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EXHIBIT 10.34
OPTION ISSUANCE AGREEMENT
AGREEMENT, dated as of January 1, 1998 by and between The SABRE Group
Holdings, Inc., a Delaware corporation (the "Corporation"), and US Airways,
Inc., a Delaware corporation ("US Airways").
W I T N E S S E T H :
WHEREAS, The SABRE Group, Inc., a Delaware corporation and wholly-owned
subsidiary of the Corporation ("TSG"), the Corporation and US Airways have
previously entered into an Interim Operation and Migration Agreement (the
"Interim Operation and Migration Agreement"), pursuant to which US Airways has
retained TSG to perform certain interim operation services and migration
services, an Information Technology Services Agreement (the "Information
Technology Services Agreement"), pursuant to which US Airways has retained TSG
to provide certain data processing services, enhanced data processing services
and other services and, whereas in connection with such agreements, TSG, the
Corporation and US Airways have previously entered into an Agreement of Purchase
and Sale (the "Agreement of Purchase and Sale") pursuant to which US Airways has
agreed to sell, and TSG has agreed to purchase, certain assets.
WHEREAS, in connection with the Agreement of Purchase and Sale, the
Interim Operation and Migration Agreement and the Information Technology
Services Agreement (collectively, the "Agreements"), the Corporation wishes to
issue to US Airways the options in the forms of Exhibit A hereto ("Option One")
and Exhibit B hereto ("Option Two," and collectively with Option One, the
"Options") to purchase shares of Class A Common Stock of the Corporation, par
value $.01 per share (the "Option Shares");
WHEREAS, the Corporation is, pursuant to an Assignment and Assumption
Agreement, dated as of the date hereof, by and among the Corporation, TSG and US
Airways (the "Assignment and Assumption Agreement") assigning to TSG its rights,
and TSG is assuming all obligations of the Corporation, in each case under the
Agreements, and
WHEREAS, the Corporation is, pursuant to the Assignment and Assumption
Agreement, directing US Airways to transfer to TSG any and all consideration
otherwise to be furnished to the Corporation in consideration of the issuance of
the Options.
ACCORDINGLY, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Issuance of Options. The Corporation hereby agrees to issue on
the first day after the date hereof on which a share of Class A Common Stock of
the
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Corporation, par value $.01 per share shall be traded on the New York Stock
Exchange to US Airways the Options (the "Issuance") and US Airways hereby
directs the Corporation to deliver the Options to PNC Bank, National
Association, as escrow agent (the "Escrow Agent") pursuant to the escrow
agreement (the "Escrow Agreement"), dated as of the date of such Options, by and
between US Airways and the Escrow Agent, a copy of which is attached hereto as
Exhibit C.
SECTION 2. Representations and Warranties of the Corporation. As of the
date hereof, the Corporation hereby represents and warrants to US Airways as
follows:
2.1. Organization and Good Standing. The Corporation is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
2.2. Authorization of the Agreement and Options. (a) The Corporation has
all requisite power and authority to enter into and carry out the transactions
contemplated by this Agreement and the Options.
(b) The Corporation has taken all action required by law and necessary
corporate action to authorize the execution, delivery and performance of this
Agreement and the Options and the consummation of the transactions contemplated
hereby and thereby. This Agreement and the Options have been duly and validly
authorized, executed and delivered by it, and this Agreement and the Options
constitute the legal, valid and binding obligations of it, enforceable against
it in accordance with their respective terms.
2.3. Authorization and Issuance of Option Shares. The authorization,
reservation, issuance, sale and delivery of the Option Shares have been duly and
validly authorized by all requisite corporate action on the part of the
Corporation, and when issued, sold and delivered in accordance with this
Agreement and the Options, the Option Shares will be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof, free and clear of any mortgages, judgments, claims,
liens, security interests, pledges, escrows, charges or other encumbrances of
any kind or character whatsoever ("Encumbrances"), other than Encumbrances, if
any, arising as a result of actions taken by US Airways.
2.4. No Conflict. The execution and delivery by the Corporation of this
Agreement and the Options and the consummation by the Corporation of the
transactions contemplated hereby and thereby and the compliance by the
Corporation with the provisions hereof and thereof will not, subject to the
expiration or termination of any required waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended, and the rules and regulations promulgated thereunder ("HSR")
(a) violate any provision of law, statute, rule or regulation, or any ruling,
writ, injunction, order, judgment or decree of any court, administrative agency
or other governmental body applicable to it, or any of its properties or assets,
(b) conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any Encumbrance upon any of its properties
or assets under, any contract, agreement, indenture, mortgage, guaranty, lease,
license or understanding, written or oral to which it is a party or (c) violate
its certificate of incorporation or by-laws or other organizational documents.
SECTION 3. Representations and Warranties of US Airways. As of the date
hereof, US Airways represents and warrants to the Corporation as follows:
(a) US Airways is acquiring (subject to potential cancellation in
connection with the provision of the Alternative Mechanism under Section 4.2)
the Options under this Agreement, and will acquire any Option Shares, for its
own account and not with a view to the distribution thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act").
(b) US Airways understands that (i) the Options have not been, and that
the Option Shares will not be, registered under the Securities Act or any state
securities laws, by reason of their issuance by the Corporation in a transaction
exempt from the registration requirements thereof and (ii) in addition to any
other limitations on transfer contained in the Options, the Options and the
Option Shares may not be sold unless such disposition is registered under the
Securities Act and applicable state securities laws or is exempt from
registration thereunder.
(c) US Airways further understands that any exemption from registration
afforded by Rule 144 (the provisions of which are known to US Airways)
promulgated under the Securities Act depends on the satisfaction of various
conditions, in each case, which the Corporation is not obligated to cause the
satisfaction of, and that, if applicable to the Option Shares, Rule 144 may
afford the basis for sales only in limited amounts.
(d) US Airways believes it has received all the information it
considers necessary or appropriate for deciding to acquire (subject to potential
cancellation in connection with the provision of the Alternative Mechanism under
Section 4.2) the Options. US Airways further represents that it has had an
opportunity to ask questions and receive answers from the Corporation regarding
the terms and conditions of the
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Options and the business, properties, prospects and financial condition of the
Corporation.
(e) US Airways has not employed any broker or finder in connection with
the transactions contemplated by this Agreement.
(f) US Airways is duly organized, validly existing and in good standing
under the laws of the state of its incorporation and has all power and authority
to enter into and perform this Agreement, the Options and the Escrow Agreement
(collectively, the "Documents"). US Airways has taken all action required by law
and necessary corporate action to authorize the execution, delivery and
performance of this Agreement and each other Document and the consummation of
the transactions contemplated hereby and thereby. Each Document has been duly
and validly authorized, executed and delivered by US Airways, and constitutes
the legal, valid and binding obligations of it, enforceable against it in
accordance with its terms.
(g) The execution and delivery by US Airways of each of the Documents
does not, and the consummation by US Airways of the transactions contemplated
hereby and thereby and compliance by US Airways with the provisions hereof and
thereof will not, subject to the expiration or termination of any required
waiting period under HSR, (a) violate any provision of law, statute, rule or
regulation, or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body applicable to it, or any
of its properties or assets, (b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with due notice or lapse
of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
Encumbrance upon any of its properties or assets under, any contract, agreement,
indenture, mortgage, guaranty, lease, license or understanding, written or oral
to which it is a party or (c) violate its certificate of incorporation or
by-laws or other organizational documents.
SECTION 4. Covenants.
4.1. No Market Manipulation. During the 60 day period immediately preceding
the exercise of any Option, US Airways shall not, without the prior written
consent of the Corporation, offer, purchase, sell, contract to purchase or sell
or otherwise acquire or dispose of any securities of the Corporation that are
substantially similar to the Option Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent the
right to receive, Option Shares or any such substantially similar securities.
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4.2. Alternative Mechanism . (a) (i) With respect to Option One, at any
time after June 30, 1999 but prior to December 31, 1999, US Airways may exercise
its rights under this Section 4.2(a)(i) in lieu of, and thereby cancel, its
corresponding rights under such Option, provided that US Airways has concluded,
in its good faith reasonable judgment, that it is not then able to deliver the
certificate in the form attached as Exhibit A to Option One. US Airways shall be
deemed to have exercised its rights under this Section 4.2(a)(i) by delivering
to the Corporation a notice of proposal ("Notice of Proposal"), together with
supporting reasoning and calculations, setting forth a means (the "Alternative
Mechanism") for the Corporation to provide value, which shall be determined
taking into account present value principles, in an amount equal to the Cash-Out
Amount under Section 2.02(c) of such Option (the "Option Value"). For purposes
of computing the Option Value under this Section 4.2(a)(i), US Airways' delivery
of the Notice of Proposal shall be treated as an Exercise Notice within the
meaning of Section 2.02(a) of Option One, and the Option Value of the
Alternative Mechanism that US Airways is entitled to receive shall equal the
Cash-Out Amount that it would have received under Section 2.02(c) of such Option
if US Airways had presented to the Corporation an Exercise Notice on the date of
delivery of the Notice of Proposal and the Corporation had elected its Cash-Out
Right under Section 2.02(c). For avoidance of doubt, (i) US Airways shall not be
required to deliver a certificate in the form attached as Exhibit A of Option
One in connection with the exercise of its rights under this Section 4.2 and
(ii) if Option One has terminated prior to the delivery of a Notice of Proposal,
the Option Value shall be zero. The Alternative Mechanism proposed by US Airways
shall specify the form in which Option Value is to be delivered by the
Corporation, which may include, but shall not be limited to cash and/or price
reductions under the Information Technology Services Agreement, to whom such
value shall be delivered, including, without limitation, US Airways, its
shareholders or the Escrow Agent (provided, that US Airways is not required
under any Document to propose that such value be delivered to the Escrow Agent),
and the timing of any such delivery. Within twenty-one days of receipt of the
Notice of Proposal, the Corporation shall deliver to US Airways a notice either
accepting US Airways' proposal or setting forth the Corporation's
counter-proposal for an Alternative Mechanism and supporting reasoning and
calculations (the "Counter Proposal"). If, within twenty-one days after delivery
of the Corporation's Counter Proposal, the parties are unable, in good faith, to
agree on an Alternative Mechanism having a value equal to the Option Value, the
dispute shall be resolved in accordance with the Dispute Resolution Appendix set
forth as Exhibit D hereto (the "Dispute Resolution Exhibit"). In no event,
however, shall the resolution of such dispute result in (i) US Airways failing
to be entitled to an amount of value reasonably believed to equal the Option
Value (taking into account present value principles) or (ii) the Corporation
being
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required, without its consent, to issue stock of the Corporation or to
cause the issuance of stock of any affiliate thereof.
(ii) With respect to Option Two, at any time after July 1, 2000 but
prior to January 1, 2001, if at such time US Airways has not concluded, in its
good faith reasonable judgment, that if such Option were then exercisable, US
Airways would be able to deliver the certificate in the form attached as Exhibit
A to Option Two, US Airways may exercise its rights under the Section 4.2(a)(ii)
in lieu of, and thereby cancel its corresponding rights under such Option. US
Airways shall be deemed to have exercised its rights under this Section
4.2(a)(ii) by delivering to the Corporation a Notice of Proposal, together with
supporting reasoning and calculations, setting forth an Alternative Mechanism
for the Corporation to provide value, which shall be determined taking into
account present value principles, in an amount equal to the value of such Option
("Option Two Value") as of the date of delivery of such Notice of Proposal. For
avoidance of doubt, (i) US Airways shall not be required to deliver a
certificate in the form attached as Exhibit A of Option Two in connection with
the exercise of its rights under this Section 4.2 and (ii) if Option Two has
terminated prior to the delivery of a Notice of Proposal, the Option Two Value
shall be zero. The Alternative Mechanism proposed by US Airways shall specify
the form in which Option Two Value is to be delivered by the Corporation, and
the timing of any such delivery. Within twenty-one days of receipt of the Notice
of Proposal, the Corporation shall deliver to US Airways a notice either
accepting US Airways' proposal or setting forth the Corporation's Counter
Proposal. If, within twenty-one days after delivery of the Corporation's Counter
Proposal, the parties are unable, in good faith, to agree on an Alternative
Mechanism having a value equal to the Option Two Value, the dispute shall be
resolved in accordance with the Dispute Resolution Exhibit. In no event,
however, shall the resolution of such dispute result in (i) US Airways failing
to be entitled to an amount of value reasonably believed to equal to the Option
Two Value (taking into account present value principles) or (ii) the Corporation
being required, without its consent, to issue stock of the Corporation or to
cause the issuance of stock of any affiliate thereof.
(b) If (x) US Airways fails to exercise, prior to the expiration or
termination thereof, Option One or its rights with respect to such Option under
Section 4.2(a)(i) and (y) US Airways has not concluded in its good faith
reasonable judgment by December 31, 1999 that it is able to deliver the
certificate in the form attached as Exhibit A to Option One, then US Airways
shall automatically become entitled on the expiration or termination of Option
One under this Section 4.2(b) to an Alternative Mechanism with an Option Value
(determined taking into account present value principles) equal to the Cash-Out
Amount under Section 2.02(c) of Option One, determined as if US Airways had
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delivered a Notice of Proposal under Section 4.2(a)(i) on the Expiration Date
(as defined in such Option) or termination date, as applicable, (in either case,
the "Expired Option Value") of such Option. For the avoidance of doubt, if the
termination date occurs prior to the time Option One is exercisable by its
terms, the Expired Option Value shall be zero. US Airways shall have the right
to propose, within twenty-one days after the Expiration Date or termination
date, as applicable, the Alternative Mechanism (specifying, as provided in
Section 4.2(a)(i), the form in which the Expired Option Value is to be delivered
by the Corporation, to whom such value shall be delivered, and the timing of any
delivery) for the Expired Option Value. Within twenty-one days of receipt of US
Airways' proposal, or, if none shall have been delivered, within forty-two days
of the Expiration Date or termination date, as applicable, the Corporation shall
deliver to US Airways a notice either accepting US Airways proposal (if
applicable) or setting forth a Counter Proposal. If, within twenty-one days
after delivery of the Corporation's Counter Proposal, the parties are unable, in
good faith, to agree on an Alternative Mechanism having a value equal to the
Expired Option Value, the dispute shall be resolved in accordance with the
Dispute Resolution Exhibit. In no event, however, shall the resolution result in
(i) US Airways failing to be entitled to an amount of value reasonably believed
to equal the Expired Option Value (taking into account present value principles)
or (ii) the Corporation being required, without its consent, to issue stock of
the Corporation or to cause the issuance of stock of any affiliate thereof.
(c) The Corporation shall deliver the Alternative Mechanism, as
promptly as practicable after its final determination pursuant to Section
4.2(a)(i), Section 4.2(a)(ii) or Section 4.2(b), as applicable, or at such other
time as is contemplated by the Alternative Mechanism.
4.3. Termination of Services Agreements. If, prior to the fifteenth annual
anniversary of the effective date thereof, US Airways terminates the Information
Technology Services Agreement pursuant to Sections 23.3, 23.4, 23.5 or 23.6
thereof, TSG terminates the Information Technology Services Agreement pursuant
to Section 23.1(B) thereof or TSG terminates the Interim Operation and Migration
Agreement pursuant to Section 22.1(B) thereof, US Airways shall pay to the
Corporation on the later of the effective date of such termination or the date
on which the Corporation delivers an alternative mechanism pursuant to Section
4.2(b), if applicable, in immediately available funds by wire transfer to a bank
account designated in writing by the Corporation an amount equal to (i) the sum
of (a) the remainder of the Closing Price (as defined in any exercised Option)
minus the Exercise Price (as defined in any exercised Option) as of the date of
exercise of such Option, multiplied by the number of Option Shares issued
thereunder, (b) any cash amount paid by the Corporation pursuant to its right to
cash-out
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any exercised Option, (c) the Option Value and Option Two Value in respect of
which an Alternative Mechanism has been delivered by the Corporation pursuant to
Section 4.2(a)(i) or Section 4.2(a)(ii), plus (d) the Expired Option Value in
respect of which an Alternative Mechanism has been delivered by the Corporation
pursuant to Section 4.2(b) multiplied by (ii) a fraction, the numerator of which
is the remainder of 180 minus the number of calendar months elapsed since the
effective date of the Information Technology Services Agreement and prior to the
effective date of the termination of such agreement and the denominator of which
is 180.
4.4. Delivery to Escrow Agent. (a) Upon exercise of Option One, US Airways
shall direct the Corporation to deliver the Option Shares issuable, or other
proceeds (including, without limitation, cash) payable, upon such exercise to
the Escrow Agent.
(b) US Airways shall not deliver to the Escrow Agent the certificate
contemplated by Section 3(a) of the Escrow Agreement prior to the earliest of
the expiration, termination or exercise of Option One.
4.5. Reporting. The parties intend and agree that upon exercise of any
Option issued hereunder, or upon receipt of the Alternative Mechanism pursuant
to Section 4.2, US Airways shall report as income an amount equal to the
Cash-Out Amount under Section 2.02(c) of such Option (or, in the case of receipt
of the Alternative Mechanism pursuant to Section 4.2(a)(ii), such other
appropriate amount), and the Corporation shall deduct or capitalize, as
appropriate, an amount equal to the Cash-Out Amount under Section 2.02(c) of
such Option (or, in the case of receipt of the Alternative Mechanism pursuant to
Section 4.2(a)(ii), such other appropriate amount).
SECTION 5. Transfer Taxes. US Airways agrees to bear any transfer,
documentary, stamp or other similar taxes which may be determined to be payable
in connection with the execution and delivery and performance of this Agreement.
SECTION 6. Further Assurances. At any time or from time to time after the
date hereof, the Corporation, on the one hand, and US Airways, on the other
hand, agree to cooperate with each other, and at the request of the other party,
to execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby relating to
the Issuance and to otherwise carry out the intent of the parties hereunder.
SECTION 7. Successors and Assigns. This Agreement shall bind and inure to
the benefit of the Corporation and US Airways and their respective successors
and
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assigns; except that this Agreement may not be assigned by the Corporation
(other than to an entity to whom TSG has assigned all of its rights and
delegated all of its duties consistent with, and under, the Information
Technology Services Agreement) without the prior written consent of US Airways,
which consent may be withheld in its sole discretion, or by US Airways (other
than (i) to wholly-owned subsidiaries or entities of which US Airways is a
wholly-owned subsidiary or (ii) to an entity to whom US Airways has assigned all
of its rights and delegated all of its duties consistent with, and under, the
Information Technology Services Agreement, provided, that for purposes of this
clause (ii), such entity is not, at the time of such assignment, a member of the
Corporation's "affiliated group," a "person" "related" to the Corporation or to
any member of the Corporation's "affiliated group" or "acting in concert with"
any of the foregoing "persons", as such terms are used in Treasury Reg.
1.1504-4(c)(4)(ii)) without the prior written consent of the Corporation, which
consent may be withheld in its sole discretion.
SECTION 8. Entire Agreement. This Agreement and the other writings referred
to herein or delivered pursuant hereto which form a part hereof contain the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto, excluding the Agreement of Purchase and Sale and any agreements
attached as exhibits thereto.
SECTION 9. Notices. Any notice, request, response, demand, claim or other
communication required or permitted hereunder by any party hereto to any other
party shall be in writing and transmitted, delivered or sent by (a) personal
delivery, (b) courier or messenger service, whether overnight or same day (c)
certified United States mail postage prepaid, return receipt requested, or (d)
prepaid telecopy or facsimile,
if to US Airways to:
US Airways, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
if to the Corporation to:
The SABRE Group Holdings, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4319
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
The SABRE Group Holdings, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4204
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
and a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or at such other address for a party as shall be specified by like notice. Each
communication transmitted, delivered, or sent (a) in person, by courier or
messenger service, or by certified United States mail (postage prepaid and
return receipt requested) shall be deemed given, received, and effective on the
date delivered to or refused by the intended recipient (with the return receipt
or the equivalent record of the courier or messenger being deemed conclusive
evidence of delivery or refusal); or (b) by telecopy or facsimile transmission
or by electronic mail shall be deemed given, received, and effective on the date
of actual receipt (with the confirmation of transmission or the electronic
receipt being deemed conclusive evidence of such receipt, except where the
intended recipient has promptly notified the other party that the transmission
is illegible).
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Nevertheless, if the date of delivery or transmission is not a business day, or
if the delivery or transmission is after 5:00 p.m., local time in Fort Worth,
Texas, on a business day, the communication shall be deemed given, received, and
effective on the next business day.
SECTION 10. Dispute Resolution.
10.1. Disputes in General. Except as otherwise stated in this Agreement,
the parties shall resolve any dispute, disagreement, claim, or controversy
arising in connection with or relating to this Agreement, or the validity,
interpretation, performance or breach of this Agreement ("Dispute") in
accordance with the procedure or process by which a Dispute must be resolved
(except as otherwise stated or modified in this Agreement) as described in the
Dispute Resolution Exhibit. Nevertheless, if any Person (as defined in the
Agreement of Purchase and Sale) other than the parties and their affiliates:
A. Has initiated a lawsuit or other judicial, administrative, or
arbitration proceedings against or involving either or both of the parties in
which a Dispute will be resolved, or
B. Is a necessary participant in any judicial, administrative, or
arbitration proceedings to resolve a Dispute and cannot be joined by either or
both of the parties in an arbitration of that Dispute under Section B.3 of the
Dispute Resolution Exhibit,
so that (in either case) the Dispute Resolution Procedure is or will be
ineffective, then the parties need not use or follow the Dispute Resolution
Procedure to resolve that Dispute, although the submission to jurisdiction in
Section B.5 of the Dispute Resolution Exhibit shall apply if necessary.
10.2. Information for Resolution. The parties shall freely share, and may
disclose to any mediator or arbitrator as part of any Dispute resolution
proceeding, any and all reasonably requested relevant information needed to
facilitate the resolution of any Dispute and any and all information likely to
lead to such relevant information.
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10.3. Continuity During Dispute. In the event of a Dispute, the parties
shall continue to perform their respective obligations pursuant to this
Agreement.
10.4. Parties' Agreement. Nothing in this Section 10 or the Dispute
Resolution Procedure prevents the parties from resolving any Dispute by mutual
agreement at any time.
SECTION 11. Amendments. The terms and provisions of this Agreement may be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, only pursuant to the written consent of the parties hereto.
SECTION 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law.
SECTION 13. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid, but
if any provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.
SECTION 14. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Option
Issuance Agreement as of the date first above written.
THE SABRE GROUP HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President and Chief
Financial Officer
US AIRWAYS, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: President and Chief Operating Officer
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NEITHER THE OPTIONS REPRESENTED THIS CERTIFICATE NOR THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT. NEITHER SUCH OPTIONS NOR SUCH SHARES MAY BE
OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN COMPLIANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES AND "BLUE SKY"
LAWS.
OPTION TO PURCHASE
3,000,000 SHARES OF CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
THE SABRE GROUP HOLDINGS, INC.
NO. SOUS-1
This certifies that for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, US Airways, Inc., a Delaware
corporation (the "Optionee") is entitled to purchase at the Exercise Price from
The SABRE Group Holdings, Inc., a Delaware corporation (the "Corporation"),
subject to the terms and conditions hereof, at any time after 9:00 A.M., Fort
Worth, Texas time, on the Initial Exercise Date and before 5:00 P.M., local
time in Fort Worth, Texas on the Expiration Date, the number of fully paid and
non-assessable shares of Common Stock stated above.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Option, the
following capitalized terms shall have the following respective meanings:
(a) Agreement of Purchase and Sale: The Agreement of Purchase and
Sale, dated as of December 15, 1997, by and among US Airways Group, Inc., a
Delaware corporation, the Optionee, the Corporation and TSG.
(b) Business Day: A day other than a Saturday, Sunday, national
holiday in the United States, or other day in which banks in the State of Texas
are authorized by law to remain closed.
(c) Cap: $90.00 per Option Share, as such number may be adjusted
from time to time pursuant to Article III hereof.
(d) Closing Price: The average of the highest and lowest trading
prices on the NYSE for the Notice Date, per share of Common Stock as reported
on the Composite
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Transactions Tape (or, if not listed on the NYSE, as reported on any other
national securities exchange or automated quotation system on which the Common
Stock is listed or quoted, as reported in the Wall Street Journal (Northeast
edition), or, if not reported thereby, any other authoritative source) or, if
not listed on the NYSE or reported on any other national securities exchange or
automated quotation system, the fair market value of a share of Common Stock as
determined by agreement of the Optionee and the Corporation or, in the absence
of such an agreement, by an independent investment banking firm selected by
agreement of an independent investment banking firm selected by the Optionee
and an independent investment banking firm selected by the Corporation, which
agreed upon investment banking firm shall be engaged by the Corporation ( the
cost of which engagement will be divided equally between the Corporation and
the Optionee).
(e) Common Stock: Class A Common Stock, par value $.01 per share,
of the Corporation.
(f) Composite Transactions Tape: A security price reporting
service that includes all transactions in a security on each of the exchanges
and in the over-the-counter market.
(g) Exercise Price: $27.00 per Option Share, as such price may be
adjusted from time to time pursuant to Article III hereof.
(h) Expiration Date: December 31, 1999.
(i) HSR: The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
(j) Information Technology Services Agreement: The Information
Technology Services Agreement, dated as of December 15, 1997, by and between
the Optionee, the Corporation and TSG.
(k) Initial Exercise Date: June 30, 1999.
(l) Interim Operation and Migration Agreement: The Interim
Operation and Migration Agreement, dated as of December 15, 1997, by and
between the Optionee, the Corporation and TSG.
(m) Issue Date: The date of execution of this Option as set forth
on page 14 hereof.
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(n) Merger: A consolidation or merger of the Corporation with or
into any other corporation or corporations (other than a consolidation or
merger in which the Corporation is the continuing Corporation).
(o) NYSE: New York Stock Exchange.
(p) Option Issuance Agreement: The Option Issuance Agreement,
dated as of January 1, 1998, by and among the Optionee and the Corporation.
(q) Option Shares: Shares of Common Stock and/or securities
purchased or purchasable upon exercise of this Option.
(r) Person: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government of any department
or agency thereof.
(s) TSG: The SABRE Group, Inc., a Delaware corporation and
wholly-owned subsidiary of the Corporation.
ARTICLE II
DURATION AND EXERCISE OF OPTION
Section 2.01: Duration of Option. The Optionee may exercise this
Option at any time and from time to time after 9:00 A.M., Fort Worth, Texas
time, on the Initial Exercise Date, and before 5:00 P.M., local time in Fort
Worth, Texas time, on the Expiration Date. If (i) this Option is not exercised
prior to 5:00 P.M., local time in Fort Worth, Texas on the Expiration Date,
(ii) the Optionee shall terminate the Information Technology Services Agreement
pursuant to Sections 23.3, 23.4, 23.5 or 23.6 thereof, (iii) TSG shall
terminate the Information Technology Services Agreement pursuant to Section
23.1(B) thereto or TSG shall terminate the Interim Operation and Migration
Agreement pursuant to Section 22.1(B) thereto, or (iv) the Optionee shall
deliver a notice pursuant to Section 4.2(a)(i) of the Option Issuance
Agreement, then this Option shall become void, and all rights hereunder shall
immediately thereupon cease.
Section 2.02: Exercise of Option.
(a) The Optionee may exercise this Option, in whole and not in
part, by presenting, or causing to be presented, to the Corporation after 9:00
A.M., Fort Worth, Texas time, on the Initial Exercise Date and prior to 5:00
P.M., Fort Worth, Texas time on the Expiration Date, (i) a written notice (an
"Exercise Notice"; the date of which being herein referred to as the "Notice
Date") containing the Optionee's irrevocable election to exercise this Option,
and a date not earlier than fifteen Business Days nor later than twenty
Business Days from the Notice Date for the closing (the "Option Closing") of
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such purchase (an "Option Closing Date") and (ii) a certificate of a duly
authorized officer of the Optionee in the form of Exhibit A hereto. Upon
presentation of such written notice and certificate, this Option shall be
deemed exercised for all purposes hereunder. Any Option Closing will be at an
agreed location and time on the applicable Option Closing Date or at such later
date as may be necessary so as to comply with HSR and obtain or make any
consents, approvals, orders, notifications or authorizations, required in
connection with the requested issuance of Option Shares (the "Regulatory
Approvals").
(b) Notwithstanding anything to the contrary contained herein, any
exercise of this Option and purchase of Option Shares shall be subject to
compliance with applicable laws and regulations, which may prohibit the
purchase of all the Option Shares specified in the Exercise Notice without
first obtaining or making certain Regulatory Approvals. In such event, if this
Option is otherwise exercisable and the Optionee wishes to exercise this
Option, this Option may be exercised in accordance with Section 2.02(a) and the
Optionee shall acquire the maximum number of Option Shares specified in the
Exercise Notice that the Optionee is then permitted to acquire under the
applicable laws and regulations, and if the Optionee thereafter (but prior to
the Expiration Date) obtains the Regulatory Approvals to acquire the remaining
balance of the Option Shares specified in the Exercise Notice, then the
Optionee shall be entitled to acquire such remaining balance. The Corporation
agrees to assist the Optionee in seeking the Regulatory Approvals. The
Corporation may require the Optionee to pay a sum sufficient to cover any
reasonable out-of-pocket expenses incurred in connection with any assistance.
(c) Notwithstanding anything to the contrary contained herein, if
at any time prior to the tenth Business Day after its receipt of the Exercise
Notice, the Corporation presents to the Optionee a notice exercising its right
(the "Cash-Out Right") pursuant to this Section 2.02(c), then the Corporation
shall pay to the Optionee or its designee, on the Option Closing Date, in
exchange for the cancellation of the Option, an amount (the "Cash-Out Amount")
in cash equal to the lesser of (A) the number of Option Shares which would
otherwise be purchased on the Option Closing Date (calculated without giving
effect to any reduction in such number pursuant to Section 3.01(g) but giving
effect to any other adjustment pursuant to Article III or Section 2.02(b))
multiplied by the difference between (i) the Closing Price and (ii) the
Exercise Price, as adjusted pursuant to Article III and (B) the number of
Option Shares which would otherwise be purchased on the Option Closing Date
(calculated without giving effect to any reduction in such number pursuant to
Section 3.01(g) but giving effect to any other adjustment pursuant to Article
III or Section 2.02(b)) multiplied by the difference between (i) the Cap, as
adjusted pursuant to Article III, and (ii) the Exercise Price, as adjusted
pursuant to Article III.
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(d) At any Option Closing, either (A) the Optionee shall pay, or
shall cause to be paid, to the Corporation in immediately available funds by
wire transfer to a bank account designated in writing by the Corporation at
least two Business Days prior to such Option Closing an amount equal to the
product of (i) the product of the Exercise Price, as adjusted pursuant to
Article III, multiplied by the number of Option Shares issuable hereunder
(calculated without giving effect to any adjustment pursuant to Article III
(other than pursuant to Section 3.01(d)) or Section 2.02(b) but giving effect
to any adjustment pursuant to Section 3.01(d)), multiplied by (ii) a fraction,
the numerator of which is the number of Option Shares to be purchased at such
Option Closing (calculated giving effect to any adjustments pursuant to Article
III or Section 2.02(b)) and the denominator of which is the number of Option
Shares issuable hereunder (calculated giving effect to any adjustment pursuant
to Article III but not giving effect to Section 2.02(b)) or (B) if the
Corporation shall have exercised its Cash-Out Right pursuant to Section 2.02
(c), the Corporation shall pay to the Optionee or its designee in immediately
available funds by wire transfer to a bank account designated in writing by the
Optionee at least two Business Days prior to such Option Closing, the Cash-Out
Amount.
(e) At any Option Closing, (i) simultaneously with the delivery by
the Optionee or its designee of immediately available funds as provided in
Section 2.02(d) and the surrender of this Option, the Corporation will deliver
to the Optionee or its designee a certificate or certificates representing the
Option Shares to be purchased at such Option Closing, or (ii) if the
Corporation shall have exercised its Cash-Out Right pursuant to Section 2.02
(c), simultaneous with the delivery by the Corporation of immediately available
funds as provided in Section 2.02(d), the Optionee shall surrender, or shall
cause the surrender of, this Option.
(f) The Optionee shall pay, or shall cause to be paid, any and all
stock transfer and similar taxes which may be payable in respect of the issue
of any Option Shares or payment of cash to the Optionee.
Section 2.03: Reservation of Shares. The Corporation hereby agrees
that at all times there shall be reserved for issuance and delivery upon
exercise of this Option such number of shares of Common Stock from time to time
issuable upon exercise of this Option. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of
all preemptive rights.
Section 2.04: Fractional Shares. The Corporation shall not be
required to issue any fraction of a share of its capital stock in connection
with the exercise of this Option, and in any case where the Optionee would,
except for the provisions of this Section 2.04, be entitled under the terms of
this Option to receive a fraction of a share upon the exercise
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of this Option, the Corporation shall, upon the exercise of this Option and
receipt of the Exercise Price, issue the largest number of whole shares
purchasable upon exercise of this Option. The Corporation shall, in lieu of
issuing any fractional share, pay the Optionee a sum in cash equal to the
product of the Closing Price and such fractional interest.
Section 2.05: Registration Rights. The Corporation shall, if
requested by the Optionee at any time and from time to time within one year
after the exercise of this Option, as expeditiously as possible prepare and
file up to two registration statements under the Securities Act of 1933, as
amended (the "Securities Act") if such registration is necessary in order to
permit the sale or other disposition of any or all Option Shares in accordance
with the intended method of sale or other disposition stated by the Optionee,
including, if the conditions thereto are satisfied, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and the Corporation shall use reasonable efforts to qualify such shares under
any applicable state securities laws. The Corporation shall use reasonable
efforts to cause each such registration statement to become effective, to
obtain all consents or waivers of other parties which are required therefor,
and to keep such registration statement effective for such period not in excess
of 180 calendar days from the day such registration statement first becomes
effective as may be reasonably necessary to effect such sale or other
disposition. The obligations of the Corporation hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
up to 60 calendar days in the aggregate if the Board of Directors of the
Corporation shall have determined that the filing of such registration
statement or the maintenance of its effectiveness would require premature
disclosure of material nonpublic information that would materially and
adversely affect the Corporation or otherwise interfere with or adversely
affect any pending or proposed offering of securities of the Corporation or any
other material transaction involving the Corporation. Any registration
statement prepared and filed under this Section 2.05, and any sale covered
thereby, shall be at the Optionee's expense provided, that the Corporation
shall bear the costs of its own legal counsel. The Optionee shall provide all
information reasonably requested by the Corporation for inclusion in any
registration statement to be filed hereunder. In connection with any
registration pursuant to this Section 2.05, the Corporation and the Optionee
shall provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification, and contribution in
connection with such registration.
Section 2.06: Listing. If, at any time, Common Stock or any other
securities to be acquired upon exercise of this Option are then listed on the
NYSE (or any other national securities exchange or automated quotation system),
the Corporation shall promptly file an application to list the shares of Common
Stock or other securities to be acquired upon exercise of this Option on the
NYSE (and any such other national securities exchange or automated quotation
system) and shall use reasonable efforts to obtain approval of such listing as
promptly as practicable.
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ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Option Shares shall be
subject to adjustment from time to time as provided in this Article III.
Section 3.01: Mechanical Adjustments.
(a) In case the Corporation shall at any time or from time to time
after the date hereof (i) pay any dividend, or make any distribution, on the
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, (iv) issue by reclassification of
the shares of Common Stock any shares of capital stock of the Corporation or
(v) experience any other change in its corporate or capital structure
(including, without limitation, the declaration or payment of a dividend (other
than an ordinary periodic dividend) of cash or other property) (each of the
events described in the foregoing clauses (i) through (v) referred to as an
"Adjustment Event"), then and in each such case, the Exercise Price in effect
immediately prior to such Adjustment Event or the record date therefor,
whichever is earlier, shall be adjusted so that the Optionee shall be entitled
to receive the number and type of shares of Common Stock or other capital stock
or other assets or property (including, without limitation, cash) which such
Optionee would have owned or have been entitled to receive after the happening
of any of the Adjustment Events described above, had such Option been converted
into Common Stock immediately prior to the happening of such Adjustment Event
or the record date therefor, whichever is earlier. An adjustment made pursuant
to this Section 3.01(a) shall become effective (x) in the case of any such
dividend or distribution, immediately after the close of business on the record
date for the determination of holders of shares of Common Stock entitled to
receive such dividend or distribution, or (y) in the case of such subdivision,
reclassification, combination or other change in corporate or capital
structure, at the close of business on the day upon which such corporate action
becomes effective.
(b) If the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution and shall thereafter, and before such dividend or distribution is
paid or delivered to shareholders entitled thereto, legally abandon its plan to
pay or deliver such dividend or distribution, then no adjustment in the
Exercise Price then in effect shall be made by reason of the
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taking of such record, and any such adjustment previously made as a result of
the taking of such record shall be reversed.
(c) In the case of a Merger or a reorganization of the Corporation
or a reclassification of the capital stock of the Corporation (except a
transaction for which provision for adjustment is otherwise made in this
Section 3.01), the Option shall thereafter be exercisable into the number of
shares of stock or other securities or property (including, without limitation,
cash) to which a holder of the number of shares of Common Stock of the
Corporation deliverable upon exercise of such Option would have been entitled
upon such Merger, reorganization or reclassification; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the
rights and interest thereafter of the holders of the Option, to the end that
the provisions set forth herein (including provisions with respect to changes
in and other adjustments of the applicable conversion price) shall thereafter
be applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the exercise of the Option.
The Corporation shall not effect any such Merger unless prior to or
simultaneously with the consummation thereof the successor Corporation shall
assume by written instrument the obligation to deliver to the Optionee such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, each such holder is entitled to receive.
(d) Whenever the Exercise Price payable upon exercise of this
Option is adjusted pursuant to Section 3.01(a), the number of Option Shares
issuable hereunder shall simultaneously be adjusted by multiplying the number
of Option Shares initially issuable upon exercise of this Option (as set forth
on the front page of this Option) by the Exercise Price on the Issue Date and
dividing the product so obtained by the Exercise Price, as adjusted.
(e) Whenever the Exercise Price payable upon exercise of this
Option is adjusted pursuant to Section 3.01(a), the Cap shall simultaneously be
adjusted by multiplying the Cap immediately prior to such adjustment by the
Exercise Price, as adjusted pursuant to Section 3.01(a), and dividing the
product so obtained by the Exercise Price immediately prior to such adjustment.
(f) In the event that at any time, as a result of any adjustment
made pursuant to Section 3.01(a), the Optionee thereafter shall become entitled
to receive any shares of capital stock of the Corporation other than Common
Stock, thereafter the number of such other shares so receivable upon exercise
of any Option shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 3.01(a).
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(g) In the event that the Closing Price exceeds the Cap, the
Option Shares issuable upon exercise of this Option shall be reduced by the
quotient of (i) the product of (a) the excess of (y) the Closing Price, over
(z) the Cap, multiplied by (b) the number of Option Shares prior to such
adjustment, divided by (ii) the Closing Price.
Section 3.02: Notices of Adjustment. Whenever the number of Option
Shares or the Exercise Price is adjusted as herein provided, the Corporation
shall prepare and deliver forthwith to the Optionee a certificate signed by a
President or a Vice President, or by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth the
adjusted number of shares purchasable upon the exercise of this Option and the
Exercise Price of such shares after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which adjustment was made.
Section 3.03: Form of Option After Adjustments. The form of this
Option need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Option Shares, and Options theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Option, as initially issued.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF OPTIONEE
Section 4.01: No Rights as Shareholders; Notice to Optionees.
Nothing contained in this Option shall be construed as conferring upon the
Optionee any ownership or rights whatsoever as a shareholder of the
Corporation, including, without limitation, the right to vote, consent or
receive notice as a shareholder in respect of any meeting of shareholders for
the election of directors of the Corporation or of any other matter or the
right to receive dividends or receive proceeds upon the liquidation,
dissolution or winding up of the Corporation.
Section 4.02: Lost, Stolen, Mutilated or Destroyed Options. If this
Option is lost, stolen, mutilated or destroyed, the Corporation may, on such
reasonable terms as to indemnity or otherwise as it may in its reasonable
discretion impose (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination and tenor as, and
in substitution for, this Option.
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ARTICLE V
TRANSFER OF OPTIONS
Section 5.01: Transfer. Except as otherwise provided in Section
6.01, neither this Option nor any rights hereunder may be sold, transferred,
assigned or otherwise disposed of, in whole or in part, to any person without
the prior written consent of the Corporation, which consent may be withheld in
its sole discretion. Any such sale, transfer or other disposition of this
Option or any rights hereunder shall be made in accordance with and subject to
the provisions of the Securities Act, and the rules and regulations promulgated
thereunder.
Section 5.02: Restrictive Legend. Each Option Share issued upon
exercise of this Option shall bear a legend containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES AND "BLUE SKY" LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND APPLICABLE
STATE SECURITIES AND "BLUE SKY" LAWS."
The requirement that the above legend be placed upon certificates evidencing
any such securities shall cease and terminate upon the earliest of the
following events: (i) when such shares are transferred in a public offering,
(ii) when such shares are transferred pursuant to Rule 144 under the Securities
Act or (iii) when such shares are transferred in any other transaction if the
seller delivers to the Corporation an opinion of its counsel, which counsel and
opinion shall be reasonably satisfactory to the Corporation to the effect that
such legend is no longer necessary in order to protect the Corporation against
a violation by it of the Securities Act or any applicable state securities or
"blue sky" laws upon any sale or other disposition of such shares without
registration thereunder. Upon the occurrence of such event, the Corporation,
upon the surrender of certificates containing such legend, shall, at its own
expense, deliver to the holder of any such securities as to which the
requirement for such legend shall have terminated, one or more new certificates
evidencing such securities not bearing such legend.
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ARTICLE VI
OTHER MATTERS
Section 6.01: Successors and Assigns. Except as otherwise
contemplated by Section 2.01, the terms and provisions of this Option shall
bind and inure to the benefit of the Optionee and its permitted successors and
permitted assigns; except that this Option may not be assigned by the Optionee
(other than (i) to wholly-owned subsidiaries or entities of which the Optionee
is a wholly-owned subsidiary or (ii) to an entity to whom the Optionee has
assigned all of its rights and delegated all of its duties consistent with, and
under, the Information Technology Services Agreement, provided, that for
purposes of this clause (ii), such entity is not, at the time of such
assignment, a member of the Corporation's "affiliated group", a "person"
"related" to the Corporation or to any member of the Corporation's "affiliated
group" or "acting in concert with" any of the foregoing "persons", as such
terms are used in Treasury Reg. 1.1504-4(c)(4)(ii)) without the prior written
consent of the Corporation, which consent may be withheld in its sole
discretion.
Section 6.02: Entire Agreement. This Option, together with the
Agreement of Purchase and Sale and any agreements attached as exhibits thereto,
contains the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto.
Section 6.03: Amendments and Waivers. The terms and provisions of
this Option, including the provisions of this sentence, may be modified or
amended, or any of the provisions hereof waived, temporarily or permanently,
pursuant to the written consent of the Corporation and the Optionee.
Section 6.04: Counterparts. This Option may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
Section 6.05: Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law.
Section 6.06: Notice. Any notice, request, response, demand, claim
or other communication required or permitted hereunder by any party hereto to
any other party shall be in writing and transmitted, delivered or sent by (a)
personal delivery, (b) courier or messenger service, whether overnight or same
day (c) certified United States mail postage prepaid, return receipt requested,
or (d) prepaid telecopy or facsimile (except, that no Exercise Notice may be
provided by telecopy or facsimile),
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if to Optionee to:
US Airways, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
if to the Corporation to:
The SABRE Group Holdings, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4319
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
The SABRE Group Holdings Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4204
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
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and a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or at such other address for a party as shall be specified by like notice.
Each communication transmitted, delivered, or sent (a) in person, by courier or
messenger service, or by certified United States mail (postage prepaid and
return receipt requested) shall be deemed given, received, and effective on the
date delivered to or refused by the intended recipient (with the return receipt
or the equivalent record of the courier or messenger being deemed conclusive
evidence of delivery or refusal); or (b) by telecopy or facsimile transmission
or by electronic mail shall be deemed given, received, and effective on the
date of actual receipt (with the confirmation of transmission or the electronic
receipt being deemed conclusive evidence of such receipt, except where the
intended recipient has promptly notified the other party that the transmission
is illegible).
Nevertheless, if the date of delivery or transmission is not a Business Day, or
if the delivery or transmission is after 5:00 p.m., local time in Fort Worth,
Texas, on a Business Day, the communication shall be deemed given, received,
and effective on the next Business Day.
Section 6.07: Dispute Resolution.
(a) Except as otherwise stated in this Option, the parties shall
resolve any dispute, disagreement, claim, or controversy arising in connection
with or relating to this Option, or the validity, interpretation, performance
or breach of this Option ("Dispute") in accordance with the procedure or
process by which a Dispute must be resolved (except as otherwise stated or
modified in this Option) as described in the Dispute Resolution Appendix (as
defined in the Option Issuance Agreement). Nevertheless, if any Person (as
defined in the Agreement of Purchase and Sale) other than the parties and their
affiliates:
(i) Has initiated a lawsuit or other judicial,
administrative, or arbitration proceedings against or involving either or both
of the parties in which a Dispute will be resolved, or
(ii) Is a necessary participant in any judicial,
administrative, or arbitration proceedings to resolve a Dispute and cannot be
joined by either or both of the parties in an arbitration of that Dispute under
Section B.3 of the Dispute Resolution Appendix,
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so that (in either case) the Dispute Resolution Procedure is or will be
ineffective, then the parties need not use or follow the Dispute Resolution
Procedure to resolve that Dispute, although the submission to jurisdiction in
Section B.5 of the Dispute Resolution Exhibit shall apply if necessary.
(b) The parties shall freely share, and may disclose to any
mediator or arbitrator as part of any Dispute resolution proceeding, any and
all reasonably requested relevant information needed to facilitate the
resolution of any Dispute and any and all information likely to lead to such
relevant information.
(c) In the event of a Dispute, the parties shall continue to
perform their respective obligations pursuant to this Agreement.
(d) Nothing in this Section 6.07 or the Dispute Resolution
Procedure prevents the parties from resolving any Dispute by mutual agreement
at any time.
Section 6.08: Severability. Whenever possible, each provision of
this Option shall be interpreted in such manner as to be effective and valid,
but if any provision of this Option is held to be invalid or unenforceable in
any respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Option.
IN WITNESS WHEREOF, this Option has been duly, executed by the
Corporation under its corporate seal as of the 2nd day of January, 1998.
THE SABRE GROUP HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President and Chief
Financial Officer
Attest: /s/ Xxxxx X. Xxxxxxxx
---------------------
Assistant Secretary
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Exhibit A
Officer's Certificate
[Date]
The undersigned certifies that he is the duly elected, qualified and
acting ________________ of US Airways, Inc., a Delaware corporation (the
"Optionee") and as such, he is familiar with matters certified herein and is
authorized to execute this Certificate on behalf of the Optionee and, with
reference to Section 2.02(a) of that Option, No. _________, to purchase
3,000,000 shares of Class A Common Stock, par value $.01 per share, of The
SABRE Group Holdings, Inc. (capitalized terms used herein and not otherwise
defined herein have the respective meanings specified in such option) and that
Exercise Notice attached as Exhibit 1 hereto, he further certifies as follows:
1. Neither the exercise of the Option requested pursuant to the
Exercise Notice nor the receipt by the Optionee or its designee of Option
Shares upon such exercise does, as of the date hereof, or will, as of the
Option Closing Date, conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time,
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any encumbrance of any kind
or character upon any of Optionee's properties or assets under, any contract,
agreement, indenture, mortgage, guaranty, lease, license or understanding,
written or oral to which it is a party.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of the date first written above.
By:
-------------------------------------
Name:
Title:
I, ________________, Secretary of US Airways, Inc., do hereby certify
that _____________ is duly elected and qualified as ______________ of US
Airways, Inc. as of the date hereof, and that the signature set forth above is
such officer's signature.
By:
-------------------------------------
Name:
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NEITHER THE OPTIONS REPRESENTED BY THIS CERTIFICATE NOR THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT. NEITHER SUCH OPTIONS NOR SUCH SHARES MAY BE
OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN COMPLIANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES AND "BLUE SKY" LAWS.
OPTION TO PURCHASE
3,000,000 SHARES OF CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
THE SABRE GROUP HOLDINGS, INC.
NO. SOUS-2
This certifies that for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, US Airways, Inc., a Delaware
corporation (the "Optionee") is entitled to purchase at the Exercise Price from
The SABRE Group Holdings, Inc., a Delaware corporation (the "Corporation"),
subject to the terms and conditions hereof, at any time after 9:00 A.M., Fort
Worth, Texas time, on the Initial Exercise Date and before 5:00 P.M., local
time in Fort Worth, Texas on the Expiration Date, the number of fully paid and
non-assessable shares of Common Stock stated above.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Option, the
following capitalized terms shall have the following respective meanings:
(a) Agreement of Purchase and Sale: The Agreement of Purchase and
Sale, dated as of December 15, 1997, by and among US Airways Group, Inc., a
Delaware corporation, the Optionee, the Corporation and TSG.
(b) Business Day: A day other than a Saturday, Sunday, national
holiday in the United States, or other day in which banks in the State of Texas
are authorized by law to remain closed.
(c) Cap: $127.00 per Option Share, as such number may be adjusted
from time to time pursuant to Article III hereof.
30
(d) Closing Price: The average of the highest and lowest trading
prices on the NYSE for the Notice Date, per share of Common Stock as reported
on the Composite Transactions Tape (or, if not listed on the NYSE, as reported
on any other national securities exchange or automated quotation system on
which the Common Stock is listed or quoted, as reported in the Wall Street
Journal (Northeast edition), or, if not reported thereby, any other
authoritative source) or, if not listed on the NYSE or reported on any other
national securities exchange or automated quotation system, the fair market
value of a share of Common Stock as determined by agreement of the Optionee and
the Corporation or, in the absence of such an agreement, by an independent
investment banking firm selected by agreement of an independent investment
banking firm selected by the Optionee and an independent investment banking
firm selected by the Corporation, which agreed upon investment banking firm
shall be engaged by the Corporation ( the cost of which engagement will be
divided equally between the Corporation and the Optionee).
(e) Common Stock: Class A Common Stock, par value $.01 per share,
of the Corporation.
(f) Composite Transactions Tape: A security price reporting
service that includes all transactions in a security on each of the exchanges
and in the over-the-counter market.
(g) Exercise Price: $27.00 per Option Share, as such price may be
adjusted from time to time pursuant to Article III hereof.
(h) Expiration Date: January 2, 2013.
(i) HSR: The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
(j) Information Technology Services Agreement: The Information
Technology Services Agreement, dated as of December 15, 1997, by and between
the Optionee, the Corporation and TSG.
(k) Initial Exercise Date: January 2, 2003.
(l) Interim Operation and Migration Agreement: The Interim
Operation and Migration Agreement, dated as of December 15, 1997, by and
between the Optionee, the Corporation and TSG.
(m) Issue Date: The date of execution of this Option as set forth
on page 14 hereof.
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(n) Merger: A consolidation or merger of the Corporation with or
into any other corporation or corporations (other than a consolidation or
merger in which the Corporation is the continuing Corporation).
(o) NYSE: New York Stock Exchange.
(p) Option Issuance Agreement: The Option Issuance Agreement,
dated as of January 1, 1998, by and among the Optionee and the Corporation.
(q) Option Shares: Shares of Common Stock and/or securities
purchased or purchasable upon exercise of this Option.
(r) Person: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government of any department
or agency thereof.
(s) TSG: The SABRE Group, Inc., a Delaware corporation and
wholly-owned subsidiary of the Corporation.
ARTICLE II
DURATION AND EXERCISE OF OPTION
Section 2.01: Duration of Option. The Optionee may exercise this
Option at any time and from time to time after 9:00 A.M., Fort Worth, Texas
time, on the Initial Exercise Date, and before 5:00 P.M., local time in Fort
Worth, Texas time, on the Expiration Date. If (i) this Option is not exercised
prior to 5:00 P.M., local time in Fort Worth, Texas on the Expiration Date,
(ii) the Optionee shall terminate the Information Technology Services Agreement
pursuant to Sections 23.3, 23.4, 23.5 or 23.6 thereof, (iii) TSG shall
terminate the Information Technology Services Agreement pursuant to Section
23.1(B) thereto or TSG shall terminate the Interim Operation and Migration
Agreement pursuant to Section 22.1(B) thereto, or (iv) the Optionee shall
deliver a notice pursuant to Section 4.2(a)(ii) of the Option Issuance
Agreement, then this Option shall become void, and all rights hereunder shall
immediately thereupon cease.
Section 2.02: Exercise of Option.
(a) The Optionee may exercise this Option, in whole and not in
part, by presenting, or causing to be presented, to the Corporation after 9:00
A.M., Fort Worth, Texas time, on the Initial Exercise Date and prior to 5:00
P.M., Fort Worth, Texas time on the Expiration Date, (i) a written notice (an
"Exercise Notice"; the date of which being herein referred to as the "Notice
Date") containing the Optionee's irrevocable election to exercise this Option,
and a date not earlier than fifteen Business Days nor later than twenty
Business Days from the Notice Date for the closing (the "Option Closing") of
such purchase (an "Option Closing Date") and (ii) a certificate of a duly
authorized
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officer of the Optionee in the form of Exhibit A hereto. Upon presentation of
such written notice and certificate, this Option shall be deemed exercised for
all purposes hereunder. Any Option Closing will be at an agreed location and
time on the applicable Option Closing Date or at such later date as may be
necessary so as to comply with HSR and obtain or make any consents, approvals,
orders, notifications or authorizations, required in connection with the
requested issuance of Option Shares (the "Regulatory Approvals").
(b) Notwithstanding anything to the contrary contained herein, any
exercise of this Option and purchase of Option Shares shall be subject to
compliance with applicable laws and regulations, which may prohibit the
purchase of all the Option Shares specified in the Exercise Notice without
first obtaining or making certain Regulatory Approvals. In such event, if this
Option is otherwise exercisable and the Optionee wishes to exercise this
Option, this Option may be exercised in accordance with Section 2.02(a) and the
Optionee shall acquire the maximum number of Option Shares specified in the
Exercise Notice that the Optionee is then permitted to acquire under the
applicable laws and regulations, and if the Optionee thereafter (but prior to
the Expiration Date) obtains the Regulatory Approvals to acquire the remaining
balance of the Option Shares specified in the Exercise Notice, then the
Optionee shall be entitled to acquire such remaining balance. The Corporation
agrees to assist the Optionee in seeking the Regulatory Approvals. The
Corporation may require the Optionee to pay a sum sufficient to cover any
reasonable out-of-pocket expenses incurred in connection with any assistance.
(c) Notwithstanding anything to the contrary contained herein, if
at any time prior to the tenth Business Day after its receipt of the Exercise
Notice, the Corporation presents to the Optionee a notice exercising its right
(the "Cash-Out Right") pursuant to this Section 2.02(c), then the Corporation
shall pay to the Optionee or its designee, on the Option Closing Date, in
exchange for the cancellation of the Option, an amount (the "Cash-Out Amount")
in cash equal to the lesser of (A) the number of Option Shares which would
otherwise be purchased on the Option Closing Date (calculated without giving
effect to any reduction in such number pursuant to Section 3.01(g) but giving
effect to any other adjustment pursuant to Article III or Section 2.02(b))
multiplied by the difference between (i) the Closing Price and (ii) the
Exercise Price, as adjusted pursuant to Article III and (B) the number of
Option Shares which would otherwise be purchased on the Option Closing Date
(calculated without giving effect to any reduction in such number pursuant to
Section 3.01(g) but giving effect to any other adjustment pursuant to Article
III or Section 2.02(b)) multiplied by the difference between (i) the Cap, as
adjusted pursuant to Article III, and (ii) the Exercise Price, as adjusted
pursuant to Article III.
(d) At any Option Closing, either (A) the Optionee shall pay, or
shall cause to be paid, to the Corporation in immediately available funds by
wire transfer to a bank
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account designated in writing by the Corporation at least two Business Days
prior to such Option Closing an amount equal to the product of (i) the product
of the Exercise Price, as adjusted pursuant to Article III, multiplied by the
number of Option Shares issuable hereunder (calculated without giving effect to
any adjustment pursuant to Article III (other than pursuant to Section 3.01(d))
or Section 2.02(b) but giving effect to any adjustment pursuant to Section
3.01(d)), multiplied by (ii) a fraction, the numerator of which is the number
of Option Shares to be purchased at such Option Closing (calculated giving
effect to any adjustments pursuant to Article III or Section 2.02(b)) and the
denominator of which is the number of Option Shares issuable hereunder
(calculated giving effect to any adjustment pursuant to Article III but not
giving effect to Section 2.02(b)) or (B) if the Corporation shall have
exercised its Cash-Out Right pursuant to Section 2.02 (c), the Corporation
shall pay to the Optionee or its designee in immediately available funds by
wire transfer to a bank account designated in writing by the Optionee at least
two Business Days prior to such Option Closing, the Cash-Out Amount.
(e) At any Option Closing, (i) simultaneously with the delivery by
the Optionee or its designee of immediately available funds as provided in
Section 2.02(d) and the surrender of this Option, the Corporation will deliver
to the Optionee or its designee a certificate or certificates representing the
Option Shares to be purchased at such Option Closing, or (ii) if the
Corporation shall have exercised its Cash-Out Right pursuant to Section 2.02
(c), simultaneous with the delivery by the Corporation of immediately available
funds as provided in Section 2.02(d), the Optionee shall surrender, or shall
cause the surrender of, this Option.
(f) The Optionee shall pay, or shall cause to be paid, any and all
stock transfer and similar taxes which may be payable in respect of the issue
of any Option Shares or payment of cash to the Optionee.
Section 2.03: Reservation of Shares. The Corporation hereby agrees
that at all times there shall be reserved for issuance and delivery upon
exercise of this Option such number of shares of Common Stock from time to time
issuable upon exercise of this Option. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of
all preemptive rights.
Section 2.04: Fractional Shares. The Corporation shall not be
required to issue any fraction of a share of its capital stock in connection
with the exercise of this Option, and in any case where the Optionee would,
except for the provisions of this Section 2.04, be entitled under the terms of
this Option to receive a fraction of a share upon the exercise of this Option,
the Corporation shall, upon the exercise of this Option and receipt of the
Exercise Price, issue the largest number of whole shares purchasable upon
exercise of this
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Option. The Corporation shall, in lieu of issuing any fractional share, pay
the Optionee a sum in cash equal to the product of the Closing Price and such
fractional interest.
Section 2.05: Registration Rights. The Corporation shall, if
requested by the Optionee at any time and from time to time within one year
after the exercise of this Option, as expeditiously as possible prepare and
file up to two registration statements under the Securities Act of 1933, as
amended (the "Securities Act") if such registration is necessary in order to
permit the sale or other disposition of any or all Option Shares in accordance
with the intended method of sale or other disposition stated by the Optionee,
including, if the conditions thereto are satisfied, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and the Corporation shall use reasonable efforts to qualify such shares under
any applicable state securities laws. The Corporation shall use reasonable
efforts to cause each such registration statement to become effective, to
obtain all consents or waivers of other parties which are required therefor,
and to keep such registration statement effective for such period not in excess
of 180 calendar days from the day such registration statement first becomes
effective as may be reasonably necessary to effect such sale or other
disposition. The obligations of the Corporation hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
up to 60 calendar days in the aggregate if the Board of Directors of the
Corporation shall have determined that the filing of such registration
statement or the maintenance of its effectiveness would require premature
disclosure of material nonpublic information that would materially and
adversely affect the Corporation or otherwise interfere with or adversely
affect any pending or proposed offering of securities of the Corporation or any
other material transaction involving the Corporation. Any registration
statement prepared and filed under this Section 2.05, and any sale covered
thereby, shall be at the Optionee's expense provided, that the Corporation
shall bear the costs of its own legal counsel. The Optionee shall provide all
information reasonably requested by the Corporation for inclusion in any
registration statement to be filed hereunder. In connection with any
registration pursuant to this Section 2.05, the Corporation and the Optionee
shall provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification, and contribution in
connection with such registration.
Section 2.06: Listing. If, at any time, Common Stock or any other
securities to be acquired upon exercise of this Option are then listed on the
NYSE (or any other national securities exchange or automated quotation system),
the Corporation shall promptly file an application to list the shares of Common
Stock or other securities to be acquired upon exercise of this Option on the
NYSE (and any such other national securities exchange or automated quotation
system) and shall use reasonable efforts to obtain approval of such listing as
promptly as practicable.
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ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Option Shares shall be
subject to adjustment from time to time as provided in this Article III.
Section 3.01: Mechanical Adjustments.
(a) In case the Corporation shall at any time or from time to time
after the date hereof (i) pay any dividend, or make any distribution, on the
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, (iv) issue by reclassification of
the shares of Common Stock any shares of capital stock of the Corporation or
(v) experience any other change in its corporate or capital structure
(including, without limitation, the declaration or payment of a dividend (other
than an ordinary periodic dividend) of cash or other property) (each of the
events described in the foregoing clauses (i) through (v) referred to as an
"Adjustment Event"), then and in each such case, the Exercise Price in effect
immediately prior to such Adjustment Event or the record date therefor,
whichever is earlier, shall be adjusted so that the Optionee shall be entitled
to receive the number and type of shares of Common Stock or other capital stock
or other assets or property (including, without limitation, cash) which such
Optionee would have owned or have been entitled to receive after the happening
of any of the Adjustment Events described above, had such Option been converted
into Common Stock immediately prior to the happening of such Adjustment Event
or the record date therefor, whichever is earlier. An adjustment made pursuant
to this Section 3.01(a) shall become effective (x) in the case of any such
dividend or distribution, immediately after the close of business on the record
date for the determination of holders of shares of Common Stock entitled to
receive such dividend or distribution, or (y) in the case of such subdivision,
reclassification, combination or other change in corporate or capital
structure, at the close of business on the day upon which such corporate action
becomes effective.
(b) If the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution and shall thereafter, and before such dividend or distribution is
paid or delivered to shareholders entitled thereto, legally abandon its plan to
pay or deliver such dividend or distribution, then no adjustment in the
Exercise Price then in effect shall be made by reason of the taking of such
record, and any such adjustment previously made as a result of the taking of
such record shall be reversed.
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(c) In the case of a Merger or a reorganization of the Corporation
or a reclassification of the capital stock of the Corporation (except a
transaction for which provision for adjustment is otherwise made in this
Section 3.01), the Option shall thereafter be exercisable into the number of
shares of stock or other securities or property (including, without limitation,
cash) to which a holder of the number of shares of Common Stock of the
Corporation deliverable upon exercise of such Option would have been entitled
upon such Merger, reorganization or reclassification; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the
rights and interest thereafter of the holders of the Option, to the end that
the provisions set forth herein (including provisions with respect to changes
in and other adjustments of the applicable conversion price) shall thereafter
be applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the exercise of the Option.
The Corporation shall not effect any such Merger unless prior to or
simultaneously with the consummation thereof the successor Corporation shall
assume by written instrument the obligation to deliver to the Optionee such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, each such holder is entitled to receive.
(d) Whenever the Exercise Price payable upon exercise of this
Option is adjusted pursuant to Section 3.01(a), the number of Option Shares
issuable hereunder shall simultaneously be adjusted by multiplying the number
of Option Shares initially issuable upon exercise of this Option (as set forth
on the front page of this Option) by the Exercise Price on the Issue Date and
dividing the product so obtained by the Exercise Price, as adjusted.
(e) Whenever the Exercise Price payable upon exercise of this
Option is adjusted pursuant to Section 3.01(a), the Cap shall simultaneously be
adjusted by multiplying the Cap immediately prior to such adjustment by the
Exercise Price, as adjusted pursuant to Section 3.01(a), and dividing the
product so obtained by the Exercise Price immediately prior to such adjustment.
(f) In the event that at any time, as a result of any adjustment
made pursuant to Section 3.01(a), the Optionee thereafter shall become entitled
to receive any shares of capital stock of the Corporation other than Common
Stock, thereafter the number of such other shares so receivable upon exercise
of any Option shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 3.01(a).
(g) In the event that the Closing Price exceeds the Cap, the
Option Shares issuable upon exercise of this Option shall be reduced by the
quotient of (i) the product of
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(a) the excess of (y) the Closing Price, over (z) the Cap, multiplied by (b)
the number of Option Shares prior to such adjustment, divided by (ii) the
Closing Price.
Section 3.02: Notices of Adjustment. Whenever the number of Option
Shares or the Exercise Price is adjusted as herein provided, the Corporation
shall prepare and deliver forthwith to the Optionee a certificate signed by a
President or a Vice President, or by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth the
adjusted number of shares purchasable upon the exercise of this Option and the
Exercise Price of such shares after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which adjustment was made.
Section 3.03: Form of Option After Adjustments. The form of this
Option need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Option Shares, and Options theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Option, as initially issued.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF OPTIONEE
Section 4.01: No Rights as Shareholders; Notice to Optionees.
Nothing contained in this Option shall be construed as conferring upon the
Optionee any ownership or rights whatsoever as a shareholder of the
Corporation, including, without limitation, the right to vote, consent or
receive notice as a shareholder in respect of any meeting of shareholders for
the election of directors of the Corporation or of any other matter or the
right to receive dividends or receive proceeds upon the liquidation,
dissolution or winding up of the Corporation.
Section 4.02: Lost, Stolen, Mutilated or Destroyed Options. If this
Option is lost, stolen, mutilated or destroyed, the Corporation may, on such
reasonable terms as to indemnity or otherwise as it may in its reasonable
discretion impose (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination and tenor as, and
in substitution for, this Option.
ARTICLE V
TRANSFER OF OPTIONS
Section 5.01: Transfer. Except as otherwise provided in Section
6.01, neither this Option nor any rights hereunder may be sold, transferred,
assigned or otherwise disposed of, in whole or in part, to any person without
the prior written consent of the Corporation,
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which consent may be withheld in its sole discretion. Any such sale, transfer
or other disposition of this Option or any rights hereunder shall be made in
accordance with and subject to the provisions of the Securities Act, and the
rules and regulations promulgated thereunder.
Section 5.02: Restrictive Legend. Each Option Share issued upon
exercise of this Option shall bear a legend containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES AND "BLUE SKY" LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND APPLICABLE
STATE SECURITIES AND "BLUE SKY" LAWS."
The requirement that the above legend be placed upon certificates evidencing
any such securities shall cease and terminate upon the earliest of the
following events: (i) when such shares are transferred in a public offering,
(ii) when such shares are transferred pursuant to Rule 144 under the Securities
Act or (iii) when such shares are transferred in any other transaction if the
seller delivers to the Corporation an opinion of its counsel, which counsel and
opinion shall be reasonably satisfactory to the Corporation to the effect that
such legend is no longer necessary in order to protect the Corporation against
a violation by it of the Securities Act or any applicable state securities or
"blue sky" laws upon any sale or other disposition of such shares without
registration thereunder. Upon the occurrence of such event, the Corporation,
upon the surrender of certificates containing such legend, shall, at its own
expense, deliver to the holder of any such securities as to which the
requirement for such legend shall have terminated, one or more new certificates
evidencing such securities not bearing such legend.
ARTICLE VI
OTHER MATTERS
Section 6.01: Successors and Assigns. Except as otherwise
contemplated by Section 2.01, the terms and provisions of this Option shall
bind and inure to the benefit of the Optionee and its permitted successors and
permitted assigns; except that this Option may not be assigned by the Optionee
(other than (i) to wholly-owned subsidiaries or entities of which the Optionee
is a wholly-owned subsidiary or (ii) to an entity to whom
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the Optionee has assigned all of its rights and delegated all of its duties
consistent with, and under, the Information Technology Services Agreement,
provided, that for purposes of this clause (ii), such entity is not, at the
time of such assignment, a member of the Corporation's "affiliated group", a
"person" "related" to the Corporation or to any member of the Corporation's
"affiliated group" or "acting in concert with" any of the foregoing "persons",
as such terms are used in Treasury Reg. 1.1504-4(c)(4)(ii)) without the prior
written consent of the Corporation, which consent may be withheld in its sole
discretion.
Section 6.02: Entire Agreement. This Option, together with the
Agreement of Purchase and Sale and any agreements attached as exhibits thereto,
contains the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto.
Section 6.03: Amendments and Waivers. The terms and provisions of
this Option, including the provisions of this sentence, may be modified or
amended, or any of the provisions hereof waived, temporarily or permanently,
pursuant to the written consent of the Corporation and the Optionee.
Section 6.04: Counterparts. This Option may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
Section 6.05: Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law.
Section 6.06: Notice. Any notice, request, response, demand, claim
or other communication required or permitted hereunder by any party hereto to
any other party shall be in writing and transmitted, delivered or sent by (a)
personal delivery, (b) courier or messenger service, whether overnight or same
day (c) certified United States mail postage prepaid, return receipt requested,
or (d) prepaid telecopy or facsimile (except, that no Exercise Notice may be
provided by telecopy or facsimile),
if to Optionee to:
US Airways, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
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with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
if to the Corporation to:
The SABRE Group Holdings, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4319
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
The SABRE Group Holdings Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Mail Drop 4204
Xxxx Xxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
and a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or at such other address for a party as shall be specified by like notice.
Each communication transmitted, delivered, or sent (a) in person, by courier or
messenger service, or by certified United States mail (postage prepaid and
return receipt requested) shall be deemed given, received, and effective on the
date delivered to or refused by the intended recipient (with the return receipt
or the equivalent record of the courier or messenger being deemed conclusive
evidence of delivery or refusal); or (b) by telecopy or facsimile transmission
or by electronic mail shall be deemed given, received, and effective on the
date of actual receipt (with the confirmation of transmission or the electronic
receipt being deemed conclusive evidence of such receipt, except where the
intended recipient has promptly notified the other party that the transmission
is illegible).
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Nevertheless, if the date of delivery or transmission is not a Business Day, or
if the delivery or transmission is after 5:00 p.m., local time in Fort Worth,
Texas, on a Business Day, the communication shall be deemed given, received,
and effective on the next Business Day.
Section 6.07: Dispute Resolution.
(a) Except as otherwise stated in this Option, the parties shall
resolve any dispute, disagreement, claim, or controversy arising in connection
with or relating to this Option, or the validity, interpretation, performance
or breach of this Option ("Dispute") in accordance with the procedure or
process by which a Dispute must be resolved (except as otherwise stated or
modified in this Option) as described in the Dispute Resolution Appendix (as
defined in the Option Issuance Agreement). Nevertheless, if any Person (as
defined in the Agreement of Purchase and Sale) other than the parties and their
affiliates:
(i) Has initiated a lawsuit or other judicial,
administrative, or arbitration proceedings against or involving either or both
of the parties in which a Dispute will be resolved, or
(ii) Is a necessary participant in any judicial,
administrative, or arbitration proceedings to resolve a Dispute and cannot be
joined by either or both of the parties in an arbitration of that Dispute under
Section B.3 of the Dispute Resolution Appendix,
so that (in either case) the Dispute Resolution Procedure is or will be
ineffective, then the parties need not use or follow the Dispute Resolution
Procedure to resolve that Dispute, although the submission to jurisdiction in
Section B.5 of the Dispute Resolution Exhibit shall apply if necessary.
(b) The parties shall freely share, and may disclose to any
mediator or arbitrator as part of any Dispute resolution proceeding, any and
all reasonably requested relevant information needed to facilitate the
resolution of any Dispute and any and all information likely to lead to such
relevant information.
(c) In the event of a Dispute, the parties shall continue to
perform their respective obligations pursuant to this Agreement.
(d) Nothing in this Section 6.07 or the Dispute Resolution
Procedure prevents the parties from resolving any Dispute by mutual agreement
at any time.
Section 6.08: Severability. Whenever possible, each provision of
this Option shall be interpreted in such manner as to be effective and valid,
but if any provision of this Option is held to be invalid or unenforceable in
any respect, such invalidity or
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unenforceability shall not render invalid or unenforceable any other provision
of this Option.
IN WITNESS WHEREOF, this Option has been duly, executed by the
Corporation under its corporate seal as of the 2nd day of January, 1998.
THE SABRE GROUP HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President and Chief
Financial Officer
Attest: Xxxxx X. Xxxxxxxx
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Assistant Secretary
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Exhibit A
Officer's Certificate
[Date]
The undersigned certifies that he is the duly elected, qualified and
acting ________________ of US Airways, Inc., a Delaware corporation (the
"Optionee") and as such, he is familiar with matters certified herein and is
authorized to execute this Certificate on behalf of the Optionee and, with
reference to Section 2.02(a) of that Option, No. _________, to purchase
3,000,000 shares of Class A Common Stock, par value $.01 per share, of The
SABRE Group Holdings, Inc. (capitalized terms used herein and not otherwise
defined herein have the respective meanings specified in such option) and that
Exercise Notice attached as Exhibit 1 hereto, he further certifies as follows:
1. Neither the exercise of the Option requested pursuant to the
Exercise Notice nor the receipt by the Optionee or its designee of Option
Shares upon such exercise does, as of the date hereof, or will, as of the
Option Closing Date, conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time,
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any encumbrance of any kind
or character upon any of Optionee's properties or assets under, any contract,
agreement, indenture, mortgage, guaranty, lease, license or understanding,
written or oral to which it is a party.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of the date first written above.
By:
------------------------------------
Name:
Title:
I, ________________, Secretary of US Airways, Inc., do hereby certify
that _____________ is duly elected and qualified as ______________ of US
Airways, Inc. as of the date hereof, and that the signature set forth above is
such officer's signature.
By:
------------------------------------
Name:
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