Exhibit 3
TRANSLATION
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SERIES "B" STOCK OPTION AGREEMENT
SERIES "B" STOCK OPTION AGREEMENT, dated as of August 4, 1994,
(this "Agreement)", between, Banco Nacional de Mexico, S.A., Institucion de
Credito, Group Financiero Banamex Accival (the "Grantor") organized under
the laws of the United Mexican States ("Mexico"), as trustee, under Trust
Agreement No. 12-816-1, dated August 4, 1994 (the "Trust Agreement"); and
InverMexico, S.A. de C.V., Casa de Bolsa, Grupo Financiero InverMexico, a
Financial Institution organized in accordance with Mexican laws
(hereinafter "InverMexico").
DECLARATIONS
I. The Grantor declares:
(a) That it is empowered to carry out this Agreement in
accordance with the regulations of Section XV of Article
46 of the Credit Institutions Law.
(b) That on August 4, 1994, in its capacity as trustee it
entered into with ASARCO Incorporated, ASARCO de Mexico
(Delaware) Inc., ASARCO (Delaware) Incorporated and
Mexican Mine Holdings, Inc., as Beneficiaries, the Trust
Agreement by which 62,104,386 ordinary shares, Series
"B," Class I representative of the capital stock of Grupo
Mexico, S.A. de C. V. (hereinafter "Grupo Mexico") which
they owned, were irrevocably and definitively
transferred, for the purpose of granting InverMexico the
option contained in this Agreement. A copy of such
Agreement is attached hereto as Annex "4," and it is an
integral part of this Agreement.
(c) That on January 21, 1994, Group Industrial Minera Mexico,
S.A. de C.V. and Mexico Desarrollo Industrial Xxxxxx,
X.X. de C.V. entered into a Reorganization Agreement,
(the "Reorganization Agreement") with ASARCO Incorporated
(hereinafter "ASARCO") and Mexican Mine Holdings, Inc.
(hereinafter "MMH"), pursuant to Clause SIXTH of which,
the Grantors agreed to grant to the Series A shareholders
of Grupo Industrial Minera Mexico, S.A. de C.V.
("GIMMSA"), or their designees (who, pursuant to the
Reorganization Agreement, accept the public reciprocal
offer indicated in paragraph "c"), an irrevocable option
to purchase, in whole or in part, the 62,104,386 Series
"B" shares of Grupo Mexico retained by the Grantors
pursuant to the Reorganization Agreement (such shares
being hereinafter referred to as the "Option Shares").
(d) That it has the absolute disposition of the Option Shares
to dispose of and deliver, without judicial intervention,
at the time in which InverMexico exercises totally or
partially the option contained in this Agreement, and
InverMexico pays the exercise price in accordance with
the terms of this Agreement.
(e) That its representatives, who appear in its name and on
its behalf are empowered as necessary to bind the Grantor
to the terms of this Agreement, without such power having
been revoked or limited in any manner.
II. InverMexico declares:
(a) That it was legally incorporated through public deed 7765
granted April 27, 1973, before Lic. Xxxx X. Xxxx y
Xxxxxxxxx, Notary Public 102 of the Federal District,
subscribed in the Public Registry of Commerce of the same
locality, under number 23, page 32 of volume 877, Third
book, on June 23, 1973, and presently inscribed in
commercial file 4744 of the same Registry.
(b) That it is the beneficiary of the option contained in
this Agreement under the terms of the Trust Agreement
mentioned in Declaration I (b) of this Agreement.
(c) That its representatives, who appear in its name and on
its behalf are empowered as necessary to bind it to the
terms of this Agreement, without such power having been
revoked or limited in any manner.
IN WITNESS WHEREOF, and as a result of the obligations and agreements
herein established, the parties hereto agree as follows:
CLAUSES
1. GRANT OF OPTION.
The Trustee hereby grants to InverMexico an irrevocable option (the
"Option") to purchase, at any time or times, during the Option term, all or
part of the Option Shares, at the exercise price of U.S. $1.40 (One dollar
and Forty Cents) per share payable in United States dollars, and if that is
not possible, in accordance with Mexican laws or regulations, then the
payment of the Exercise Price shall be the rate of exchange quoted by Banco
Nacional de Mexico, S.A., Bancomer, S.A. and Banca Serfin, S.A. for the
sale of dollars to third parties on the day of the payment, in this last
instance, or in its absence, but only within the last two months of the
effectiveness of the Option including the expiration day at the rate of
exchange that is established by the Mexican federal government to satisfy
obligations in foreign currency and in immediately available funds, in the
domicile of Grantor in Mexico City, Federal District (the "Exercise
Price"), subject to the terms and conditions of this Agreement. For the
grant of the Option there shall be no premium, commission or consideration
except the Exercise Price.
2. OPTION TERM.
The Option may be exercised during business hours on any business day
commencing on August 11, 1994, and ending on August 11, 2001 (the "Option
Term"). The term "business day" means any day on which banking institutions
and stock exchanges in the Cities of Mexico, Federal District and New York,
New York are open for business.
3. MANNER OF EXERCISE.
(a) InverMexico may exercise the Option by delivering an original
signed Option Exercise Form, which shall be not earlier than five business
days, however, in the last month of the term the Option, two business days,
prior to the exercise of the Option, in which it states its acceptance of
the purchase and specifies the number of Option Shares exercised on such
occasion and the date on which the delivery of such shares shall be
complete and the respective price (hereinafter, the "Date of Delivery"). On
the Date of Delivery, InverMexico shall transfer payment in full of the
Exercise Price for the number of Trust Shares as to which the Option is
exercised, in United States dollars, and if that is not possible, in
accordance to Mexican laws or regulations, then the payment of the Exercise
Price shall be the rate of exchange quoted by Banco Nacional de Mexico,
S.A., Bancomer, S.A. and Banca Serfin, S.A. for the sale of dollars to
third parties on the day of the payment, in this last instance, or in its
absence, but only within the last two months of the term of the Option,
including the expiration day, at the rate of exchange that is established
by the Mexican federal government to satisfy obligations in foreign
currency and in immediately available funds. Against receipt of the
Exercise Price the Grantor shall deliver to InverMexico the certificates or
titles representing the number of Option Shares exercised in accordance
with paragraph (a) properly endorsed, or through its transfer in its
account at S.D. Indeval, S.A. de C.V.
(b) The parties shall pay as it corresponds to each their share of
taxes derived from the transfer of the Option Shares or any other taxes or
charges applicable and payable relating to the exercise of such Option, in
total or in part, or by the delivery of the Option Shares resulting from
the exercise of the same.
(c) Redelivery of Remaining Shares. Any remaining Trust Shares as to
which the Option shall not have been exercised within the Option Term which
terminates on August 11, 2001, shall be free from any restriction
established in this Agreement in favor of the Grantor, in order for the
same, acting as the trustee, to proceed in accordance with the Trust
Agreement.
(d) Notation of Partial Exercise. Notation of any partial exercise of
the Option shall be made by the Grantor on Schedule I attached hereto.
4. ADJUSTMENT OF TRUST SHARES IN CERTAIN EVENTS.
(a) Stock Dividends or Stock Splits. In the event that as a result of
stock dividends or splits the Grantor as trustee and the holder of the
Option Shares, receives additional shares (hereinafter, the "New Shares")
of Grupo Mexico as a result of share dividends, splits, profit
capitalization or other entries capitalized of the net profits of Grupo
Mexico (not requiring any consideration), the following is agreed:
(i) All New Shares received by the Grantor, shall be subject to the
Option under the terms of this Agreement.
(ii) The Exercise Price for the Option Shares shall be the amount
resulting from subtracting from the sum received by ASARCO and MMH after
the exercise of any part of the Option, from U.S. $86,946,140.40 and
dividing the remainder by the number of Trust Shares then subject to the
Option.
(b) Cash Dividends.
In the event cash dividends are declared on the Option Shares, the
Exercise Price or the number of Option Shares shall not be modified.
(c) Merger and Scission.
In the event of merger or scission of Grupo Mexico, the securities
resulting shall correspond in all cases to the Option Shares and shall be
subject to the terms of the same without an adjustment to the Exercise
Price, as long as the shareholders were not required to contribute
additional capital.
5. ASSIGNMENTS.
This Agreement and the rights derived from the Option may be assigned
by InverMexico or by any other assignee of InverMexico at any time with
respect to the part of the Option not yet exercised, without requiring the
consent of the Grantor only to persons controlled, directly or indirectly,
by InverMexico, or trusts created by InverMexico or any other entity agreed
to by the majority of shareholders of Series "B" shares of Grupo Mexico,
however, such assignment shall, in all cases apply to the entire Option and
it shall not be subdivided. In its event, for the assignment of all rights
derived from the Option and this Agreement, except its assignment to the
cover trust that shall be created by InverMexico, in Banco Mexicano, S.A.
Trust Division No. F-321260, the consent of the common agent of the holders
of the option certificate issued by InverMexico on the shares of Grupo
Mexico (GMX 098E EC001).
Subject to the provisions contained in paragraph one of this Clause,
the Grantor is obligated to recognize as valid any assignment of this
Agreement and the rights derived from the Option as long as the assignment
is carried out under an assignment agreement under the terms of Annex "2"
of this Agreement and such assignment is notified to the Grantor in
accordance with the form of notice attached hereto as Annex "3". Any
assignment shall release InverMexico of all obligations to the Grantor
under the terms of the present Agreement, and it shall not have any
liability with respect to the obligations assumed by the assignee who shall
be considered a party to this Agreement as if it were a signatory of the
original in place of InverMexico and any reference to InverMexico under
this Agreement shall be considered as referring to the assignee.
The Grantor waives, for the benefit of the assignee of InverMexico or
any other assignee (as the case may be) who could exercise the Option in
total or part, to any right to compensation or any other defense that it
may have with respect to obligations derived from this Agreement against
InverMexico or any other prior assignee (as the case may be), with the
understanding that such waiver is not intended to include any right to
compensation or defense the Grantor holds by its relationship with the
persons who effectively exercise the Option totally or partially.
6. NOTICE.
All notices, summons, claims or communications in relation to this
Agreement, must be made in writing delivered, or transmitted by telefax or
telex to the respective domiciles of the parties as follows:
The Grantor: Paseo de la Reforma 404, 14th Floor
Col. Xxxxxx
X.X. 00000 Xxxxxx, D.F.
Att'n: Lic. Xxxxxxxx Xxxxxx de Oca Peregrina
InverMexico: Reforma 211, 4th Floor
Col. Xxxxxxxxxx
X.X. 00000 Xxxxxx, D.F.
Att'n: Lic. Xxxxxx Xxxxx Checa
or any other domicile of which either party shall notify the other in
writing, with the understanding that notices of change in domicile shall be
effective upon receipt by the other party. The party giving notice shall
obtain some evidence that the notice was received.
7. AMENDMENT.
This Agreement shall not be amended, altered or supplemented, except
by a written agreement signed by the parties hereto.
8. SEVERABILITY.
If any provision of this Agreement shall be invalid, illegal or
unenforceable by reason of any applicable law or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic and legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to
the person that would have benefitted from such invalid, illegal or
unenforceable term or provision.
9. APPLICABLE LAW.
This Agreement shall be governed and construed in accordance with the
applicable laws of the United Mexican States.
10. JURISDICTION.
Any controversy, claim or complaint arising out of or in connection
with this Agreement's interpretation, adherence, validity or enforceability
of the same, which the parties cannot resolve amicably, shall be resolved
definitively and compulsorily by arbitration in accordance with the terms
of Title Four of the Mexican Commerce Code.
In accordance with Articles 1416 and 1426 of the Mexican Commerce
Code, the arbitration shall be conducted before an arbitration panel of the
independent arbiters. Each of the parties to the conflict shall designate
one arbiter and the third shall be designated by the two arbiters
designated by the parties. In the event the third arbiter is not designated
within the thirty days following the date on which either party notifies
the other of its intention to submit the conflict in question to
arbitration, such third arbiter shall be designated by the Chamber of
Commerce of the Federal District. The place of arbitration shall be Mexico
City, Federal District. The arbitration shall be conducted in Spanish
according to the procedures established in Title Four of the Commerce Code.
Each of the parties acknowledges that any arbitrated finding can be
executed in any competent court, and waives any rights to appeal it may
have.
11. COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
12. HEADINGS.
The headings or captions in each of the sections of this Agreement
are included as reference only and do not affect or modify the meaning or
interpretation of each of the sections.
IN WITNESS WHEREOF, the Grantor and InverMexico have caused this
Agreement to be executed on the day and year established in the first
paragraph hereof.
Annexed to this Agreement are: 1) Notations as to Partial Exercise,
2) Copy of the Assignment Agreement, and 3) Copy of the Notice of
Assignment.
BANCO NACIONAL DE MEXICO, S.A.
TRUST DIVISION
GRUPO FINANCIERO BANAMEX ACCIVAL
By __________________________________
Lic. Xxxxxxxx Xxxxxx de Oca Peregina
Title: Trust Representative
INVERMEXICO, S.A. de C.V.,
CASA DE BOLSA
GRUPO FINANCIERO INVERMEXICO
By __________________________________
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Title: Attorney in Fact
