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EXHIBIT 10.3
OPTION AND STOCK AGREEMENT
THIS IS AN AGREEMENT (this "Agreement"), dated as of May 12,
1995, between First Financial Management Corporation, a Georgia corporation
("FFMC"), and William E. Sagan ("Executive"), an executive of Employee Benefit
Plans, Inc., a Delaware corporation ("EBP").
W I T N E S S E T H:
WHEREAS, EBP and FFMC propose to enter into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement") pursuant
to which EBP would be merged with a wholly-owned subsidiary of FFMC and the
holders of EBP's Common Stock, par value $0.01 per share ("EBP Stock"), would
receive shares of FFMC's Common Stock, par value $0.10 per share ("FFMC Stock")
for shares of EBP Stock (the "Merger");
WHEREAS, FFMC, as a condition to its willingness to enter into
the Merger Agreement, has required Executive to grant to FFMC, effective upon
execution of the Merger Agreement by FFMC and EBP, the purchase rights set
forth in this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase of Restricted Stock. Executive hereby
agrees to sell, and FFMC hereby agrees to purchase, effective as of the
effective time of the Merger, as defined in the Merger Agreement (the
"Effective Time"), all of the fifty thousand (50,000) shares of EBP Stock held
by Executive which are subject to restricted stock agreements (the "Restricted
Shares"), at a purchase price of fourteen and 70/100 dollars ($14.70) per share
in cash for each Restricted Share purchased. The purchase of the Restricted
Shares by FFMC shall be consummated simultaneously with the consummation of the
Merger.
2. Purchase of Options. Executive hereby agrees to
sell, and FFMC agrees to cause EBP, as a wholly-owned subsidiary of FFMC as of
the Effective Time, to repurchase, all of the outstanding options to acquire
EBP Stock held by Executive (the "Options") for an amount in cash equal to
$14.70 per share of EBP Stock subject to each such option less the amount of
the option exercise price to acquire each such share. Such purchase shall
occur simultaneously with, or as soon as practicable following, the
consummation of the Merger.
3. Call Option. Executive hereby grants to FFMC the
exclusive right and option (the "Call Option"), exercisable in FFMC's sole
discretion, to purchase all or any portion of the shares of FFMC Stock, if any,
acquired by Executive pursuant to the forty-two thousand (42,000) performance
share units awarded to Executive under EBP's
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Long Term Incentive Performance Plan or upon conversion of shares of EBP Stock
acquired pursuant to such units into shares of FFMC stock at the Effective Time
(collectively, the "Acquired FFMC Shares"), for a purchase price equal to the
last closing price of FFMC Stock on the New York Stock Exchange on the trading
day next preceding the date on which notice of exercise of such Call Option is
given to Executive. The purchase rights provided in this Section 3 shall be
exercisable by FFMC as of the Effective Time and for 90 days thereafter, or, if
earlier, until termination of this Agreement. FFMC's election to purchase the
Acquired FFMC Shares shall be exercised by giving notice to Executive not less
than five business days prior to the date on which the purchase is to be
consummated, which FFMC notice shall specify the shares of FFMC Stock that FFMC
elects to purchase, the purchase price for such shares (determined pursuant to
this Section 3) and the date selected by FFMC for consummation of the purchase.
4. Payment and Delivery of Certificate(s). In
connection with the consummation of any purchase pursuant to Sections 1, 2 or 3
(a "Closing"):
(a) FFMC or an affiliate (including EBP) will
make payment to Executive of the aggregate purchase price for the shares being
purchased or options repurchased in immediately available funds by wire
transfer to a bank designated by Executive prior to such Closing; and
(b) Executive will deliver to FFMC against
payment to Executive as provided in Section 4(a), a certificate or certificates
representing the number of shares of FFMC Stock or EBP Stock so purchased by
FFMC duly endorsed or with executed blank stock power attached, in either event
with signature guaranteed such that registered ownership of such shares may be
registered for transfer on the books of FFMC or EBP, or in the event of
repurchase of Options by EBP, will deliver all option agreements and option
certificates (if any) evidencing Executive's ownership of such Options, for
cancellation by EBP.
5. Legending of Certificates; Nominee Shares. Executive
agrees to submit to FFMC, upon its request, all certificates representing the
Acquired FFMC Shares so that FFMC may note thereon a legend referring to the
option and purchase rights granted to it by this Agreement. If any of the
Acquired FFMC Shares beneficially owned by Executive are held of record by a
brokerage firm in "street name" or in the name of any other nominee (a
"Nominee," and, as to such Shares, "Nominee Shares"), Executive agrees that,
upon written notice by FFMC so requesting, Executive will within five days of
the giving of such notice execute and deliver to FFMC a limited power of
attorney in such form as shall be reasonably satisfactory to FFMC enabling FFMC
to require the Nominee to submit to FFMC the certificates representing such
Nominee Shares for notation of the above-referenced legend thereon.
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6. Representations and Warranties of Executive.
Executive represents and warrants to FFMC that:
(a) Executive is the sole beneficial owner of
fifty thousand (50,000) Restricted Shares and Options covering one hundred
seventeen thousand (117,000) shares of EBP Stock; and Executive has good title
to the Restricted Shares and the Options, and will maintain good title to the
Acquired FFMC Shares for so long as such shares are subject to the Call Option,
in each case free and clear of any agreements, liens, adverse claims or
encumbrances whatsoever, except for restrictions imposed under the terms of the
documents pursuant to which Executive acquired the Restricted Shares and the
Options and federal securities law restrictions applicable to the resale of the
Acquired FFMC Shares.
(b) Executive has the full right, power and
authority to enter into this Agreement, and this Agreement has been duly and
validly executed and delivered by Executive and is a valid and binding
agreement, enforceable against Executive in accordance with its terms.
(c) The execution, delivery and performance of
this Agreement will not, with or without the giving of notice or the passage of
time, (i) violate any judgment, injunction or order of any court, arbitrator or
governmental agency applicable to Executive, or (ii) conflict with, result in
the breach of any provision of, constitute a default under, or require the
consent of any third party under, any agreement, instrument, judgment, order or
decree to which Executive is a party or by which Executive may be bound.
7. Additional Covenants of Executive. Executive hereby
covenants and agrees that upon execution of the Merger Agreement:
(a) Executive will not enter into any
transaction, take any action, or by inaction permit any event to occur that
would result in any of the representations or warranties of such Executive
herein contained not being true and correct;
(b) Until the termination of this Agreement,
Executive shall not transfer, pledge, hypothecate, transfer by gift, or
otherwise dispose of the Restricted Shares, the Options or the Acquired FFMC
Shares in any manner whatsoever or agree to do any of the foregoing, except as
permitted by this Agreement; and
(c) Executive shall execute and deliver any
additional documents reasonably necessary or desirable, in the opinion of
FFMC's counsel, to implement and effect the provisions of this Agreement.
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8. Representations and Warranties of FFMC. FFMC
represents and warrants to Executive that FFMC 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 have been
duly authorized by all necessary corporate action on the part of FFMC. This
Agreement has been duly executed and delivered by FFMC and is a valid and
binding agreement, enforceable against FFMC in accordance with its terms.
9. Cooperation as to Regulatory Matters. FFMC will, and
Executive will use reasonable efforts to, seek all consents, authorizations,
clearances, orders or approvals of any executive, judicial or other public
authority, agency, department, bureau, division, unit or other public body,
person or entity required on the part of Executive in connection with the
transactions contemplated hereby. Executive shall cooperate fully and promptly
with FFMC's efforts to obtain any and all necessary approvals and to make any
filings under federal and state securities laws necessary in connection with
the transactions contemplated hereby.
10. Termination. This Agreement shall terminate on the
earlier of (i) 90 days after the Effective Time or (ii) termination of the
Merger Agreement.
11. Binding Effect; Assignment. All rights and authority
granted herein by Executive shall survive the death or incapacity of such
Executive. This Agreement shall inure to the benefit of and be binding upon
the parties and their respective heirs, personal representatives, successors
and permitted assigns. FFMC may assign its rights and obligations hereunder to
an entity controlled by or under common control with FFMC. Executive shall not
assign its rights or obligations hereunder without FFMC's written consent
except pursuant to Executive's last will and testament or applicable laws of
intestate succession.
12. Notices. All notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or by Federal Express or other recognized overnight delivery
service, addressed to the respective party at the applicable address below, on
the date of such personal delivery or on the date deposited with such overnight
delivery service:
If to FFMC: First Financial Management Corporation
3 Corporate Square, Suite 700
Atlanta, Georgia 30329
Attn: Randolph L. M. Hutto, Senior
Executive Vice President,
General Counsel
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If to Executive: William E. Sagan
1300 French Creek Drive
Wayzata, Minnesota 55391
Any party may change the foregoing address from time to time by giving the
other party notice thereof.
13. Injunctive Relief; Remedies Cumulative.
(a) Each party hereto acknowledges that the other
party will be irreparably harmed and that there will be no adequate remedy at
law for a violation of any of the covenants or agreements of such party that
are contained in this Agreement. It is accordingly agreed that, in addition to
any other remedies that may be available to the non-breaching party upon the
breach by any other party of such covenants and agreements, the non-breaching
party shall have the right to obtain injunctive relief to restrain any breach
or threatened breach of such covenants or agreements or otherwise to obtain
specific performance of any of such covenants or agreements.
(b) No remedy conferred upon or reserved to any
party herein is intended to be exclusive of any other remedy, and every remedy
shall be cumulative and in addition to every other remedy herein or now or
hereafter existing at law, in equity or by statute.
14. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia, without
regard to the principles of conflicts of laws thereof.
15. Counterparts. This Agreement may be executed in two
or more counterparts, all of which together shall constitute a single
agreement.
16. Effect of Partial Invalidity. Whenever possible,
each provision of this Agreement shall be construed in such a manner as to be
effective and valid under applicable law. If any provision of this Agreement
or the application thereof to any party or circumstance shall be prohibited by
or invalid under applicable law, such provisions shall be ineffective to the
extent of such prohibition without invalidating the remainder of such provision
or any other provisions of this Agreement or the application of such provision
to the other party or other circumstances.
[Signatures on following page]
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IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first above written.
EXECUTIVE:
/s/ William E. Sagan
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William E. Sagan
FIRST FINANCIAL MANAGEMENT CORPORATION
/s/ M. Tarlton Pittard
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M. Tarlton Pittard
Vice Chairman, Chief Financial
Officer and Treasurer
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AMENDMENT NO. 1 TO
OPTION AND STOCK AGREEMENT
THIS AMENDMENT NO. 1 TO OPTION AND STOCK AGREEMENT (this "Amendment"),
dated as of August 31, 1995, is by and among First Financial Management
Corporation, a Georgia corporation ("FFMC"), and William E. Sagan
("Executive"), an executive of Employee Benefit Plans, Inc., a Delaware
corporation ("EBP"), and amends that certain Option and Stock Agreement between
the parties entered into effective May 12, 1995 (the "Agreement").
RECITALS:
WHEREAS, FFMC and Executive desire to amend the Agreement in certain
respects as provided herein.
STATEMENT OF AMENDMENT:
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements of the parties herein and in the Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS.
a) Call Option. Section 3 of the Agreement is hereby deleted in its
entirety.
b) Legending of Certificates; Nominee Shares. Section 5 of the Agreement
is hereby deleted in its entirety.
c) References to "Acquired FFMC Shares." All references to "Acquired FFMC
Shares" in the Agreement are hereby deleted in their entirety.
2. GENERAL. As hereby amended, all terms and provisions of the Agreement
shall continue in full force and effect.
3. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall be an original, and each of which shall constitute one and
the same amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment effective the
date first appearing above.
EXECUTIVE:
/s/ William E. Sagan
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William E. Sagan
FIRST FINANCIAL MANAGEMENT
CORPORATION
/s/ M. Tarlton Pittard
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M. Tarlton Pittard
Vice Chairman, Chief Financial Officer
and Treasurer