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EXHIBIT 99(C)
STOCKHOLDER OPTION AGREEMENT
This STOCKHOLDER OPTION AGREEMENT (this "Agreement"), dated January 10,
2001, by and among United Parcel Service, Inc., a Delaware corporation
("Holder"), and the ▇▇▇▇ ▇. ▇▇▇▇▇ 1999 Grantor Retained Annuity Trust, a trust
created under the laws of the state of California (the "Stockholder").
WITNESSETH THAT:
WHEREAS, the Stockholder owns of record 961,041 shares of common stock
(the "Common Stock"), $.01 par value, of ▇▇▇▇▇ Companies, Inc., a Delaware
corporation ("Company") (all of such shares being referred to herein, and giving
effect to Section 14 hereof, as the "Shares"); and
WHEREAS, ▇▇▇▇ ▇. ▇▇▇▇▇, an individual resident of the state of
California (the "Trustee") is the sole trustee of the Stockholder and has sole
power to vote and direct disposition of the shares:
WHEREAS, concurrently herewith Holder, VND Merger Sub, Inc., a Delaware
corporation and wholly owned subsidiary of Holder ("Newco"), and Company are
entering into a Plan and Agreement of Merger (the "Merger Agreement") pursuant
to which Newco would, subject to the terms and conditions set forth therein,
merge with and into Company (the "Merger"); and
WHEREAS, the transaction is expected to be structured as a tax-free
reorganization for shares of Holder capital stock; and
WHEREAS, the Stockholder desires to induce Holder to proceed with the
Merger and enter into the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, Holder's willingness to enter into the Merger Agreement and
the sum of $100, and such other valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. The Stockholder hereby grants to Holder an
irrevocable and continuing option (the "Option") to purchase all of the Shares
owned by him for a per share price equal to an amount of cash equal to 0.2
multiplied by the average (rounded to the nearest 1/10,000) of the volume
weighted averages (rounded to the nearest 1/10,000) of the trading prices of
Holder Class B common stock, par value $0.01 per share, on the New York Stock
Exchange, as reported by Bloomberg Financial Markets (or such other source as
the parties shall agree in writing), for the 10 trading days immediately
preceding the Notice (as defined below) (the "Purchase Price"). As additional
consideration, Holder shall pay to the Stockholder,
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promptly following the sale or other disposition of any Shares (or any other
securities into which such Shares are converted or exchanged) within 6 months
following the Closing (as defined below), any property or cash amounts received
therefor by Holder in excess of the Purchase Price.
2. Exercise of Option. Holder may exercise the Option, in whole
but not in part, at any time following the occurrence of a First Date for
Exercise (as defined below) by delivering a written notice to the Stockholder
with a copy to Bank of America, N.A., (or if Bank of America, N.A. is unwilling
or unable to act upon commercially reasonable terms, any other bank or trust
company reasonably acceptable to Holder and Stockholder), as escrow agent (the
"Escrow Agent") under an Escrow Agreement, to be entered into within five days
of the date hereof upon commercially reasonable terms among Holder, the
Stockholder and the Escrow Agent (the "Escrow Agreement") of its intention to
exercise the Option (the "Notice"), specifying a time, place and date for the
closing (the "Closing"), which shall occur as soon as practicable, but not later
than three (3) business days from the date of the Notice; provided, however,
that (a) if any approvals under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), or otherwise shall be required with respect
to such exercise, then the Closing shall be the later of the date specified in
the Notice or the next business day following the date on which such approvals
shall have been obtained, and (b) there shall not be in effect any preliminary
or final injunction or other order issued by any court or governmental,
administrative or regulatory agency or authority or legislative body or
commission prohibiting the exercise of the Option pursuant to this Agreement. As
used herein, the "First Date for Exercise" shall mean the earliest to occur of
any of the following events:
(i) any person shall have commenced (as such term is
defined in Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), or
shall have filed a registration statement under the
Securities Act of 1933, as amended (the "Securities
Act"), with respect to, a tender offer or exchange
offer to purchase any shares of Common Stock such
that, upon consummation of such offer, such person
would own or control 20% or more of the then
outstanding Common Stock;
(ii) Company, without having received Holder's prior
written consent, shall (A) have authorized,
recommended, proposed or publicly announced an
intention to authorize, recommend or propose, or
shall have entered into or publicly announced an
intention to enter into, an agreement with any person
(other than Holder, Newco or any other subsidiary of
Holder) to (1) effect a merger, consolidation,
combination, reorganization, share exchange, joint
venture involving an "equity control event" (as
defined below) or similar transaction involving
Company, (2) directly or indirectly sell, lease or
otherwise transfer or dispose of, or agree to sell,
lease or otherwise transfer or dispose of, assets of
Company or its subsidiaries representing 20% or more
of the consolidated assets of Company and its
subsidiaries or (3) directly or indirectly issue,
sell or otherwise transfer or dispose of or agree to
issue, sell or otherwise transfer or dispose of
(including, without limitation, by way of merger,
consolidation,
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reorganization, share exchange, dividend,
distribution or any similar transaction) securities
representing 20% or more of the voting power of
Company (any of the foregoing an "Acquisition
Transaction"), or (B) directly or indirectly have
otherwise taken any action including, without
limitation, responding to, or entering into
discussions or negotiations, in respect of an
Acquisition Transaction or an Acquisition Proposal
(as defined in the Merger Agreement) made by any
party other than Holder; provided that such action
violates Section 6.9 of the Merger Agreement;
(iii) any person or group (as such term is defined under
the Exchange Act) 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 shall have been
formed which beneficially owns or has the right to
acquire beneficial ownership of, 15% or more of the
then outstanding Common Stock (other than any person
or group that, at the date hereof, beneficially owns
or has the right to acquire beneficial ownership of
15% or more of the outstanding shares of Common
Stock) (an "equity control event"); or
(iv) any person other than Holder shall have made an
Acquisition Proposal to Company and such proposal
shall have been publicly announced (the events
described in the preceding clauses (i), (ii), (iii)
and (iv) are collectively and individually
hereinafter referred to as an "Acquisition Event").
3. Payment and Delivery of Certificates. Concurrent with the
execution of this Agreement, the Stockholder shall deliver to the Escrow Agent
the certificates representing the Shares, duly endorsed in blank for transfer,
or accompanied by duly executed stock powers in blank, in each case with
signatures guaranteed by a national bank or trust company or a member firm of
the New York Stock Exchange, Inc. At the Closing hereunder, the Escrow Agent
shall promptly deliver to Holder the Shares and, simultaneously with the proper
surrender by Escrow Agent to Holder of the Shares to be purchased by Holder,
Holder shall deliver to the Escrow Agent a wire transfer of immediately
available funds equal to the product of (x) the Purchase Price multiplied by (y)
the number of Shares.
4. Representations and Warranties of the Stockholder. The
Stockholder represents and warrants (such representations and warranties being
deemed repeated at the Closing) to Holder that:
4.1 Ownership of Shares. The Stockholder has good and
marketable title to and is the sole record owner of the Shares; except as set
forth on Schedule 4.1 hereto, the Stockholder does not own beneficially or of
record any other capital stock of Company; such Shares are validly issued, fully
paid and nonassessable, with no personal liability attaching to the ownership
thereof; and such Shares are owned by the Stockholder free and clear of any
pledges, liens, security interests, adverse claims, assessments, proxies,
participations, options, equities,
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charges or encumbrances of any nature whatsoever with respect to the ownership
of or right to vote or dispose of such Shares, except for any encumbrances
arising hereunder.
4.2 Transfer of Title. The sale by the Stockholder of his
Shares and the delivery by Escrow Agent of the certificates representing such
Shares to Holder pursuant hereto will transfer to Holder good and valid title to
such Shares free and clear of all pledges, liens, security interests, adverse
claims, assessments, options, equities, charges and encumbrances of any nature
whatsoever, and with no proxies or restrictions on the voting rights or other
incident of record or beneficial ownership pertaining thereto (other than the
proxy being granted pursuant to Section 6 of this Agreement).
4.3 Authority; Due Execution; Enforceability. The
Stockholder has the full right, power, capacity and authority to enter into this
Agreement and has sole voting power and sole power of disposition with respect
to the Shares with no restrictions on the Stockholder's voting rights or rights
of disposition pertaining thereto (other than the proxy being granted pursuant
to Section 6 of this Agreement); and this Agreement has been duly and validly
executed and delivered by the Stockholder and constitutes a legal, valid and
binding obligation of the Stockholder enforceable against him in accordance with
its terms, except that such enforceability may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights.
4.4 No Conflicts. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
will not, with or without giving of notice or the passage of time, (a) violate
any judgment, award, decree, injunction or order of any court, arbitrator or
governmental agency applicable to the Stockholder or the Stockholder's property
or assets or any federal or state law, statute or regulation, or (b) conflict
with, result in the breach of any provision of or constitute a violation of or
default under any agreement or instrument to which the Stockholder is a party or
by which the Stockholder or the Stockholder's property or assets may be bound.
5. Covenants of the Stockholder. The Stockholder hereby covenants
and agrees that:
5.1 Bring-Down of Representations. During the term hereof
the Stockholder will not enter into any transaction, take any action or by
inaction permit any event to occur, that would result in any of the
representations or warranties of the Stockholder herein contained not being true
and correct at and as of (a) the time immediately after the occurrence of such
transaction, action or event or (b) the date of the Closing of the purchase of
Shares. Without limiting the generality of the foregoing, the Stockholder
covenants and agrees that the Stockholder will not sell, transfer, pledge,
hypothecate, assign or otherwise convey or dispose of, or enter into any
contract, option, agreement or other arrangement or understanding with respect
to the sale, transfer, pledge, assignment, conveyance or other disposition of,
any Shares, other than to or in favor of Holder or Holder's assignee, or in
connection with the Merger or an Acquisition Transaction between Company and
Holder, Newco or another subsidiary of Holder (a "Holder Acquisition
Transaction").
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5.2 Surrender of Shares. Concurrent with the execution of
this Agreement, the Stockholder will execute an Escrow Agreement authorizing the
Escrow Agent to take the actions contemplated by this Agreement on behalf of the
Stockholder and will surrender the certificates representing his Shares to the
Escrow Agent to be held pursuant to the Escrow Agreement. The Stockholder agrees
that Company may instruct the transfer agent for the Common Stock to place a
stop transfer order against any attempt to transfer the Shares except in
accordance with the Escrow Agreement and this Agreement.
6. Irrevocable Proxy and Release; Agreement to Vote Shares.
(a) The Stockholder has revoked or terminated any
proxies, voting agreements or similar arrangements previously given or entered
into with respect to the Shares and hereby irrevocably appoints Holder, during
the term of this Agreement, as proxy, with full power of substitution, for the
Stockholder to vote (or refrain from voting) in any manner as Holder, in its
sole discretion, may see fit, all of the Shares of the Stockholder for the
Stockholder and in the Stockholder's name, place and stead, at any annual,
special or other meeting or action of the stockholders of Company or at any
adjournment thereof or pursuant to any consent of the stockholders of Company in
lieu of a meeting or otherwise, with respect to any issue brought before
stockholders of Company. The parties acknowledge and agree that, except as
specifically provided for in Section 6(c) hereof, neither Holder, nor Holder's
successors, assigns, subsidiaries, divisions, employees, officers, directors,
stockholders, agents and affiliates shall owe any duty to, whether in law or
otherwise, or incur any liability of any kind whatsoever, including without
limitation, with respect to any and all claims, losses, demands, causes of
action, costs, expenses (including reasonable attorney's fees) and compensation
of any kind or nature whatsoever to the Stockholder in connection with, as a
result of or otherwise relating to any vote (or refrain from voting) by Holder
of the Shares subject to the irrevocable proxy hereby granted to Holder at any
annual, special or other meeting or action or the execution of any consent of
the stockholders of Company. If the issue on which Holder is voting pursuant to
the irrevocable proxy is the proposal to approve the Merger and the Merger
Agreement, Holder shall vote for such proposal or give its consent, as
applicable.
(b) Notwithstanding the foregoing grant to Holder of the
irrevocable proxy, in the event Holder elects not to exercise its rights to vote
the Shares pursuant to the irrevocable proxy, upon the request of Holder the
Stockholder agrees to vote all of his Shares during the term of this Agreement:
(i) if the issue on which the Stockholder is requested to vote is a proposal to
approve the Merger and the Merger Agreement, in favor of or give its consent to,
as applicable, the Merger and the Merger Agreement or (ii) otherwise in the
manner directed by Holder at any annual, special or other meeting or action of
the stockholders of Company in lieu of a meeting or otherwise with respect to
any issue brought before the stockholders of Company.
(c) If Holder (i) exercises its right to vote the Shares
pursuant to the irrevocable proxy as provided in Section 6(a) other than with
respect to the approval of the Merger, or (ii) instructs the Stockholder how to
vote pursuant to Section 6(b)(ii), other than with respect to the approval of
the Merger, and such Stockholder votes his Shares in accordance with such
instruction, Holder agrees to indemnify and hold harmless such Stockholder from
any and
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all claims, liabilities, losses, demands, causes of action, expenses (including
reasonable attorneys' fees) that arise from or occur by reason of such actions.
(d) Notwithstanding anything to the contrary contained in
this Agreement, the Stockholder shall be free to act in his capacity as a member
of the Board of Directors of the Company and to discharge his fiduciary duty as
such.
7. Survival. All rights and authority granted herein by the
Stockholder shall survive the death or incapacity of the Stockholder. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective spouses, heirs, personal representatives, successors and
assigns. Holder may, without the consent of the Stockholder, assign its rights
(but not its obligations) hereunder to any wholly owned subsidiary of Holder,
but otherwise the consent of the Stockholder shall be required to assign the
rights of Holder hereunder. The consent of Holder shall be required to assign
the rights of the Stockholder hereunder.
8. Further Assurances. The Stockholder shall cooperate with
Holder and execute and deliver any additional documents necessary, in the
reasonable opinion of Holder or its counsel, to (i) obtain any third party
approvals necessary to consummation of the exercise of the Option, including,
without limitation, approvals under the HSR Act, if applicable, (ii) complete
the sale and transfer of the Shares with respect to which the Option is
exercised and the vesting of title to such Shares in Holder and (iii) evidence
the irrevocable proxy granted herein with respect to the Shares.
9. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, postage prepaid, addressed
to the respective party at the following addresses:
To Holder: United Parcel Service, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to: King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Stockholder:
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with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
10. Termination. Except as provided in the following sentence,
this Agreement and the Option, other than the provisions of Section 6(c), shall
terminate on the earlier of: (i) the delivery by Holder to the Stockholder of
written notice of Holder's determination to terminate this Agreement and (ii)
the termination of the Merger Agreement in accordance with the terms thereof
(the "Termination Date"). Notwithstanding anything to the contrary in this
Agreement or any other agreement, if during the term of this Agreement an
Acquisition Event shall occur or if the Merger Agreement shall have been
terminated by Holder in accordance with Section 8.1(d) or 8.1(f)(ii) of the
Merger Agreement (the date of the earlier of the occurrence or termination being
the "Trigger Date"), this Agreement and the Option shall remain in full force
and effect and the Termination Date of this Agreement shall automatically extend
to the date which occurs 9 months from the Trigger Date.
11. Remedies. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
12. Commissions. Each of the parties hereto represents and
warrants that there are no agreements or claims for brokerage commissions or
finders' fees in connection with the transactions contemplated by this
Agreement, and the Stockholder and Holder will respectively pay or discharge and
will indemnify each other for brokerage commissions or finders' fees incurred by
reason of any action taken by such indemnifying party.
13. Survival of Representations. Notwithstanding any provision of
this Agreement to the contrary, all representations and warranties made by the
Stockholder in this Agreement and the covenants set forth in Sections 6(c),12
and 19 hereof shall survive (i) any exercise of the Option by Holder, (ii) any
vote by Holder of the Shares pursuant to the irrevocable proxy or (iii) any vote
by the Stockholder in accordance with Section 6(b); provided, however, that all
representations and warranties shall not survive and shall terminate upon
termination of this Agreement pursuant to Section 10 hereof.
14. Changes in Capitalization. For all purposes of this Agreement,
the Shares shall include any securities for cash or other property issued or
exchanged with respect to such Shares upon any recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, dividend in cash or stock or other property, split-up or
combination of the securities
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of Company, or any other change in its capital structure and shall also include
all Shares of Common Stock issued to the Stockholder after the date hereof
pursuant to the exercise by the Stockholder of stock options.
15. Compliance with Securities Laws. The parties agree that any
transfer of the Shares effected hereunder shall be effected so as to comply with
all applicable federal and state securities laws.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of laws principles thereof.
17. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute a single agreement.
18. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any current or future law, and if the
rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. In lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement, a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible, and the parties hereto
request the court or any arbitrator to whom disputes relating to this Agreement
are submitted to reform the otherwise illegal, invalid or unenforceable
provision in accordance with this Section 18.
19. Agreements to Notify.
(a) The Stockholder and Holder agree to notify promptly
the Escrow Agent of the termination of this Agreement and agree to deliver to
the Escrow Agent any written instructions that may reasonably be requested by
the Escrow Agent relating to the release of the Shares upon the termination of
this Agreement.
(b) The Stockholder agrees to notify Holder promptly, and
in any event, without limiting the foregoing undertaking, prior to any exercise
of the Option by Holder, of any commencement or threatened commencement known to
the Stockholder by any person, entity or governmental authority or agency of any
suit, action or legal proceedings with respect to the Option.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed as of the date first above written.
▇▇▇▇ ▇. ▇▇▇▇▇ 1999 GRANTOR
RETAINED ANNUITY TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
as Trustee
UNITED PARCEL SERVICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
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SCHEDULE 4.1
None
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