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Exhibit 32
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 21, 1997, as
amended and restated as of February 28, 1998 (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
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insurance regulatory approvals) not later than 10 business 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
outstanding 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 highest 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") or, if Section 1(d) is applicable, on the
last trading day immediately prior to termination of the Merger Agreement. If,
in the case of clause (x) above, the Alternative Purchase Price can be
calculated by reference to an all cash amount paid or proposed to be paid for
any shares of Common Stock outstanding, such cash amount shall be deemed to be
the Alternative Purchase Price; if, in the case of clause (x) above, no shares
of Common Stock will be purchased for all cash, the Alternative Purchase Price
shall be the sum of
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(i) the fixed cash amount, if any, included in the Alternative Purchase Price
plus (ii) the fair market value of such property other than cash included in the
Alternative Purchase Price. 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 Cash Exercise Notice or, if
Section 1(d) is applicable, ending on the last trading day immediately prior to
termination of the Merger Agreement, shall be used to calculate 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.
(d) Notwithstanding anything in the foregoing to the contrary,
it is agreed that if after the delivery by Grantee of the Stock Exercise Notice,
which was delivered to Grantor on January 27, 1998, with respect to all
8,265,626 Shares, but prior to the receipt of all regulatory approvals required
for the consummation of the purchase of the Shares subject to such Stock
Exercise Notice, Grantor or Grantee intends to terminate the Merger Agreement
pursuant to the terms thereof, the party intending to so terminate the Merger
Agreement shall provide at least one full business days' notice of such
intention to the other party and, if requested to do so by Grantee, Grantor
shall take such steps as may be necessary so as to pay to Grantee, not later
than immediately prior to such termination, cash by wire transfer in immediately
available funds in an aggregate amount equal to the Spread (as defined in
Section 1(c) above) multiplied by the number of Shares subject to the Stock
Exercise Notice, less any amounts paid to Grantee by Grantor pursuant to Section
8.5 of the Merger Agreement.
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:
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(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 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,
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with any person (other than Grantee or any of its subsidiaries) to
effect or provide for an Acquisition Transaction; (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) Except as otherwise provided in Section
1(d), 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 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 125 Broad
Street, New York, New York, 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)
or Section 1(d) hereof, as the case may be, the Grantor will deliver to the
Grantee cash in an amount determined pursuant to Section 1(c) or Section 1(d)
hereof, as the case may be. Except as otherwise provided in Section
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1(d), 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 consummation 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-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;
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(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 and New 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") or pursuant to the Rights Agreement,
dated as of February 19, 1998, between the Grantor and ChaseMellon Shareholder
Services, LLC, as Rights Agent (the "New 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
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
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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 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.
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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 hereto, 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
underwriters 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 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
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(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 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.
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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.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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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
assigns 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.
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
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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 otherwise 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 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
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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 $100 million and, if it otherwise would exceed such amount, the
Grantee, at its sole election, shall either (a) reduce the number of shares of
Common Stock required to be delivered by Grantor pursuant to the Stock Exercise
Notice, (b) deliver to the Grantor for cancellation Shares previously purchased
by Grantee, (c) reduce the cash payable to Grantee pursuant to Section 1(c) or
1(d) hereof, (d) pay cash or other consideration to the Grantor or (e) undertake
any combination thereof, so that Grantee's Total Profit shall not exceed $100
million after taking into account the foregoing actions.
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) and Section 1(d) hereof, (ii) (x) the amount of cash 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 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.
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.
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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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman, President, and
Chief Executive Officer
AMERICAN INTERNATIONAL GROUP, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
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