PAGE 29
EXHIBIT 10.2
(Immediate Vesting - 125,000 Shares)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
No. warrant Right to Purchase Shares Shares of Common Stock of
META Group, Inc.
(subject to adjustment as provided herein)
META GROUP, INC.
COMMON STOCK PURCHASE WARRANT
October 20, 1998
META Group, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, Name, or its assigns, is entitled, subject
to the terms set forth below, to purchase from the Company from time to time
before 5:00 p.m., Stamford, Connecticut time, on October 20, 2002 (the
"Expiration Date"), up to Amount (Shares) fully paid and nonassessable shares of
Common Stock, par value $.01 per share, of the Company, at a purchase price of
$30.00 per share (such purchase price per share as adjusted from time to time as
herein provided is referred to herein as the "Purchase Price"). The number and
character of such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein.
This Warrant is one of the Common Stock Purchase Warrants
(collectively, the "Warrants") evidencing the right to purchase shares of Common
Stock of the Company issued pursuant to a certain Agreement and Plan of Merger
(the "Merger Agreement") dated as of the date hereof, among the Company, The
Sentry Group, Inc. and MG Acquisition Corporation, a copy of which is on file at
the principal office of the Company and the holder of this Warrant shall be
entitled to all of the benefits of the Agreement, as provided therein. Unless
otherwise defined herein, capitalized terms used in this Warrant that are
defined in the Merger Agreement shall have the meanings assigned to them in the
Merger Agreement.
As used herein, the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include META Group, Inc. and
any corporation which shall succeed or assume the obligations of META Group,
Inc. hereunder.
(b) The term "Common Stock" includes (i) the Company's Common
Stock, par value $.01 per share, as authorized on the date of the Agreement,
(ii) any other capital stock of any class or classes (however designated) of the
Company, authorized on or after such date, the holders of which shall have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and the
holders of which shall ordinarily, in the absence of contingencies, be entitled
to vote for the election of a majority of directors of the Company (even though
the right so to vote has been suspended by the happening of such a contingency)
and (iii) any other securities into which or for which any of the securities
described in (i) or (ii) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
30
(c) The term "Other Securities" refers to any stock (other
than Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holders of the Warrants at any time shall be
entitled to receive, or shall have received, on the exercise of the Warrants, in
lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or
Other Securities pursuant to Section 5 or otherwise.
1. Exercise of Warrant.
-------------------
1.1. Number of Shares Issuable upon Exercise. Subject to the
terms and conditions set forth in this Warrant, the holder hereof shall be
entitled to purchase through the Expiration Date set forth on the first page of
this Warrant, upon exercise of this Warrant in accordance with the terms of
subsections 1.2 or 1.3, or upon election of the net issue exercise option set
forth in subsection 1.4, up to the number of shares of Common Stock of the
Company set forth on the first page of this Warrant (as the same may be adjusted
pursuant to the terms hereof).
1.2. Full Exercise. This Warrant may be exercised in full by
the holder hereof by surrender of this Warrant, with the form of subscription at
the end hereof duly executed by such holder, to the Company at its principal
office, accompanied by payment, in cash or by certified or official bank check
payable to the order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then exercisable by
the Purchase Price then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part
by surrender of this Warrant in the manner and at the place provided in
subsection 1.2 except that the amount payable by the holder on such partial
exercise shall be the amount obtained by multiplying (a) the number of shares of
Common Stock designated by the holder in the subscription at the end hereof by
(b) the Purchase Price then in effect. On any such partial exercise the Company,
at its expense, will forthwith issue and deliver to, or upon the order of, the
holder hereof a new Warrant or Warrants of like tenor, in the name of the holder
hereof or as such holder (upon payment by such holder of any applicable
transfer, issuance or other tax) may request, calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock for which such
Warrant or Warrants may still be exercised.
1.4. Net Issue Exercise. In lieu of exercising this Warrant
pursuant to subsection 1.2 or 1.3, the holder may elect to receive shares of
Common Stock equal to the value of this Warrant (or of any portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election in which event the Company shall issue to
such holder a number of shares of the Company's Common Stock computed using the
following formula:
X = Y(A-B)/A
where X = the number of shares of Common Stock to be issued to the
holder
Y = the number of shares of Common Stock purchasable under this
Warrant (in accordance with Section 1.1)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = Warrant Purchase Price (as adjusted to the date of such
calculation).
For purposes of this subsection 1.4, fair market value of the Company's
Common Stock shall mean the average closing price of the Company's Common Stock
31
for the ten (10) trading days ending on and including the second-to-last trading
day prior to the date of determination of fair market value, calculated on the
basis of the last reported sales price of the Company's Common Stock on the
Nasdaq National Market, or, if not so quoted, as quoted in another
over-the-counter quotation system or exchange on which the Company's Common
Stock is then listed. If the Common Stock is not traded over-the-counter on
Nasdaq or on another quotation system or exchange, the fair market value shall
be the price per share which the Company could obtain from a willing buyer for
shares sold by the Company from authorized but unissued shares, as such price
shall be agreed by the Company and the holder hereof.
Any election pursuant to this Section 1.4 shall be deemed to be an
"exercise" hereunder for the purposes of this Warrant.
In the event of a dispute regarding this Warrant, the Company and the
holder hereof shall in good faith negotiate to settle such dispute. If no
resolution is reached within 30 days, either party may commence an arbitration
proceeding by submitting the dispute to arbitration. Any such arbitration shall
be before an arbitral tribunal composed of three arbitrators; one selected by
the Company, one selected by the holder hereof and one selected by mutual
agreement of the parties (the "Panel"). If the parties are unable to agree on
such third arbitrator, the arbitrator shall be selected by the American
Arbitration Association (the "AAA") in accordance with its Commercial
Arbitration Rules. The Panel will resolve the dispute in accordance with the
rules of the AAA. The venue for the arbitration shall be Stamford, Connecticut
or such other venue mutually agreed to by the Company and the holder hereof. The
Panel's award or order shall be final and binding on the Company and the holder
hereof and all costs of such proceeding shall be borne as specified in the award
or order.
1.5. Company Acknowledgment. The Company will, at the time of
the exercise of the Warrant, upon the request of the holder hereof acknowledge
in writing its continuing obligation to afford to such holder any rights to
which such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant and the Agreement. If the holder
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or
trust company shall have been appointed as trustee for the holders of the
Warrants pursuant to subsection 4.2, such bank or trust company shall have all
the powers and duties of a warrant agent appointed pursuant to Section 12 and
shall accept, in its own name for the account of the Company or such successor
person as may be entitled thereto, all amounts otherwise payable to the Company
or such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 5 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the holder hereof, or as such holder (upon payment by such
holder of any applicable transfer, issuance or other tax) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock (or Other Securities) to which such holder shall be
entitled on such exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction multiplied by
the then current fair market value of one full share (calculated in accordance
with the definition set forth in Section 1.4), together with any other stock or
other securities and property (including cash, where applicable) to which such
holder is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, all holders of
Common Stock as a class (or Other Securities) shall have received, or (on or
after the record date fixed for the determination of shareholders eligible to
receive) shall have become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
32
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company and excluding Contingent
Consideration and Book Earnout Payments, if any), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock split (adjustments in respect of which are provided
for in Section 5), then and in each such case the holder of this Warrant, on the
exercise hereof as provided in Section 1, shall be entitled to receive the
amount of stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this Section 3) which such holder
would hold on the date of such exercise if on the date hereof he had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and all such other
or additional stock and other securities and property (including cash in the
cases referred to in subdivisions (b) and (c) of this Section 3) receivable by
him as aforesaid during such period, giving effect to all adjustments called for
during such period by Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
----------------------------------------------------------
4.1. Reorganization, Consolidation, Merger, etc. In case at
any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such consummation or in connection with such dissolution, as the
case may be, if such holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in Sections 3
and 5.
4.2. Dissolution. In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution, shall at its expense deliver or
cause to be delivered the stock and other securities and property (including
cash, where applicable) receivable by the holders of the Warrants after the
effective date of such dissolution pursuant to this Section 4 to a bank or trust
company having its principal office in Stamford, Connecticut (or another
location in Connecticut chosen by the Company), as trustee for the holder or
holders of the Warrants.
4.3. Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 4, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may be, and shall
be binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant.
5. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (i) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock, or (iii) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
33
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Purchase Price which
would otherwise (but for the provisions of this subsection 5) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
6. Adjustments. In each case of any adjustment or readjustment in the
shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company will compute such adjustment or readjustment in accordance
with the terms of the Warrants and shall notify the holder hereof of such
adjustment or readjustment. On the written request of any holder of a Warrant,
the Company shall provide such holder with a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such issue or sale and as adjusted and readjusted
as provided in this Warrant.
7. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to each
holder of a Warrant a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, and (ii) the
date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 20 days prior to the date specified in such
notice on which any such action is to be taken.
8. Reservation of Stock, etc. Issuable on Exercise of Warrants. Except
as otherwise contemplated by the Agreement, the Company will at all times
reserve and keep available, solely for issuance and delivery on the exercise of
the Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrants.
9. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
34
holder of any applicable transfer, issuance or other tax) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered,
provided, however, that no Warrant issued in exchange for this Warrant shall be
exercisable for less than 50 shares of Common Stock.
10. Replacement of Warrants. On receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of any Warrant and, in the
case of any such loss, theft or destruction of any Warrant, on delivery of an
indemnity agreement or security satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
11. Warrant Agent. The Company may, by written notice to each holder of
a Warrant, appoint an agent having an office in Stamford, Connecticut (or
another location in Connecticut chosen by the Company) for the purpose of
issuing Common Stock (or Other Securities) on the exercise of the Warrants
pursuant to Section 1, exchanging Warrants pursuant to Section 9, and replacing
Warrants pursuant to Section 10, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
12. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
13. Negotiability, etc. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof consents
and agrees:
(a) title to this Warrant may not be transferred without
the prior written consent of the Company;
(b) if consent to transfer is granted pursuant to subsection
13(a), this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment at the end hereof) and delivery in the same
manner as in the case of a negotiable instrument transferable by endorsement and
delivery; and
(c) until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary.
(d) the holder hereof has no rights as a stockholder with
respect to this Warrant until such time as the holder hereof has exercised this
Warrant by delivery of the notice of exercise and has paid in full the Purchase
Price for the number of shares of Common Stock for which this Warrant is to be
so exercised.
14. Notices, etc. All notices and other communications under this
Warrant shall be in writing and shall, except as otherwise provided herein, be
deemed to have been duly given when (i) delivered by hand, (ii) sent by telex or
telecopier (with receipt confirmed), provided that a copy is mailed by certified
mail, return receipt requested, or (iii) when received by the addressee, if sent
by Express Mail, Federal Express or other express delivery service (receipt
requested), in each case, at the appropriate addresses, telex numbers and
telecopier numbers as may have been furnished to the Company in writing by such
holder or, until any such holder furnishes to the Company an address, telex
number or telecopier number, then to, and at the address, telex number or
telecopier number of, the last holder of this Warrant who has so furnished an
address to the Company.
15. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
35
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
[Remainder of Page Intentionally Left Blank]
36
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
META GROUP, INC.
By:_________________________
Name:
Title:
37
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO META GROUP, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise
the Warrant for, and to purchase thereunder, ................ shares of Common
Stock of META Group, Inc. and herewith makes payment of $..............therefor
and requests that the certificates for such shares be issued in the name of, and
delivered to .............., whose address is .............. ..................
Payment for such shares of Common Stock takes the form of (check applicable box
or boxes):
( ) $___________ in lawful money of the United States, and/or
( ) the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock
(using a Fair Market Value of $_______ per share for purposes
of this calculation), pursuant to Section 1.4 hereof.
Dated: .................................
(Signature must conform to name
of holder as specified on the
face of the Warrant)
.................................
(Address)
38
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto .................. the right represented by the within Warrant to purchase
................. shares of Common Stock of META Group, Inc. to which the within
Warrant relates, and appoints .......................... Attorney to transfer
such right on the books of META Group, Inc. with full power of substitution in
the premises.
Dated: ................................
(Signature must conform to name
of holder as specified on the
face of the Warrant)
...............................
(Address)
Signed in the presence of:
.............................
