Stock Option Agreement - Plenum Publishing Corp. and Kluwer Boston Inc.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated June 10, 1998, by and between Plenum
Publishing Corporation, a Delaware corporation (the 'Company'), and Kluwer
Boston, Inc., a Massachusetts corporation (the 'Purchaser').
WHEREAS, as a condition to its willingness to enter into the Agreement and
Plan of Merger, dated as of June 10, 1998, among the Company, the Purchaser and
PPC Acquisition Corp., a Delaware corporation ('Acquisition Corp.') (the 'Merger
Agreement'), Purchaser has required that the Company agree, and the Company has
agreed, to grant the Purchaser the option as set forth herein to purchase up to
698,540 shares of the common stock, $.10 par value per share, of the Company
(the 'Common Stock').
NOW, THEREFORE, to induce Purchaser to enter into the Merger Agreement,
and in consideration of Purchaser doing so and of the mutual covenants and
agreements set forth herein, the parties agree as follows:
1. Grant of Option. The Company hereby grants to the Purchaser an
irrevocable option (the 'Stock Option') to purchase up to 698,540 shares of
Common Stock ('Option Shares') at a price per share of $73.50 ('Option Price')
payable in cash.
2. Exercise of the Stock Option. (a) The Stock Option may be exercised, in
whole or in part, at any time and from time to time after any Triggering Event
(as defined in Section 3) shall have occurred and prior to the expiration
thereof, provided that (i) all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the 'HSR Act') required for the purchase of
the Option Shares shall have expired or been waived, (ii) no breach by Purchaser
or Acquisition Corp. shall have occurred and be continuing under this Agreement
or the Merger Agreement and (iii) 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, prohibiting the issuance of
the Option Shares pursuant to this Agreement. The Stock Option shall expire upon
the earlier of (I) the date of consummation of the merger with Acquisition Corp.
contemplated by the Merger Agreement, (II) twenty (20) days after the date of
consummation of any Superior Proposal or Acquisition Proposal (as such terms are
defined in the Merger Agreement) under circumstances which obligate the Company
to pay the Termination Fee (as defined in the Merger Agreement) under the terms
of the Merger Agreement, or (III) the date upon which the Merger Agreement is
terminated other than in connection with the occurrence of a Triggering Event.
(b) If the Purchaser wishes to exercise the Stock Option for all or
some of the Option Shares, the Purchaser shall send a written notice (the
'Notice') to the
Company specifying the number of Option Shares it will purchase pursuant to such
exercise and the place and date not less than three (3) nor more than twenty
(20) days from the date of the Notice for the closing of such purchase.
3. Triggering Event. For purposes of this Agreement, a 'Triggering Event'
shall mean the occurrence of an event which requires the payment of the
Termination Fee (as defined in the Merger Agreement) by the Company to
Acquisition Corp. in accordance with the provisions of Section 6.8, 8.1 or 8.3
of the Merger Agreement.
4. Closing. (a) At any closing on the date specified under Section 2
hereof, (i) the Purchaser will make payment to the Company of the aggregate
price for the Option Shares being purchased upon exercise of the Stock Option by
wire transfer in immediately available funds and (ii) the Company will deliver
to the Purchaser a certificate or certificates representing the number of shares
of Common Stock so purchased in the denominations designated by the Purchaser
and receipt evidencing payment of any requisite stock transfer taxes. At any
such closing, the Company shall deliver a certificate to the Purchaser
certifying that the representations and warranties made in Section 6 herein are
true and correct as of the date of such closing, and the Purchaser shall deliver
a letter to the Company agreeing that the Purchaser will not offer to sell, or
otherwise dispose of, any Option Shares acquired by it pursuant to this
Agreement in violation of the Securities Act of 1933, as amended (the '1933
Act'), and applicable state securities laws.
(b) The closing shall take place at the location set forth in the
Notice delivered in accordance with Section 2 hereof.
5. Covenants. (a) Upon the request of the Purchaser, the Company agrees to
file, as promptly as practicable, a registration statement and use its best
efforts to cause such registration statement to become effective, as
expeditiously as possible, under the 1933 Act and any applicable state
securities laws with respect to any proposed disposition by the Purchaser of the
Option Shares, or any portion thereof, unless, in the written opinion of counsel
to the Company, addressed to the Purchaser, registration is not required for the
proposed disposition of such Option Shares; provided, however, that the Company
shall not be obligated to file more than one registration statement (under
federal and, if applicable, state law) with respect to the Option Shares
pursuant to this paragraph. The Company agrees further to cause such
registration statement to remain effective for a reasonable period of time
required for the disposition by the Purchaser of the Option Shares in a public
offering thereof (provided, that the effectiveness of the registration statement
may be delayed or suspended for a reasonable period of time, but not in excess
of 180 days, to permit the Company to consummate (i) an offering of securities,
or (ii) extraordinary transactions that it would otherwise be precluded from
completing due to the obligations of the Company under this Section 5(a)), to
prepare and file such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the 1933
Act with respect to the sale or other
disposition of all securities covered by such registration statement, and to
enter into customary agreements for a secondary offering of shares (including an
underwriting agreement for a secondary offering of shares in customary form
containing customary indemnification provisions). The registration effected
under this paragraph 5(a) shall be effected at the Company's expense.
(b) Upon the request of the Purchaser, the Company agrees that it
will promptly file applications to list any Option Shares, whether issued or
unissued, on the NASDAQ National Market System and will use its best efforts to
obtain approval of such listing.
(c) Upon the request of Purchaser prior to Purchaser's exercise of
the Stock Option, the Company shall use its reasonable best efforts to file as
soon as practicable notifications under the HSR Act with respect to Purchaser's
exercise of the Stock Option and to respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antirust Division
of the Department of Justice for additional information or documentation and to
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity (as defined in the
Merger Agreement) in connection with antitrust matters. Each of the Company and
Purchaser shall further take all reasonable actions necessary to file any other
forms or notifications which may be required by any foreign Governmental Entity
and to obtain any approvals which may be required in connection therewith.
(d) In furtherance and not in limitation of the foregoing, each of
Purchaser and the Company shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any domestic or foreign government or
Governmental Entity or any multinational authority ('Antitrust Laws'); provided,
however, that nothing in this Agreement shall require, or be construed to
require, Purchaser or the Company or any of their respective affiliates to
proffer to, or agree to, sell or hold separate and agree to sell, before or
after the exercise of the Stock Option, any material assets, business, or
interest in any assets or businesses of Purchaser, the Company or any of their
respective affiliates (or to consent to any sale, or agreement to sell, by the
Company of any of its material assets or businesses) or to agree to any material
changes or restrictions in the operations of any such assets or businesses.
(e) Any party hereto shall promptly inform the other of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or Governmental Entity or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such
request. Purchaser will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Purchaser
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or Governmental Entity or
multinational authority in connection with the transactions contemplated by this
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company is a corporation duly organized and validly existing
in good standing under the laws of Delaware. The Company has all requisite
corporate power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
and all the transactions contemplated hereby have been duly authorized by the
Company's Board of Directors and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or any of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by a
duly authorized officer of the Company, and constitutes a legal, valid and
binding agreement of the Company, and assuming this Agreement is a legal, valid
and binding obligation of the Purchaser, this Agreement is enforceable against
it in accordance with its terms.
(b) Except for compliance with the requirements of the HSR Act, no
consent of any court or governmental authority, national securities exchange
automated securities quotation system or other person is necessary for the
execution, delivery and performance of this Agreement by the Company.
(c) The Company has taken all necessary corporate action to
authorize and reserve for issuance upon exercise of the Stock Option 698,540
authorized but unissued Common Shares. The Option Shares have been duly
authorized and, when issued and paid for in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable. Upon delivery
of the Option Shares to the Purchaser upon the exercise of the Option granted
under this Agreement, the Purchaser will receive good and marketable title to
the Option Shares, free and clear of any pledge, lien, security interest,
charge, preemptive right, claim, equity or encumbrance of any kind.
(d) The execution and delivery of this Agreement do not, and the
performance of this Agreement will not, (i) violate the certificate of
incorporation or by-laws of the Company, or (ii) conflict with or result in a
breach of any terms or provisions of, or constitute a default or give rise to a
right of acceleration under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company under any
indenture, mortgage, loan agreement or other agreement or instrument to which
the Company is a party or by which any of its property is bound or any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
instrumentality, court or national securities exchange having jurisdiction over
the Company or any of its property.
7. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that it is a corporation duly organized
and validly existing in good standing under the laws of the State of
Massachusetts and has all requisite corporate power and authority to enter into
and perform all of its obligations under this Agreement; the execution, delivery
and performance of this Agreement by it and all of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on its part,
and this Agreement has been duly executed and delivered by it.
8. Representations and Warranties to Survive Delivery. All representations
and warranties contained in this Agreement, or contained in certificates of
officers of the Company submitted pursuant to this Agreement, shall survive
delivery of and payment for the Option Shares for a period expiring on the
earlier of (a) the first anniversary of the date of delivery and payment for the
Option Shares and (b) the date upon which Purchaser shall have sold or otherwise
disposed of all of the Option Shares (other than to a direct or indirect
majority-owned subsidiary of Purchaser).
9. Adjustment Upon Changes in Capitalization. In the event of any change
in the Common Shares by reason of stock dividends, split-ups, recapitalizations,
combinations, exchanges of shares or the like, the number of Option Shares and
the purchase price per share shall be adjusted appropriately.
10. No Assignment. Neither the rights nor the obligations of any party
hereto may be transferred or assigned without the written consent of the other
parties, except that Purchaser may assign its rights and obligations to any
direct or indirect majority-owned subsidiary of Purchaser.
11. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement and that the
obligations of the parties hereto shall be specifically enforceable.
12. Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the subject matter
13. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
14. Further Assurances. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
15. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Purchaser:
Kluwer Boston, Inc.
c/o Kluwer Academic Publishers bv
3300 AZ Dordrecht, the Netherlands
Attention: Jeffrey K. Smith
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Facsimile: (312) 425-0233
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Facsimile: (212) 326-0806
If to the Company:
Plenum Publishing Corporation
233 Spring Street
New York, New York 10013
Attention: Martin E. Tash
Facsimile: (212) 463-0742
with copies to:
Bressler, Amery & Ross, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Facsimile: (212) 425-9337
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
16. 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 principles of conflict of laws thereof.
17. Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
18. Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
20. Expenses. Except as otherwise provided in Section 5, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized as of the day
and year first above written.
PLENUM PUBLISHING CORPORATION
By: /s/ Martin E. Tash
Martin E. Tash
President and Chairman of the Board
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
Name: Jeffrey K. Smith