stock
described in clause (a) of this Section 12.
13. MISCELLANEOUS. (a) EXPENSES. Except as otherwise provided
herein, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY.
This Agreement, together with the Merger Agreement and the other agreements and
instruments referred to herein and therein, (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. Notwithstanding anything to the contrary contained in this
Agreement or the Merger Agreement, this Agreement shall be deemed to amend the
confidentiality agreement, dated as of November 26, 1996, between Issuer and
Grantee so as to permit Grantee to enter into this Agreement and exercise all of
its rights hereunder, including its right to acquire Issuer Common Stock upon
exercise of the Option. 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
18
permit Grantee to acquire the full number of shares of Issuer Common Stock as
provided in Section 3 hereof (as adjusted pursuant to Section 7 hereof), it is
the express intention of Issuer to allow Grantee to acquire 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 New York without regard to
any applicable conflicts of law rules thereof.
(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 if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to Issuer to:
Xxxxxxx Xxxxx, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Xx.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, III, Esq.
If to Grantee to:
Oxford Resources Corp.
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
with a copy to:
19
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(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, it being understood that both parties need not sign the same
counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and after the occurrence of a
Triggering Event Grantee may assign its rights under this Agreement to one or
more third parties. 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. As used in this Agreement, Grantee
shall include any person to whom this Agreement or the Option shall be assigned
by a previous Grantee in accordance with the terms hereof.
(i) 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.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. 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.
(k) NO LIMITATION OF REMEDIES. Nothing herein shall be deemed
to limit any claim that Grantee may have against Issuer for any willful breach
by Issuer of any provision of the Merger Agreement.
20
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 the day and year first written above.
OXFORD RESOURCES CORP.
By /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
XXXXXXX XXXXX, INC.
By /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Exec. Vice President
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