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Exhibit 3
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Agreement"), dated as of October 11, 2000 by
and among Kulicke and Xxxxx Industries, Inc., a Pennsylvania corporation
("Acquiror"), and Cerprobe Corporation, a Delaware corporation (the "Company").
WHEREAS, concurrently with the execution and delivery of this Agreement,
Acquiror, the Company and Cardinal Merger Sub., Inc. ("Merger Sub") are entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, upon the terms and subject to
the conditions thereof, for the acquisition of the Company by Acquiror; and
WHEREAS, as a condition to Acquiror's willingness to enter into the Merger
Agreement, Acquiror has requested that the Company agree, and the Company has so
agreed, to grant to Acquiror an option with respect to certain shares of the
Company's common stock, on the terms and subject to the conditions set forth
herein. Capitalized terms used and not defined herein shall have the meanings
assigned to them in the Merger Agreement.
NOW, THEREFORE, to induce Acquiror to enter into the Merger Agreement, and
in consideration of the mutual covenants and agreements set forth herein and in
the Merger Agreement, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants Acquiror an irrevocable
option (the "Company Option") to purchase from the Company upon original issue
from time to time up to a number of shares of common stock, par value $.05 per
share ("Company Common Stock"), of the Company equal to 19.9% of the number of
shares of Company Common Stock outstanding on the date of this Agreement,
subject to adjustment as provided in Section 8 (such shares being referred to
herein as the "Company Shares") in the manner set forth below at an initial
exercise price of $20 per Company Share (the "Exercise Price"). Notwithstanding
the foregoing, in no event shall the number of shares for which the Company
Option is exercisable exceed 19.9% of the number of issued and outstanding
Company Shares.
2. Exercise of Option. The Company Option may be exercised by Acquiror, in
whole or in part, immediately prior to, and subject to the consummation of, a
"Trigger Event." For purposes hereof, a "Trigger Event" shall occur if (A) the
Merger Agreement is terminated by Acquiror or Company under circumstances that
would entitle Acquiror to the Company Termination Fee under Section 9.5 of the
Merger Agreement, and (B) within 9 months after such termination the Company
consummates a Competing Transaction with or by any person or entity. Company
shall provide written notice to Acquiror at least three (3) business days prior
to the occurrence of any Trigger Event, so that Acquiror can determine whether
it wishes to exercise the Company Option. If Acquiror wishes to exercise the
Company Option, Acquiror shall deliver to the Company a written notice (an
"Exercise Notice") specifying the total number of Company Shares it wishes to
purchase. Each closing of a purchase of Company Shares (a
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"Closing") shall occur at a place, on a date and at a time designated by
Acquiror in an Exercise Notice delivered at least two business days prior to the
date of the Closing subject to the satisfaction of the conditions to closing set
forth in Section 3 hereof. The Company Option shall terminate upon the earlier
of: (i) the Effective Time; or (ii) the date that is nine months after
termination of the Merger Agreement pursuant to Section 9.1 thereof (or if, at
the expiration of such nine month period the Company Option cannot be exercised
by reason of any applicable judgment, decree, order, law or regulation, ten
business days after such impediment to exercise shall have been removed or shall
have become final and not subject to appeal). Upon the giving by Acquiror to the
Company of the Exercise Notice and the tender of the applicable aggregate
Exercise Price, Acquiror shall be, and shall be deemed to be, the holder of
record of the Company Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Company Shares shall not then be actually
delivered to Acquiror.
In addition to the rights of the Acquiror under the preceding provisions
of this Section, Acquiror shall have the right, immediately prior to, and
subject to the consummation of, a Trigger Event, in lieu of paying the Exercise
Price in cash, to instruct the Company to reduce the number of shares of Company
Common Stock thereafter eligible to be purchased by Acquiror pursuant to the
Company Option held by it in accordance with the following formula:
(P x E)
N = --------------
M
where:
N= the number of shares of Company Common Stock to be subtracted
from remaining number of Company Shares purchasable upon
exercise of Acquiror's Company Option; and
P= the aggregate number of shares then issuable upon exercise
of the Company Option
M= the Merger Price per share of Company Common Stock - For
purposes hereof, "Merger Price" per share of Company Common
Stock on any date means the highest consideration paid with
respect to a share of Company Common Stock in the Company
Transaction, provided that to the extent such consideration
includes equity securities of any other entity, the value of
such securities shall be the average of the closing prices per
share of such security as reported by the Nasdaq Stock Market,
or the primary national securities exchange on which such
security is then quoted for the 10 consecutive trading days
prior to the date of exercise; provided, however, that if
quotes for such security are not reported by the Nasdaq Stock
Market and such security is neither traded on the Nasdaq
National Market Stock, on a national securities exchange, on
the Nasdaq Small Cap
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Market nor on the OTC Electronic Bulletin Board, the price
referred to above shall be the last reported sales price
reflected in the over-the-counter market as reported by the
National Quotation Bureau, Inc. or any organization performing
a similar function.
E = the Exercise Price per share of Company Common Stock on the
date of such exercise.
3. Conditions to Closing. The obligation of the Company to issue the
Company Shares to Acquiror hereunder is subject to the conditions, which (other
than the conditions described in clauses (i), (iii) and (iv) below) may be
waived by the Company in its sole discretion, that (i) all waiting periods, if
any, under the HSR Act, applicable to the issuance of the Company Shares
hereunder shall have expired or have been terminated; (ii) all consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, any Governmental Entity, if any, required in connection with the
issuance of the Company Shares hereunder shall have been obtained or made, as
the case may be, it being understood that the Company shall not be required to
register the Company Shares under the Securities Act prior to their issuance to
Acquiror upon exercise of the Company Option; and (iv) no preliminary or
permanent injunction or other order by any court of competent jurisdiction
prohibiting or otherwise restraining such issuance shall be in effect.
4. Closing. At any Closing, (a) the Company will deliver to Acquiror or
its designee a single certificate in definitive form representing the number of
the Company Shares designated by Acquiror in its Exercise Notice, such
certificate to be registered in the name of Acquiror and to bear the legend set
forth in Section 9, and, if applicable, (b) Acquiror will deliver to the Company
the aggregate price for the Company Shares so designated and being purchased by
wire transfer of immediately available funds. The Company shall pay all
expenses, and any and all United States federal, state and local taxes and other
charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 4 in the name of Acquiror or
its designee.
5. Representations and Warranties of the Company. The Company represents
and warrants to Acquiror that (a) the Company has taken all necessary corporate
action to authorize and reserve for issuance and to permit it to issue, upon
exercise of the Company Option, and at all times from the date hereof through
the expiration of the Company Option will have reserved, a number of authorized
and unissued Company Shares equal to 19.9% of the number of Company Shares
issued and outstanding on the date hereof, such amount being subject to
adjustment as provided in Section 8, all of which, upon their issuance and
delivery in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable, (b) upon delivery of the Company Shares to
Acquiror upon the exercise of the Company Option, Acquiror will acquire the
Company Shares free and clear of all claims, liens, charges, encumbrances and
security interests of any nature whatsoever, and (c) none of the Company, any of
its affiliates or anyone acting on its or their behalf has issued, sold or
offered any security of the Company to any person under circumstances, or taken
any other action, that would cause the issuance and sale
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of the Option Shares, as contemplated by this Agreement, to be subject to the
registration requirements of the Securities Act as in effect on the date hereof
and, assuming the representations of Acquiror contained in Section 6 are true
and correct, the issuance, sale and delivery of the Option Shares hereunder upon
exercise of the Company Option will be exempt from the registration and
prospectus delivery requirements of the Securities Act, as in effect on the date
hereof.
6. Representations and Warranties of Acquiror. Acquiror represents and
warrants to the Company that: (i) any Company Shares acquired upon exercise of
the Company Option will be acquired for Acquiror's own account, and will not be,
and the Company Option is not being, acquired by Acquiror with a view to the
distribution thereof in violation of the Securities Act; and (ii) it is an
"accredited investor," as that term is defined in Regulation D promulgated under
the Securities Act.
7. Registration Rights. The Company will, if requested by Acquiror at any
time and from time to time (but no more than twice in total) after the exercise
of the Company Option, as expeditiously as possible prepare and file a
registration statement under the Securities Act if such registration is
necessary in order to permit the sale or other disposition of any or all shares
or securities that have been acquired by or are issuable to Acquiror upon
exercise of the Company Option, including a "shelf" registration statement under
Rule 415 under the Securities Act or any successor provision, and the Company
will use its reasonable efforts to qualify such shares or other securities under
any applicable state securities laws, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
when it is not otherwise qualified or required.
The Company will 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 Company 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 Company 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 Company or otherwise
interfere with or adversely affect any pending or proposed offering of
securities of the Company or any other material transaction involving the
Company.
Any registration statement prepared and filed under this Section 7, and
any sale covered thereby, will be at the Company's expense except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Acquiror's counsel related thereto. Acquiror will provide all
information reasonably requested by the Company for inclusion in any
registration statement to be filed hereunder.
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If, during the time periods referred to in the first sentence of this
Section 7, the Company effects a registration under the Securities Act of the
Company's Common Stock for its own account or for any other stockholders of the
Common Stock (other than on Form S-4 or Form S-8, or any successor form), it
will allow the Acquiror the right to participate in such registration, and such
participation will not affect the obligation of the Company to effect demand
registration statements for the Acquiror under this Section 7; provided that, if
the managing underwriters of such offering advise the Company in writing that in
their opinion the number of shares of Company Common Stock requested to be
included in such registration exceeds the number which can be sold in such
offering, then the amount of securities to be offered for the account of the
Acquiror may be reduced to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount recommended by such
managing underwriter; provided that notwithstanding any limit on the number of
registration statements the Company is obligated to file under Section 7 hereof,
the Company will, if requested by Acquiror, file a registration statement with
respect to those shares not included in such offering in a shelf registration
statement under Rule 415 under the Securities Act. In connection with any
registration pursuant to this Section 7, the Company and Acquiror will provide
each other and any underwriter of the offering with customary representations,
warranties, covenants, indemnification, and contribution in connection with such
registration.
8. Standstill. Acquiror hereby agrees that, in connection with any
registered underwritten offering of Company Common Stock, Acquiror shall not,
and shall not permit any of its subsidiaries to, sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale of, any Company
Common Stock (or other securities of the Company) held by Acquiror or any of its
subsidiaries (other than those shares of Company Common Stock, if any, included
in the registration) for a period specified by the representative of the
underwriters of Company Common Stock not to exceed one hundred eighty (180) days
following the effective date of the applicable registration statement of the
Company filed under the Securities Act; provided however that the Company's
officers, directors and stockholders required to file reports under Section 16
of the Exchange Act are so limited. The Acquiror agrees to, and agrees to cause
its subsidiaries to, execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriters of Company Common Stock
which are consistent with the foregoing or which are necessary to give further
effect thereto. In addition, if requested by the Company or the representative
of the underwriters of Company Common Stock, the Acquiror shall, and shall cause
each of its subsidiaries to, provide, within ten (10) days of such request, such
information as may be reasonably required by the Company or such representative
in connection with the completion of any public offering of the Company Common
Stock pursuant to a registration statement filed under the Securities Act. The
Company may impose stop-transfer instructions with respect to the shares of
Company Common Stock (or other securities of the Company) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
The Acquiror agrees that any transferee of any shares of Company Common Stock in
excess of 25% in aggregate of the total Company Shares subject to this Agreement
shall be bound by this paragraph.
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9. Adjustment Upon Changes in Capitalization. Without limiting any
restriction on the Company contained in this Agreement or in the Merger
Agreement, in the event of any change in Company Common Stock by reason of stock
dividends, splitups, mergers (other than the Merger), recapitalizations,
combinations, exchange of shares or the like, the type and number of shares or
securities subject to the Company Option, and the purchase price per share
provided in Section 1, shall be adjusted appropriately to restore to Acquiror
its rights hereunder, including the right to purchase from the Company (or its
successors) shares of Company Common Stock representing 19.9% of the outstanding
Company Common Stock for the aggregate Exercise Price calculated as of the date
of this Agreement as provided in Section 1.
10. Restrictive Legends. Each certificate representing shares of Company
Common Stock issued to Acquiror hereunder shall include a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
It is understood and agreed that the legend shall be removed in its entirety by
delivery of substitute certificate(s) without such legend if Acquiror shall have
delivered to the Company a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such legend is not required for
purposes of the Securities Act. In addition, such certificates shall bear any
other legend as may be required by law. Certificates representing shares sold in
a registered public offering pursuant to Section 7 shall not be required to bear
the legend set forth in this Section 10.
11. Binding Effect, No Assignment, No Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Except as expressly
provided for in this Agreement, neither this Agreement nor the rights or the
obligations of either party hereto are assignable, except by operation of law,
or with the written consent of the other party. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective permitted assigns any rights or remedies
of any nature whatsoever by reason of this Agreement. Any Company Shares sold by
a party in compliance with the provisions of Section 7 shall, upon consummation
of such sale, be free of the restrictions imposed with respect to such shares by
this Agreement, unless and until such party shall repurchase or otherwise become
the beneficial owner of such shares, and any transferee of such shares shall not
be entitled to the registration rights of such party.
12. Specific Performance. The parties hereby acknowledge and agree that
the failure of the Company to perform its agreement and covenants hereunder will
cause irreparable injury to Acquiror for which damages, even if available, will
not be an adequate remedy. Accordingly, the Company hereby consents to the
issuance of injunctive relief by any court of competent
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jurisdiction to compel performance of the Company's obligations and to the
granting by any such court of the remedy of specific performance of its
obligations hereunder.
13. Entire Agreement. This Agreement and the Merger Agreement (including
the exhibits and schedules thereto) constitute the entire agreement of the
parties, and supersedes all prior agreements and undertakings, both written and
oral, among the parties, with respect to the subject matter hereof.
14. Further Assurances. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
15. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect. If
any court or other competent authority holds any provisions of this Agreement to
be null, void or unenforceable, the parties hereto shall negotiate in good faith
the execution and delivery of an amendment to this Agreement in order, as nearly
as possible, to effectuate, to the extent permitted by law, the intent of the
parties hereto with respect to such provision and the economic effects thereof.
If for any reason any such court or regulatory determines that Acquiror is not
permitted to acquire the full number of shares of Company Common Stock provided
in Section 1 hereof (as the same may be adjusted), it is the express intention
of the Company to allow Acquiror to acquire such lesser number of shares as may
be permissible, without any amendment or modification hereof. Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith, or not take any action required
herein, the other party shall not be entitled to specific performance of such
provision or part hereof or to any other remedy, including without limitation
money damages, for breach hereof or of any other provision of this Agreement or
part hereof as the result of such holding or order.
16. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given in the manner provided in the Merger
Agreement.
17. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
18. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
19. Counterparts. This Agreement may be executed in multiple counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
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20. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
21. Amendments, Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of the parties hereto or, in the case of a waiver,
by an instrument signed on behalf of the party waiving compliance.
22. Extension of Time Periods. The time periods for exercise of certain
rights under Sections 2 shall be extended (i) to the extent necessary to obtain
all regulatory approvals for the exercise of such rights, and for the expiration
of all statutory waiting periods and (ii) to the extent necessary to avoid any
liability under Section 16(b) of the Exchange Act by reason of such exercise.
23. Replacement of Company Option. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, the Company will execute and deliver a new Agreement of
like tenor and date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
KULICKE AND XXXXX INDUSTRIES, INC.
By
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CERPROBE CORPORATION
By
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