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FindLaw Corporate Counsel Contracts Business Planning Stock Option Agreement - Alliedsignal Inc. Stock Option Agreement - Alliedsignal Inc.
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WHEREAS, Parent and the Company are concurrently with the execution and delivery of this Agreement entering into an Agreement and Plan of Merger the 'Merger Agreement' pursuant to which, among other things, Merger Subsidiary will merge with and into the Company on the terms and subject to the conditions stated therein; and WHEREAS, in order to induce the Company to enter into the Merger Agreement and as a condition for the Company's agreeing so to do, Parent has granted to the Company the Stock Option as hereinafter defined , on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and in the Merger Agreement, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereto agree as follows: Capitalized terms used and not defined herein have the respective meanings assigned to them in the Merger Agreement.
Grant of Stock Option. The Exercise Price and number of Option Shares shall be subject to adjustment as provided in Section 5 below. Exercise of Stock Option.
Notwithstanding the occurrence of the Termination Date, the Company shall be entitled to purchase Option Shares pursuant to any exercise of the Stock Option, on the terms and subject to the conditions hereof, to the extent the Company exercised the Stock Option prior to the occurrence of the Termination Date. A 'Parent Trigger Event' shall mean an event the result of which is that the total fee or fees required to be paid by Parent to the Company pursuant to Section If the closing cannot be consummated on such date because any condition to the purchase of Option Shares set forth in Section 3 b has not been satisfied or as a result of any restriction arising under any applicable law or regulation, the closing shall occur five days or such earlier time as the Company may specify after satisfaction of all such conditions and the cessation of all such restrictions.
As used herein, 'Spread' shall mean the excess, if any, over the Exercise Price of the higher of x if applicable, the highest price per share of Common Stock paid or proposed to be paid by any Person pursuant to any Acquisition Proposal relating to Parent the 'Proposed Alternative Transaction Price' or y the average of the closing prices of the shares of Common Stock on the principal securities exchange or quotation system on which the Common Stock is then listed or traded as reported in The Wall Street Journal but subject to correction for typographical or other manifest errors in such reporting for the five consecutive trading days immediately preceding the date on which the Cash Exercise Notice is given the 'Average Market Price'.
If the Proposed Alternative Transaction Price includes any property other than cash, the Proposed Alternative Transaction Price shall be the sum of i the fixed cash amount, if any, included in the Proposed Alternative Transaction 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 on which the Cash Exercise Notice is given shall be deemed to equal the fair market value of such property.
If such other property includes anything other than cash or securities with an existing public trading market, the Proposed Alternative Transaction Price shall be deemed to equal the Average Market Price. Upon exercise of its right pursuant to this Section 3 d and the receipt by the Company of the applicable cash amount with respect to the Option Shares or the applicable portion thereof, the obligations of Parent to deliver Option Shares pursuant to Section 3 e shall be terminated with respect to the number of Option Shares specified in the Cash Exercise Notice.
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The Spread shall be appropriately adjusted, if applicable, to give effect to Section 5. Any payment made by the Company to Parent, or by Parent to the Company, pursuant to this Agreement shall be made by wire transfer of immediately available funds to a bank designated by the party receiving such funds, provided that the failure or refusal by Parent to designate such a bank account shall not preclude the Company from exercising the Stock Option. In addition, these certificates shall bear any other legend as may be required by applicable law.
Representations of the Company. The Company hereby represents and warrants to Parent that any Option Shares acquired by the Company upon the exercise of the Stock Option will not be, and the Stock Option is not being, acquired by the Company with the intention of making a public distribution thereof, other than pursuant to an effective registration statement under the Securities Act or otherwise in compliance with the Securities Act.
Adjustment upon Changes in Capitalization or Merger.
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In no event shall the number of shares of Common Stock subject to the Stock Option exceed Parent shall take such steps in connection with such consolidation, merger, liquidation or other transaction as may be reasonably necessary to assure that the provisions hereof shall thereafter apply as nearly as possible to any securities or property thereafter deliverable upon exercise of the Stock Option.
All of the Option Shares to be issued pursuant to the Stock Option, upon issuance and delivery thereof pursuant to this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, and will be delivered free and clear of all claims, liens, charges, encumbrances and security interests other than those created by this Agreement. Accordingly, the Company shall be entitled to specific performance and injunctive and other equitable relief to enforce the performance of this Agreement by Parent.
Accordingly, if the Company should institute an action or proceeding seeking specific enforcement of the provisions hereof, Parent hereby waives the claim or defense that the Company 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.
Parent further agrees to waive any requirements for the securing or posting of any bond in connection with obtaining any such equitable relief. This provision is without prejudice to any other rights that the Company may have against Parent for any failure to perform its obligations under this Agreement. Listing of Option Shares. Promptly after the occurrence of a Parent Trigger Event and from time to time thereafter if necessary, Parent will apply to list all of the Option Shares subject to the Stock Option on the NYSE and will use its reasonable best efforts to obtain approval of such listing as soon as practicable.
Registration of the Option Shares. Parent shall not be obligated to make effective more than two registration statements pursuant to the foregoing sentence; provided, however, that Parent may postpone the filing of a registration statement relating to a registration request by the Company under this Section 8 for a period of time not in excess of 90 days if in Parent's reasonable, good faith judgment such filing would require the disclosure of material information that Parent has a bona fide business purpose for preserving as confidential but in no event shall Parent exercise such postponement right more than once in any twelve month period.
If the Company wishes to have any portion of its Option Shares included in such registration statement, it shall advise Parent in writing to that effect within two business days following receipt of such notice, and Parent will thereupon include the number of Option Shares indicated by the Company under such Registration Statement; provided that if the managing underwriter s of the offering pursuant to such registration statement advise Parent that in their opinion the number of shares of Common Stock requested to be included in such registration exceeds the number which can be sold in such offering on a commercially reasonable basis, priority shall be given to securities intended to be registered by Parent for its own account and, thereafter, Parent shall include in such registration Option Shares requested by the Company to be included therein pro rata with the shares of Common Stock intended to be included therein by other stockholders of Parent.
Parent and the Company agree to enter into a customary underwriting agreement with underwriters upon such terms and conditions as are customarily contained in underwriting agreements with respect to secondary distributions.
Parent shall indemnify the Company, its officers, directors, agents, other controlling persons and any underwriters retained by the Company in connection with such sale of such Option Shares in the customary way, and shall agree to customary contribution provisions with such persons, with respect to claims, damages, losses and liabilities and any expenses relating thereto arising or to which the Company, its officers, directors, agents, other controlling persons or underwriters may be subject in connection with any such offer or sale under the federal securities laws or otherwise, except for information furnished in writing by the Company or its underwriters to Parent.
The Company and its underwriters, respectively, shall indemnify Parent to the same extent with respect to information furnished in writing to Parent by the Company and such underwriters, respectively. The periods during which the Company may exercise its rights under Sections 2 and 3 hereof shall be extended in each such case at the request of the Company to the extent necessary to avoid liability by the Company under Section 16 b of the Exchange Act by reason of such exercise.
This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto.
This Agreement, together with the Merger Agreement including any exhibits and schedules thereto , 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.
All notices, requests and other communications to either party hereunder shall be in writing including facsimile or similar writing and shall be given, if to Parent, to: Box Morristown, NJ Attention: Kreindler Senior Vice President, General Counsel and Secretary Facsimile No.: Honeywell Plaza Minneapolis, MN Attention: Grayson Vice President and General Counsel Facsimile No.: Peter Allan Atkins, Esq.
Each such notice, request or other communication shall be effective i if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 9 and the appropriate facsimile confirmation is received or ii if given by any other means, when delivered at the address specified in this Section 9.
Each party hereto shall pay its own expenses incurred in connection with this Agreement, except as otherwise specifically provided herein and without limiting anything contained in the Merger Agreement. If any term, provision, covenant or restriction of this Agreement is held 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.
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of law. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby or thereby may be brought in any federal or state court located in the State of Delaware, and each of the parties hereby consents to the jurisdiction of such courts and of the appropriate appellate courts therefrom in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9 c shall be deemed effective service of process on such party. This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same Agreement.
The section headings herein are for convenience only and shall not affect the construction hereof. This Agreement shall be binding upon each party hereto and such party's successors and assigns.
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This Agreement shall not be assignable by Parent, but may be assigned by the Company in whole or in part to any direct or indirect wholly-owned subsidiary of the Company, provided that the Company shall remain liable for any obligations so assigned.
All representations, warranties and covenants contained herein shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. The parties agree that time shall be of the essence in the performance of obligations hereunder.
The Company and Parent will consult with each other before issuing any press release or making any public statement with respect to this Agreement and the transactions contemplated hereby and shall not issue any press release or make any public statement without the prior consent of the other party, which shall not be unreasonably withheld.
Notwithstanding the foregoing, any such press release or public statement as may be required by applicable law or any listing Agreement with any national securities exchange, may be issued prior to such consultation, if the party making the release or statement has used its reasonable efforts to consult with the other party.
Restrictions on Certain Actions; Covenants of the Company. From and after the date of exercise of the Stock Option other than an exercise contemplated by Section 3 d hereof , in whole or part, and for as long as the Company owns shares of Common Stock acquired pursuant to the exercise of the Stock Option: The provisions of this Section 11 shall not apply to actions taken pursuant to the Merger Agreement. IN WITNESS WHEREOF, Parent and the Company have caused this Agreement to be duly executed as of the day and year first above written.
Chairman and Chief Executive Officer HONEYWELL INC. Chairman and Chief Executive Officer.