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EXHIBIT 10.1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 21, 1997 (the
"Agreement"), between AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation
(the "Grantee"), and AMERICAN BANKERS INSURANCE GROUP, INC., a Florida
corporation (the "Grantor").
WHEREAS, the Grantee, AIGF, INC., a Florida corporation and a wholly
owned subsidiary of the Grantee ("Newco"), and the Grantor are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, for the merger of the Grantor
with and into Newco (the "Merger");
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, the Grantee and Newco have requested that the Grantor grant to
the Grantee an option to purchase up to 8,265,626 shares of Common Stock, par
value $1.00 per share, of the Grantor (the "Common Stock"), upon the terms and
subject to the conditions hereof; and
WHEREAS, in order to induce the Grantee and Newco to enter into the
Merger Agreement, the Grantor is willing to grant the Grantee the requested
option.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments; Payment of Spread. (a)
Contemporaneously herewith the Grantee, Newco and the Grantor are entering into
the Merger Agreement. Subject to the other terms and conditions set forth
herein, the Grantor hereby grants to the Grantee an irrevocable option (the
"Option") to purchase up to 8,265,626 shares of Common Stock (the "Shares") at a
cash purchase price equal to $47.00 per share (the "Purchase Price"). The Option
may be exercised by the Grantee, in whole or in part, at any time, or from time
to time, following the occurrence of one of the events set forth in Section 2(d)
hereof, and prior to the termination of the Option in accordance with the terms
of this Agreement.
(b) In the event the Grantee wishes to exercise the Option, the
Grantee shall send a written notice to the Grantor (the "Stock Exercise Notice")
specifying a date (subject to the HSR Act (as defined below) and applicable
insurance regulatory approvals) not later than 10 business
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days and not earlier than three business days following the date such notice is
given for the closing of such purchase. In the event of any change in the number
of issued and out standing shares of Common Stock by reason of any stock
dividend, stock split, split-up, recapitalization, merger or other change in the
corporate or capital structure of the Grantor, the number of Shares subject to
this Option and the purchase price per Share shall be appropriately adjusted to
restore the Grantee to its rights hereunder, including its right to purchase
Shares representing 19.9% of the capital stock of the Grantor entitled to vote
generally for the election of the directors of the Grantor which is issued and
outstanding immediately prior to the exercise of the Option at an aggregate
purchase price equal to the Purchase Price multiplied by 8,265,626.
(c) If at any time the Option is then exercisable pursuant to the
terms of Section 1(a) hereof, the Grantee may elect, in lieu of exercising the
Option to purchase Shares provided in Section 1(a) hereof, to send a written
notice to the Grantor (the "Cash Exercise Notice") specifying a date not later
than 20 business days and not earlier than 10 business days following the date
such notice is given on which date the Grantor shall pay to the Grantee an
amount in cash equal to the Spread (as hereinafter defined) multiplied by all or
such portion of the Shares subject to the Option as Grantee shall specify. As
used herein "Spread" shall mean the excess, if any, over the Purchase Price of
the higher of (x) if applicable, the high est price per share of Common Stock
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid or proposed to be paid by any person pursuant to one of the
transactions enumerated in Section 2(d) hereof (the "Alternative Purchase
Price") or (y) the closing price of the shares of Common Stock on the NYSE
Composite Tape on the last trading day immediately prior to the date of the Cash
Exercise Notice (the "Closing Price"). If the Alternative Purchase Price
includes any property other than cash, the Alternative Purchase Price shall be
the sum of (i) the fixed cash amount, if any, included in the Alternative
Purchase Price plus (ii) the fair market value of such other property. If such
other property consists of securities with an existing public trading market,
the average of the closing prices (or the average of the closing bid and asked
prices if closing prices are unavailable) for such securities in their principal
public trading market on the five trading days ending five days prior to the
date of the
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Cash Exercise Notice shall be deemed to equal the fair market value of such
property. If such other property consists of something other than cash or
securities with an existing public trading market and, as of the payment date
for the Spread, agreement on the value of such other property has not been
reached, the Alternative Purchase Price shall be deemed to equal the Closing
Price. Upon exercise of its right to receive cash pursuant to this Section 1(c),
the obligations of the Grantor to deliver Shares pursuant to Section 3 shall be
terminated with respect to such number of Shares for which the Grantee shall
have elected to be paid the Spread.
2. Conditions to Delivery of Shares. The Grantor's obligation to
deliver Shares upon exercise of the Option is subject only to the conditions
that:
(a) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Shares shall be in effect; and
(b) Any applicable waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") shall have expired or
been terminated; and
(c) Any approval required to be obtained prior to the delivery of
the Shares under the insurance laws of any state or foreign jurisdiction
shall have been obtained and be in full force and effect; and
(d) (i) any person (other than Grantee or any of its subsidiaries)
shall have commenced (as such term is defined in Rule 14d-2 under the
Securities Exchange Act of 1934 (the "Exchange Act") a tender offer, or
shall have filed a registration statement under the Securities Act of 1933
(the "Securities Act") with respect to an exchange offer, to purchase any
shares of Common Stock such that, upon consummation of such offer, such
person or a "group" (as such term is defined under the Exchange Act) of
which such person is a member shall have acquired beneficial ownership (as
such term is defined in rule 13d-3 of the
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Exchange Act), or the right to acquire beneficial ownership, of 15 percent
or more of the then outstanding Common Stock; (ii) any person (other than
Grantee or any of its subsidiaries) shall have publicly announced or
delivered to Grantor a proposal, or disclosed publicly or to Grantor an
intention to make a proposal, to purchase 15% or more of the assets or any
equity securities of, or to engage in a merger, reorganization, tender
offer, share exchange, consolidation or similar transaction involving the
Grantor or any of its subsidiaries (an "Acquisition Transaction"); (iii)
Grantor or any of its subsidiaries shall have authorized, recommended,
proposed or publicly announced an intention to authorize, recommend or
propose, or entered into, an agreement, including without limitation, an
agreement in principle, with any person (other than Grantee or any of its
subsidiaries) to effect or provide for an Acquisition Transition; (iv) any
person shall solicit proxies or consents or announce a bona fide intention
to solicit proxies or consents from Grantor's stockholders (x)relating to
directors, (y) in opposition to the Merger, the Merger Agreement or any
related transactions or (z) relating to an Acquisition Transaction (other
than solicitations of stockholders seeking approval of the Merger, the
Merger Agreement or any related transactions); or (v) any person (other
than Grantee or any of its subsidiaries) shall have acquired beneficial
ownership (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) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of,
shares of Common Stock (other than trust account shares) aggregating 15
percent or more of the then outstanding Common Stock. As used in this
Agreement, "person" shall have the meaning specified in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act.
3. The Closing. (a) Any closing hereunder shall take place on the
date specified by the Grantee in its Stock Exercise Notice or Cash Exercise
Notice, as the case may be, at 9:00 A.M., local time, at the offices of ▇▇▇▇▇▇▇▇
&
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or, if the conditions set forth
in Section 2(a), (b) or (c) have not then been satisfied, on the second business
day following the satisfaction of such conditions, or at such other time and
place as the parties hereto may agree (the "Closing Date"). On the Closing Date,
(i) in the event of a closing pursuant to Section 1(b) hereof, the Grantor will
deliver to the Grantee a certificate or certificates, representing the Shares in
the denominations designated by the Grantee in its Stock Exercise Notice and the
Grantee will purchase such Shares from the Grantor at the price per Share equal
to the Purchase Price or (ii) in the event of a closing pursuant to Section 1(c)
hereof, the Grantor will deliver to the Grantee cash in an amount determined
pursuant to Section 1(c) hereof. Any payment made by the Grantee to the Grantor,
or by the Grantor to the Grantee, pursuant to this Agreement shall be made by
certified or official bank check or by wire transfer of federal funds to a bank
designated by the party receiving such funds.
(b) The certificates representing the Shares shall bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
4. Representations and Warranties of the Grantor. The Grantor
represents and warrants to the Grantee that (a) the Grantor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida and has the requisite corporate power and authority to enter
into and perform this Agreement; (b) the execution and delivery of this
Agreement by the Grantor and the con summation by it of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Grantor and this Agreement has been duly executed and delivered by a duly
authorized officer of the Grantor and constitutes a valid and binding obligation
of the Grantor, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; (c) the Grantor has taken all necessary corporate action to
authorize and reserve the Shares issuable upon exercise of the Option and the
Shares, when issued and delivered by the Grantor upon exercise of the Option and
paid for by Grantee as contemplated hereby, will be duly authorized, validly
issued, fully paid and non-
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assessable and free of preemptive rights; (d) except as otherwise required by
the HSR Act and applicable insurance laws, the execution and delivery of this
Agreement by the Grantor and the consummation by it of the transactions
contemplated hereby do not require the consent, waiver, approval or
authorization of or any filing with any person or public authority and will not
violate, result in a breach of or the acceleration of any obligation under, or
constitute a default under, any provision of Grantor's charter or by-laws, or
any material indenture, mortgage, lien, lease, agreement, contract, instrument,
order, law, rule, regulation, judgment, ordinance, or decree, or restriction by
which the Grantor or any of its subsidiaries or any of their respective
properties or assets is bound; (e) no "fair price", "moratorium", "control share
acquisition," "interested shareholder" or other form of antitakeover statute or
regulation, including without limitation, Sections 607.0901 or 607.0902 of the
Florida Business Corporation Act, or similar provision contained in the charter
or by-laws of Grantor, including without limitation, Article VIII of Grantor's
Third Amended and Restated Articles of Incorporation, is or shall be applicable
to the acquisition of Shares pursuant to this Agreement; and (f) the Grantor has
taken all corporate action necessary so that any Shares acquired pursuant to
this Agreement shall not be counted for purposes of determining the number of
shares of Common Stock beneficially owned by the Grantee or any of its
Affiliates or Associates (as such terms are defined in the Rights Agreement)
pursuant to the Rights Agreement, as amended and restated on November 14, 1990,
as amended on December 19, 1997, between the Grantor and ChaseMellon Shareholder
Services, LLC (as successor to Manufacturers Hanover Trust Company), as Rights
Agent (the "Rights Agreement").
5. Representations and Warranties of the Grantee. The Grantee
represents and warrants to the Grantor that (a) the execution and delivery of
this Agreement by the Grantee and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Grantee and this Agreement has been duly executed and
delivered by a duly authorized officer of the Grantee and constitutes a valid
and binding obligation of Grantee; and (b) the Grantee is acquiring the Option
and, if and when it exercises the Option, will be acquiring the Shares issuable
upon the exercise thereof for its own account and not with a view to
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distribution or resale in any manner which would be in violation of the
Securities Act.
6. Listing of Shares; Filings; Governmental Consents. Subject to
applicable law and the rules and regulations of the New York Stock Exchange,
Inc. (the "NYSE"), the Grantor will promptly file an application to list the
Shares on the NYSE and will use its reasonable best efforts to obtain approval
of such listing and to effect all necessary filings by the Grantor under the HSR
Act and the applicable insurance laws of each state and foreign jurisdiction;
provided, however, that if the Grantor is unable to effect such listing on the
NYSE by the Closing Date, the Grantor will nevertheless be obligated to deliver
the Shares upon the Closing Date. Each of the parties hereto will use its
reasonable best efforts to obtain consents of all third parties and governmental
authorities, if any, necessary to the consummation of the transactions
contemplated.
7. Repurchase of Shares. If by the date that is the first
anniversary of the date the Merger Agreement was terminated pursuant to the
terms thereof (the "Merger Termination Date"), neither the Grantee nor any other
Person has acquired more than fifty percent (excluding the Shares) of the shares
of outstanding Common Stock, then the Grantor has the right to purchase (the
"Repurchase Right") all, but not less than all, of the Shares at the greater of
(i) the Purchase Price or (ii) the average of the last sales prices for shares
of Common Stock on the five trading days ending five days prior to the date the
Grantor gives written notice of its intention to exercise the Repurchase Right.
If the Grantor does not exercise the Repurchase Right within thirty days
following the end of the one year period after the Merger Termination Date, the
Repurchase Right lapses. In the event the Grantor wishes to exercise the
Repurchase Right, the Grantor shall send a written notice to the Grantee
specifying a date (not later than 20 business days and not earlier than 10
business days following the date such notice is given) for the closing of such
purchase.
8. Sale of Shares. At any time prior to the first anniversary of the
Merger Termination Date, the Grantee shall have the right to sell (the "Sale
Right") to the Grantor all, but not less than all, of the Shares at the greater
of (i) the Purchase Price, or (ii) the average of the last sales prices for
shares of Common Stock on the five
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trading days ending five days prior to the date the Grantee gives written notice
of its intention to exercise the Sale Right. If the Grantee does not exercise
the Sale Right prior to the first anniversary of the Merger Termination Date,
the Sale Right terminates. In the event the Grantee wishes to exercise the Sale
Right, the Grantee shall send a written notice to the Grantor specifying a date
not later than 20 business days and not earlier than 10 business days following
the date such notice is given for the closing of such sale.
9. Registration Rights. (a) In the event that the Grantee shall
desire to sell any of the Shares within three years after the purchase of such
Shares pursuant here to, and such sale requires, in the opinion of counsel to
the Grantee, which opinion shall be reasonably satisfactory to the Grantor and
its counsel, registration of such Shares under the Securities Act, the Grantor
will cooperate with the Grantee and any underwriters in registering such Shares
for resale, including, without limitation, promptly filing a registration
statement which complies with the requirements of applicable federal and state
securities laws, and entering into an underwriting agreement with such under
writers upon such terms and conditions as are customarily contained in
underwriting agreements with respect to secondary distributions; provided that
the Grantor shall not be required to have declared effective more than two
registration statements hereunder and shall be entitled to delay the filing or
effectiveness of any registration statement for up to 60 days if the offering
would, in the judgment of the Board of Directors of the Grantor, require
premature disclosure of any material corporate development or material
transaction involving the Grantor or interfere with any previously planned
securities offering by the Company.
(b) If the Common Stock is registered pursuant to the provisions of
this Section 9, the Grantor agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as the Grantee may from time to time reasonably request and (ii) if any
event shall occur as a result of which it becomes necessary to amend or
supplement any registration statement or prospectus, to prepare and file under
the applicable securities laws such amendments and supplements as may be
necessary to keep available for at least 45 days a prospectus covering the
Common Stock meeting
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the requirements of such securities laws, and to furnish the Grantee such
numbers of copies of the registration statement and prospectus as amended or
supplemented as may reasonably be requested. The Grantor shall bear the cost of
the registration, including, but not limited to, all registration and filing
fees, printing expenses, and fees and disbursements of counsel and accountants
for the Grantor, except that the Grantee shall pay the fees and disbursements of
its counsel, and the underwriting fees and selling commissions applicable to the
shares of Common Stock sold by the Grantee. The Grantor shall indemnify and hold
harmless (i) Grantee, its affiliates and its officers and directors and (ii)
each underwriter and each person who controls any underwriter within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended
(collectively, the "Underwriters") ((i) and (ii) being referred to as
"Indemnified Parties") against any losses, claims, damages, liabilities or
expenses, to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
registration statement filed pursuant to this paragraph, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Grantor will not be liable in any such
case to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any such documents in reliance upon and
in conformity with written information furnished to the Grantor by the
Indemnified Parties expressly for use or incorporation by reference therein.
(c) The Grantee and the Underwriters shall indemnify and hold
harmless the Grantor, its affiliates and its officers and directors against any
losses, claims, damages, liabilities or expenses to which the Grantor, its
affiliates and its officers and directors may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement of any material
fact contained or incorporated by reference in any registration statement filed
pursuant to this paragraph, or arise out of or are based upon the omission or
alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Grantor by the Grantee or
the Underwriters, as applicable, specifically for use or incorporation by
reference therein.
10. Expenses. Each party hereto shall pay its own expenses incurred
in connection with this Agreement, except as otherwise specifically provided
herein.
11. Specific Performance. The Grantor acknowledges that if the
Grantor fails to perform any of its obligations under this Agreement immediate
and irreparable harm or injury would be caused to the Grantee for which money
damages would not be an adequate remedy. In such event, the Grantor agrees that
the Grantee shall have the right, in addition to any other rights it may have,
to specific performance of this Agreement. Accordingly, if the Grantee should
institute an action or proceeding seeking specific enforcement of the provisions
hereof, the Grantor hereby waives the claim or defense that the Grantee has an
adequate remedy at law and hereby agrees not to assert in any such action or
proceeding the claim or defense that such a remedy at law exists. The Grantor
further agrees to waive any requirements for the securing or posting of any bond
in connection with obtaining any such equitable relief.
12. Notice. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or delivered
by registered or certified mail, return receipt requested, or if sent by
facsimile transmission, upon receipt of oral confirmation that such transmission
has been received, to the person at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such
person:
If to the Grantee:
American International Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attn: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Grantor:
American Bankers Insurance Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Jorden ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
13. Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties named herein and their respective successors
and assigns; provided, however, that such successor in interest or as signs
shall agree to be bound by the provisions of this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the Grantor or the Grantee, or their successors or assigns, any rights or
remedies under or by reason of this Agreement.
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14. Entire Agreement; Amendments. This Agreement, together with the
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but may be changed
only by an agreement in writing signed by the party against whom any waiver,
change, amendment, modification or discharge may be sought.
15. Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, except that the Grantee may assign its rights and
obligations hereunder to any of its direct or indirect wholly owned
subsidiaries (including Newco), but no such transfer shall relieve the Grantee
of its obligations hereunder if such transferee does not perform such
obligations.
16. Headings. The section headings herein are for convenience only
and shall not affect the construction of this Agreement.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware(regardless of the laws that
might other wise govern under applicable Delaware principles of conflicts of
law).
THE GRANTOR AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR
PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
AND AGREES TO VENUE IN SUCH COURTS. THE GRANTOR HEREBY APPOINTS THE SECRETARY OF
THE GRANTOR AS ITS AGENT FOR SERVICE OF PROCESS FOR PURPOSES OF THE FOREGOING
SENTENCE ONLY.
19. Termination. The right to exercise the Option granted pursuant
to this Agreement shall terminate at the earlier of (i) the Effective Time (as
defined in the
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Merger Agreement); (ii) 90 days after the Merger Termination Date (the date
referred to in clause (ii) being hereinafter referred to as the "Option
Termination Date") and, (iii) 18 months after the date hereof; provided that, if
the Option cannot be exercised or the Shares cannot be delivered to Grantee upon
such exercise because the conditions set forth in Section 2(a), (b) or (c)
hereof have not yet been satisfied, the Option Termination Date shall be
extended until thirty days after such impediment to exercise or delivery has
been removed.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
20. Profit Limitation. (a) Notwithstanding any other provision of
this Agreement, in no event shall the Grantee's Total Profit (as hereinafter
defined) exceed $66 million and, if it otherwise would exceed such amount, the
Grantee, at its sole election, shall either (a) deliver to the Grantor for
cancellation Shares previously purchased by Grantee, (b) pay cash or other
consideration to the Grantor or (c) undertake any combination thereof, so that
Grantee's Total Profit shall not exceed $66 million after taking into account
the foregoing actions.
Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of Shares as would, as of the date of the
Stock Exercise Notice, result in a Notional Total Profit (as defined below) of
more than $66 million and, if exercise of the Option otherwise would exceed such
amount, the Grantee, at its discretion, may increase the Purchase Price for that
number of Shares set forth in the Stock Exercise Notice so that the Notional
Total Profit shall not exceed $66 million; provided, that nothing in this
sentence shall restrict any exercise of the Option permitted hereby on any
subsequent date at the Purchase Price set forth in Section 1(a) hereof.
As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section 8.5 of the Merger Agreement and Section 1(c) hereof,
(ii) (x) the amount received by Grantee pursuant to the Grantor's repurchase of
Shares pursuant to Sections 7 or 8 hereof, less (y) the Grantee's purchase price
for such Shares, and (iii) (x) the net cash amounts received by
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Grantee pursuant to the sale of Shares (or any other securities into which such
Shares are converted or exchanged) to any unaffiliated party, less (y) the
Grantee's purchase price for such Shares.
As used herein, the term "Notional Total Profit" with respect to any
number of Shares as to which Grantee may propose to exercise this Option shall
be the Total Profit determined as of the date of the Stock Exercise Notice
assuming that this Option were exercised on such date for such number of Shares
and assuming that such Shares, together with all other Shares held by Grantee
and its affiliates as of such date, were sold for cash at the closing market
price for the Common Stock as of the close of business on the preceding trading
day (less customary brokerage commissions).
21. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction 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.
22. Public Announcement. The Grantee will consult with the Grantor
and the Grantor will consult with the Grantee before issuing any press release
with respect to the initial announcement of this Agreement, the Option or the
transactions contemplated hereby and neither party shall issue any such press
release prior to such consultation except as may be required by law or the
applicable rules and regulations of the NYSE.
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IN WITNESS WHEREOF, the Grantee and the Grantor have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
AMERICAN BANKERS INSURANCE GROUP, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By:
Title:
AMERICAN INTERNATIONAL GROUP, INC.
/s/
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By:
Title:
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