Exhibit (d)(3)
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 3, 2000 (the "Agreement"),
between Burns International Services Corporation, a Delaware corporation (the
"Grantor"), and Securitas AB, a joint stock company organized under the laws of
Sweden (the "Grantee").
W I T N E S S E T H:
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Grantor, the Grantee and Securitas Acquisition Corporation, a
Delaware corporation and an indirect, wholly owned subsidiary of the Grantee
("Purchaser"), are entering into an Agreement and Plan of Merger, dated as of
the date hereof (the "Merger Agreement"), which provides for, upon the terms and
subject to the conditions set forth therein, (i) the commencement by Purchaser
of a tender offer (the "Offer") for all of the issued and outstanding Common
Stock, par value $.01 per share of the Company (the "Company Common Shares")
including the associated rights to purchase Series A Participating Cumulative
Preferred Stock, at a price per share equal to the Per Share Amount (as defined
in the Merger Agreement), and (ii) the subsequent merger of Purchaser with and
into the Grantor (the "Merger");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, the Grantee and Purchaser have requested that the Grantor grant to
the Grantee an option to purchase up to the full number of Option Shares (as
defined below), upon the terms and subject to the conditions herein; and
WHEREAS, in order to induce the Grantee and Purchaser to enter into the
Merger Agreement, the Grantor is willing to grant the Grantee the requested
option.
Terms used but not otherwise defined in this Agreement have the meanings
ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Grantee and the Grantor hereby agree as follows:
SECTION 1. The Option; Exercise; Adjustments; Payment of Spread.
----------------------------------------------------
(a) 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 the number of Company Common Shares which represents 19.9% of all Company
Common Shares which are issued and outstanding immediately prior to the exercise
of the Option (the "Option Shares"), at a cash purchase price per Share equal to
the Per Share Amount (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 an event described 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), not later than ten
(10) business days and not earlier than three (3) business days following the
date such notice is given for the closing of such purchase; provided that the
Closing Date may be
postponed in accordance with Section 3(a). In the event of any change in the
number of issued and outstanding Company Common Shares 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 Company Common Shares which are issued and
outstanding immediately prior to the exercise of the Option.
(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 twenty
(20) business days and not earlier than ten (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 the 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 Company Common Share
paid or proposed to be paid by any person pursuant to a Takeover Proposal giving
rise to an event described in Section 2(d) hereof (the "Alternative Purchase
Price") or (y) the average of the closing prices of the Company Common Shares as
of the end of the regular session on the NYSE Composite Tape for the five (5)
trading days 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 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 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 the Grantee's 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.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange
Act"). Notwithstanding anything else contained in this Agreement, the Grantor
shall not be required to comply with the foregoing provisions of this Section
1(c) if such compliance would be restricted by the terms of the Amended and
Restated Credit Agreement dated as of June 30, 1998 among the Grantor, the
Lenders listed therein, Canadian Imperial Bank of Commerce, as documentation
agent, NationsBank, N.A., as syndication agent, and Bankers Trust Company, as
administrative agent, as amended; provided that, at the request of the Grantee,
the Grantor will use its best efforts to request such lenders to waive such
restrictions. Pending a determination from the lenders regarding a request from
Grantor for such a waiver, all of Grantees rights under this Section 1(c) shall
survive.
SECTION 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 Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") shall have expired or been terminated;
and
2
(c) Any approvals and consents required to be obtained prior to the
delivery of the Shares under applicable foreign antitrust or competition laws
shall have been obtained and be in full force and effect; and
(d) (i) The Merger Agreement shall have become terminable under
circumstances which would entitle the Grantee to receive the Termination Fee
pursuant to the first sentence of Section 8.2(b) of the Merger Agreement or (ii)
the Grantee shall have become entitled to receive the Termination Fee pursuant
to the second sentence of Section 8.2(b) of the Merger Agreement.
SECTION 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 Dunnington, Bartholow & Miller
LLP, 666 Third Avenue, New York, New York 10017, 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)
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 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").
SECTION 4. Representations and Warranties of the Grantor. The Grantor
---------------------------------------------
represents and warrants to the Grantee that 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 the Grantee as contemplated hereby, will
be duly authorized, validly issued, fully paid and non-assessable and free of
preemptive rights.
SECTION 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 the Grantee enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium or
other similar laws and except that the availability of equitable remedies,
including specific performance, is subject to the discretion of the court before
which any proceeding for such remedy may be brought; 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 for investment
and not with a view to distribution or resale in any manner which would be in
violation of the Securities Act.
SECTION 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
3
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 obtain all approvals and
consents required under applicable foreign antitrust and competition laws;
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.
SECTION 7. Registration Rights.
-------------------
(a) In the event that the Grantee shall desire to sell any of the Option
Shares, and such sale requires, in the written opinion of counsel to the
Grantee, which opinion shall be reasonably satisfactory to the Grantor and its
counsel, registration of such Option Shares under the Securities Act, the
Grantor will cooperate with the Grantee and any underwriters in registering such
Option 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 120 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
transaction by the Company. Grantee shall use its reasonable efforts to cause,
and shall use its reasonable efforts to cause any underwriters of any sale or
other disposition to cause, any sale or other disposition pursuant to such
registration statement to be effected on a widely distributed basis so that upon
consummation thereof no purchaser or transferee will own beneficially more than
3% of the then outstanding voting power of Grantor.
(b) If the Company Common Shares are registered pursuant to the provisions
of this Section 7, 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 90 days a prospectus covering the
Option Shares 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 Grantee 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 Grantee, and the underwriting fees and selling
commissions applicable to the Company Common Shares sold by the Grantee, except
that the Grantor shall pay the fees and disbursements of its counsel and
accountants. The Grantor shall indemnify and hold harmless (i) the 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 Exchange Act (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
4
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 any Indemnified Party expressly for use or incorporation by reference
therein.
(c) The Grantee shall indemnify and hold harmless the Grantor, its
affiliates, officers and directors and the Underwriters against any losses,
claims, damages, liabilities or expenses to which the Grantor, its affiliates
and its officers and directors or the Underwriters 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 Section, 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
specifically for use or incorporation by reference therein.
SECTION 8. Other Restrictions.
------------------
(a) The Option Shares may not be sold, assigned, transferred, or otherwise
disposed of by Grantee or any of its Affiliates except (i) in an underwritten
public offering as provided in Section 7, (ii) to any purchaser who would not,
to the knowledge of the Grantee after reasonable due inquiry, immediately
following such sale, assignment, transfer or disposal, beneficially own more
than 3% of the then outstanding voting power of the Grantor or (iii) pursuant to
a bona fide third party tender offer or exchange offer (A) that has been
approved or recommended by a majority of the members of the Board of Directors
(which majority shall include a majority of directors who were directors as of
the date hereof) or (B) if in the good faith judgment of the Grantee there is a
reasonable possibility it would be, as a result of not tendering or exchanging,
relegated to different consideration than would be available to those
shareholders who did tender or exchange, taking into account any provisions
thereof with respect to proration and any proposed second step or back-end
transaction, provided in the case of this clause (B) that all conditions to such
tender or exchange offer (other than the minimum tender or exchange condition)
could reasonably be expected to be satisfied or waived at the scheduled
expiration date for such offer even if the Grantee did not tender.
(b) (x) If Grantee desires to transfer for value any or all of its
Option Shares to any Person, Grantee shall, not less than 30 days prior to
the anticipated closing of such transfer, provide the Grantor with written
notice (an "Offer Notice") that the Grantee desires to effect such a
transfer. The Offer Notice shall identify the number of Option Shares
proposed to be transferred (the "Offered Shares"), the consideration at
which a transfer is proposed to be made and all other material terms and
conditions of the transfer.
(y) The giving of an Offer Notice to the Grantor by the Grantee
shall constitute an offer (the "Offer") by the Grantee to sell to the
Grantor all such Offered Shares at the same price per share and for
consideration consisting of (I) cash equal to the amount of cash proposed
to be paid by the proposed transferee or (II) cash or non-cash
consideration, if any, having an equivalent value with the non-cash
consideration proposed to be paid by the proposed transferee. The
determination of equivalent value required by the preceding sentence shall
be made by a mutually agreed upon investment banking firm of national
standing, whose fees shall be split equally between the Grantor and the
Grantee. The Offer shall be irrevocable for thirty (30) days after receipt
of such Offer Notice by the Grantor (the "Offer Period"). The Grantor
shall have the right to accept such Offer in whole but not in part by
written notice delivered to the Grantee prior to the expiration of the
Offer Period. If the Grantor accepts the Offer, the Grantee shall transfer
5
all such Offered Shares (free of all liens and encumbrances) to the Grantor
within 20 days after the date such Offer is accepted by the Grantor,
against delivery by the Grantor of the consideration payable to the Grantee
as set forth in the Offer Notice; provided that if the transfer of such
Offered Shares is subject to the expiration of any applicable statutory
waiting period, the time period during which such transfer may be
consummated shall be extended until the expiration of 5 days after such
waiting period shall have expired.
(z) If the Grantor declines to accept the Offer or does not
respond to the Grantee prior to the expiration of the Offer Period, the
Grantee may transfer all such Offered Shares to the proposed transferee in
accordance with the terms of such transfer set forth in the Offer Notice;
provided that such transfer must occur no later than 75 days after the date
the Offer Notice was received by the Grantor or five days after the
expiration of any statutory waiting period applicable to such transfer,
whichever is later. If the Grantee does not consummate the transfer of
such Offered Shares in accordance with the time limitations set forth
above, the Grantee may not sell any such Offered Shares without repeating
the procedures set forth in this Section 8(b).
(c) In connection with any vote or action by written consent of the
shareholders of the Grantor relating to any matter, Grantee shall vote or act by
written consent with respect to (and to cause each of its Affiliates that
beneficially own Shares to vote or act by written consent with respect to) any
Option Shares beneficially owned by it, at Grantee's option, either (i)
proportionately on the same basis as the other holders of Shares so vote or (ii)
as recommended by the Board of Directors; provided that the Grantee shall be
entitled to vote its Option Shares in its discretion (and not in such
proportion or as so recommended) with respect to any transaction submitted to
holders of Shares pursuant to which Option Shares beneficially owned by Grantee
or any of its Affiliates will not be entitled to receive (or will not be
permitted to elect to receive on an equitable basis with the Shares held by all
other shareholders), in such transaction, the same consideration as Shares held
by all other shareholders of the Grantor.
(d) The Grantee covenants and agrees with the Grantor that, following the
date that the Option becomes exercisable, it shall not, and shall cause each of
its subsidiaries not to, directly or indirectly, acquire, or agree to acquire,
by purchase or otherwise, beneficial ownership of any Shares, other than
pursuant to any rights Grantee may have under the Option, the Merger Agreement,
and the Stockholders' Agreement, or by way of stock dividends, stock
reclassifications or other distributions or offerings made available to holders
of Shares generally.
SECTION 9. 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.
SECTION 10. Notice. All notices and other communications given or made
------
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, and (ii) on the third business day after deposit in
the U.S. mail, if mailed by registered or certified mail (postage prepaid,
return receipt requested), in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
6
(a) If to the Grantee:
Securitas AB
Berkshire House
Feltham Corporate Centre
3 Maple Way
Feltham
Middlesex TW13 7AW
United Kingdom
Attention: President
Facsimile: +44 208 867 0007
With a copy to:
Dunnington, Bartholow & Miller LLP
Promenade Office Park
4165 East Thousand Oaks Boulevard
Suite 101
Westlake Village, CA 91362-3810
Attention: Frederick W. London, Esq.
Facsimile: (805) 374-1132
(b) If to the Grantor:
Burns International Services Corporation
200 S. Michigan Avenue
Chicago, IL 60604
Attention: General Counsel
Facsimile: (312) 322-8509
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Peter R. Douglas, Esq.
Facsimile: (212) 450-3336
SECTION 11. Expenses. Except as otherwise expressly set forth herein or
--------
in the Merger Agreement, all fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs and expenses.
SECTION 12. Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7
SECTION 13. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the maximum extent possible.
SECTION 14. Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement and the Merger Agreement (including the other documents referred to
therein) constitute the entire agreement and supersede any and all other prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof, and this Agreement is not
intended to confer upon any other person any rights or remedies hereunder.
SECTION 15. Assignment. Neither this Agreement, nor any right or
----------
obligation hereunder, shall be assigned by operation of law or otherwise.
SECTION 16. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State.
SECTION 17. Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed by the parties hereto.
SECTION 18. Waiver. Any party hereto may (a) extend the time for the
------
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties of the other
parties hereto contained herein or in any document delivered pursuant hereto and
(c) waive compliance by the other parties hereto with any of their agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party. The failure of any
party hereto to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
SECTION 19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but both of which shall
constitute one and the same agreement.
SECTION 20. Termination. The right to exercise the Option granted pursuant
-----------
to this Agreement shall, subject to the provisions of Section 3(a), terminate at
the earlier of (i) the Effective Time and (ii) thirty (30) days after the date
on which an event described in Section 2(d) hereof occurs.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
SECTION 21. Profit Limitation. Notwithstanding any other provision of
-----------------
this Agreement, in no event shall the Grantee's Total Profit (as defined below)
exceed $18 million and, if it otherwise would exceed such amount, the Grantee,
at it sole election, shall either (a) reduce the number of Company Common Shares
required to be delivered by the Grantor pursuant to the Stock Exercise Notice,
(b) deliver to the Grantor for cancellation Shares previously purchased by the
Grantee, (c) reduce the cash payable to the Grantee pursuant to Section 1(c)
hereof, (d) pay cash or other consideration to the Grantor or (e)
8
undertake any combination thereof, so that the Grantee's Total Profit shall not
exceed $18 million after taking into account the foregoing actions.
Notwithstanding any other provision of this Agreement, the 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 $18 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 $18 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 the Grantee
with respect to the Termination Fee, Expenses and pursuant to Section 1(c )
hereof and (ii) (x) the net cash amounts received by the Grantee from any sale
of Shares (or any other securities into which such Shares are converted or
exchanged) to any person unaffiliated with the Grantee within one year after the
Closing Date, 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 the Grantee may propose to exercise the Option shall be
the Total Profit determined as of the date of the Stock Exercise Notice assuming
that the Option were exercised on such date for such number of Shares and
assuming that such Shares, together with all other Shares held by the Grantee
and its affiliates as of such date, were sold for cash at the closing market
price for the Company Common Shares as of the end of the regular session on the
NYSE Composite Tape on the preceding trading day (less customary brokerage
commissions).
SECTION 22. Public Announcements. So long as this Agreement is in effect,
--------------------
the Grantor and the Grantee shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement and the transaction contemplated hereby and shall not issue, or permit
their affiliates to issue, any such press release or make any such public
statement before such consultation, except as may be required by law, or by any
national securities exchange or an interdealer quotation system designated by
the National Association of Securities Dealers, Inc.
9
IN WITNESS WHEREOF, the Grantor and the Grantee have caused this Agreement
to be executed as of the date first written above.
BURNS INTERNATIONAL SERVICES
CORPORATION
By: /s/ John Edwardson
--------------------------------
Name: John Edwardson
Title: President and Chief Executive Officer
SECURITAS AB
By: /s/ Thomas Berglund
--------------------------------
Name: Thomas Berglund
Title: President and Chief Executive Officer
10