AGREEMENT
Exhibit 99.1
This Agreement, dated as of March 12, 2008 (the “Agreement”), is by and among Strategic
Diagnostics Inc., a Delaware corporation (“Company”), and Xxxxxx X. Xxxxxx, an individual resident
of Texas (“Xxxxxx”), BC Advisors, LLC, a Texas limited liability company (“BCA”), SRB Management,
L.P., a Texas limited partnership (“SRB”) and Xxxxxxx van den Broek, an individual resident of
Connecticut (“van den Broek”). Xxxxxx, BCA and SRB are collectively referred to as the “Xxxxxx
Group.”
WHEREAS, each of Xxxxxx and van den Broek has submitted a letter, dated March 12, 2008,
consenting to serve as a director of the Company; and
WHEREAS, the Company and the Xxxxxx Group have determined that the interests of the Company
and its stockholders would be best served by avoiding the substantial expense, disruption and
adverse publicity of a dispute regarding the composition of the Company’s Board of Directors.
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations,
warranties, covenants, agreements and conditions hereinafter set forth, and, intending to be
legally bound hereby, the parties hereby agree as follows:
1. Representations and Warranties of the Company. The Company represents and warrants
as follows:
(a) The Company has the corporate power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the Company, and is
enforceable against the Company in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting the rights of creditors and subject to general equity principles.
(c) The execution, delivery and performance of this Agreement by the Company does not and will
not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to
it, or (ii) result in any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could become a default) under or pursuant to, or result in the loss
of a material benefit under, or give any right of termination, amendment, acceleration or
cancellation of, any organizational document, agreement, contract, commitment, understanding or
arrangement to which the Company is a party or by which it is bound.
2. Representations and Warranties of the Xxxxxx Group. Each member of the Xxxxxx
Group and van den Broek severally, and not jointly, represents and warrants with respect to himself
or itself as follows:
(a) If such member of the Xxxxxx Group is an individual, he has the power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby. If such member of the Xxxxxx Group is an entity, it has the
limited liability partnership or limited liability company power and authority, as applicable, to
execute, deliver and carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed, and delivered by such
member of the Xxxxxx Group, constitutes a valid and binding obligation and agreement of such
member, and is enforceable against such member in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the rights of creditors and subject to general equity
principles.
(c) Each member of the Xxxxxx Group represents and warrants that it is the “beneficial owner”
of such number of shares of Common Stock as are set forth on the cover page relating to such member
in the Schedule 13D filed by certain members of the Xxxxxx Group with the Securities and Exchange
Commission (the “SEC”) on February 15, 2008 and amended on March 4, 2008 (as so amended, the
“Schedule 13D”). Except for those Affiliates and Associates of such member with respect to whom a
cover page is included in the Schedule 13D, no other Affiliate or Associate of such member
beneficially owns any shares of Common Stock. Van den Broek represents and warrants that he is the
beneficial owner of 200,000 shares of Common Stock. Van den Broek and the Xxxxxx Group each
disclaim beneficial ownership of the common stock owned or controlled by the other, and assert that
their entry into this Agreement is a separate agreement of each of them with the Company.
(d) The execution, delivery and performance of this Agreement by Van den Broek and each member
of the Xxxxxx Group does not and will not (i) violate or conflict with any law, rule, regulation,
order, judgment or decree applicable to him or it, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both could become a
default) under or pursuant to, or result in the loss of a material benefit under, or give any right
of termination, amendment, acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which he or it is a party or by which he or
it is bound.
3. Definitions. For purposes of this Agreement:
(a) The terms “Affiliate” and “Associate” have the respective meanings set forth in Rule 12b-2
promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
the terms “beneficial owner” and “beneficial ownership” shall have the respective meanings as set
forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and the terms “person” or
“persons” shall mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature.
(b) “Board” means the Board of Directors of the Company.
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(c) “Common Stock” means the Common Stock of the Company, $0.01 par value.
(d) The “Standstill Period” means (A) as to the Xxxxxx Group, the period from the date of this
Agreement until the earlier of (i) the date that is three (3) months after the date on which Xxxxxx
ceases to be a member of the Board and (ii) such date, if any, as the Company has materially
breached any of its commitments or obligations set forth in Sections 4(a) and 4(b) of this
Agreement and (B) as to van den Broek, the period from the date of this Agreement until the earlier
of (i) the date that is three (3) months after the date on which van den Broek ceases to be a
member of the Board and (ii) such date, if any, as the Company has materially breached any of its
commitments or obligations set forth in Sections 4(a) and 4(b) of this Agreement.
4. Election of Xxxxxx and van den Broek; Related Matters.
(a) Within five business days following the execution and delivery of this Agreement by the
parties hereto:
(i) | In accordance with the Company’s bylaws, the Board of Directors shall adopt a resolution immediately increasing the size of the Board by one (1) director, to a total of nine (9) directors; and | ||
(ii) | In accordance with the Company’s bylaws, the Board shall elect Xxxxxx and van den Broek as directors of the Company, to serve in Class I and Class II of the Board, respectively. |
(b) The Board shall nominate the current members of Class II of the Board (including van den
Broek) for election as Class II directors at the 2008 Annual Meeting of Stockholders, and shall
nominate Xxxxxx for election as a Class I director at the 2009 Annual Meeting of Stockholders.
(c) The members of the Xxxxxx Group who filed the Schedule 13D will promptly file an amendment
to the Schedule 13D reporting the entry into this agreement, amending applicable items to conform
to its obligations hereunder and appending or incorporating by reference this agreement as an
exhibit thereto. Such members of the Xxxxxx Group shall provide to the Company a reasonable
opportunity to review and comment on such amendment in advance of filing, and shall consider in
good faith the reasonable comments of the Company.
(d) Van den Broek and the members of the Xxxxxx Group shall cause all shares of Common Stock
beneficially owned by them and their Affiliates to be present for quorum purposes and to be voted,
and shall use their commercially reasonable efforts to cause all shares of Common Stock held by
their respective Associates to be present for quorum purposes and to be voted, in favor of all
directors nominated by the Board for election at the Company’s 2008 Annual Meeting of Stockholders.
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5. Standstill.
Each member of the Xxxxxx Group and Van den Broek agrees that, during the Standstill Period,
he or it will not, and he or it will cause each of such member’s Affiliates or agents or other
persons acting on his or its behalf not to, and will use commercially reasonable efforts to cause
his or its respective Associates not to:
(a) submit any stockholder proposal (pursuant to Rule 14a-8 promulgated by the SEC under the
Exchange Act or otherwise) or any notice of nomination or other business for consideration, and
will not nominate any candidate for election to the Board or oppose the directors nominated by the
Board.
(b) form, join in or in any other way participate in a “partnership, limited partnership,
syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect
to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement
or subject any shares of Common Stock to any voting agreement or pooling arrangement, other than
solely with other members of the Xxxxxx Group or one or more Affiliates of a member of the Xxxxxx
Group with respect to the Common Stock currently owned as set forth in Section 2(c) of this
Agreement or to the extent such a group may be deemed to result with the Company or any of its
Affiliates as a result of this Agreement;
(c) solicit proxies or written consents of stockholders, or otherwise conduct any nonbinding
referendum with respect to Common Stock, or make, or in any way participate in, any “solicitation”
of any “proxy” within the meaning of Rule 14a-1 promulgated by the SEC under the Exchange Act to
vote, or advise, encourage or influence any person with respect to voting, any shares of Common
Stock with respect to any matter, or become a “participant” in any contested “solicitation” for the
election of directors with respect to the Company (as such terms are defined or used under the
Exchange Act), other than a “solicitation” or acting as a “participant” in support of all of the
nominees of the Board (including van den Broek) at the 2008 Annual Meeting of Stockholders and each
subsequent annual meeting of stockholders with respect to which the Board has nominated Xxxxxx or
van den Broek;
(d) seek, in any capacity other than as a member of the Board, to call, or to request the call
of, a special meeting of the stockholders of the Company, or seek to make, or make, a stockholder
proposal at any meeting of the stockholders of the Company or make a request for a list of the
Company’s stockholders (or otherwise induce or encourage any other person to initiate such proposal
or request) or otherwise acting alone, or in concert with others, seek to control or influence the
governance or policies of the Company;
(e) effect or seek to effect, in any capacity other than as a member of the Board (including,
without limitation, by entering into any discussions, negotiations, agreements or understandings
with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, or in any way assist or facilitate any other person to effect or seek, offer or
propose (whether publicly or otherwise) to effect or participate in (i) any acquisition of any
securities (or beneficial ownership thereof), or rights or options to acquire any securities (or
beneficial ownership thereof), or any material assets or businesses, of the Company or any of its
subsidiaries, (ii) any tender offer or exchange offer, merger, acquisition or
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other business combination involving the Company or any of its subsidiaries, or (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with
respect to the Company or any of its subsidiaries;
(f) publicly disclose, or cause or facilitate the public disclosure (including without
limitation the filing of any document or report with the SEC or any other governmental agency or
any disclosure to any journalist, member of the media or securities analyst) of any intent,
purpose, plan or proposal to obtain any waiver, or consent under, or any amendment of, any of the
provisions of Section 4(d) or this Section 5, or otherwise seek (in any manner that would require
public disclosure by any of the members of the Xxxxxx Group or their Affiliates or Associates) to
obtain any waiver, consent under, or any amendment of, any provision of this Agreement;
(g) enter into any arrangements, understandings or agreements (whether written or oral) with,
or advise, finance, assist or encourage, any other person that engages, or offers or proposes to
engage, in any of the foregoing; or
(h) take or cause or induce others to take any action inconsistent with any of the foregoing.
It is understood and agreed that this Agreement shall not be deemed to prohibit Xxxxxx or van
den Broek from engaging in any lawful act in his capacity as a director of the Company. It is
understood and agreed that the Xxxxxx Group shall not be responsible for any breach by van den
Broek, and that van den Broek shall not be responsible for any breach by the Xxxxxx Group, of any
term of this Agreement.
6. Confidentiality. The Company anticipates that, in connection with Xxxxxx’x and van
den Broek’s service as directors of the Company, Xxxxxx and van den Broek will be provided
Confidential Information (as defined below). Each of Xxxxxx and van den Broek acknowledges the
confidential and proprietary nature of the Confidential Information and agrees that until two (2)
years after the end of his tenure as a director of the Company, the Confidential Information (a)
will be kept confidential by Xxxxxx or van den Broek, as the case may be, and (b) will not be
disclosed by Xxxxxx or van den Broek, as the case may be, to any person, including any other member
of the Xxxxxx Group, except with the specific prior written consent of the Company or except as
expressly otherwise permitted by this Agreement or as required by law, including a validly issued
subpoena. It is understood that (i) Xxxxxx and van den Broek may disclose Confidential Information
only to counsel for Xxxxxx or van den Broek, as the case may be (“Counsel”), as necessary to enable
Counsel to advise Xxxxxx or van den Broek, as the case may be, with respect to his conduct as a
director of the Company, provided that Counsel shall be informed by Xxxxxx or van den Broek, as the
case may be, of the confidential nature of the Confidential Information and of the obligations of
Xxxxxx or van den Broek, as the case may be, under this Agreement and (ii) Xxxxxx or van den Broek,
as the case may be, shall be responsible for the breach of the provisions of this Section 6 by his
Counsel. As used in this Agreement, the term “Confidential Information” means and includes any and
all of the information concerning the business and affairs of the Company that may hereafter be
disclosed to Xxxxxx or van den Broek by the Company or by the directors, officers, employees,
agents, consultants, advisors or other representatives, including legal counsel, accountants and
financial advisors
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(“Representatives”) of the Company; provided that “Confidential Information” shall not include
information that (a) was in the public domain or was or becomes generally available to the public
other than as a result of disclosure by Xxxxxx or van den Broek or Counsel, (b) was independently
acquired by Xxxxxx or van den Broek, as the case may be, or Counsel without violating any of the
obligations of Xxxxxx or van den Broek or Counsel under this Agreement, or under any other
contractual, legal, fiduciary or binding obligation of Xxxxxx or van den Broek or Counsel with or
to the Company, (c) was available, or becomes available, to Xxxxxx or van den Broek or Counsel on a
nonconfidential basis other than as a result of its disclosure to Xxxxxx or van den Broek, as the
case may be, by the Company or any Representative of the Company, but only if the source of such
information is not bound by a confidentiality agreement with the Company or is not otherwise
prohibited from transmitting the information to Xxxxxx or van den Broek or Counsel by a
contractual, legal, fiduciary or other binding obligation with or to the Company, or (d) was
independently developed by Xxxxxx or van den Broek or Counsel. The members of the Xxxxxx Group
acknowledge that they, as well as their Representatives, are aware that the United States
securities law prohibit any person who has material non-public information about a company from
purchasing or selling such securities of such company, or from communicating such information to
any other person under circumstances in which it is reasonably foreseeable that such person is
likely to purchase or sell such securities.
7. Questionnaires. Each of Xxxxxx and van den Broek shall, as promptly as reasonably
practicable after being provided with the standard forms of questionnaires used by the Company in
connection with its preparation of the proxy statement, provide responses to such questionnaires.
8. Compensation. Each of Xxxxxx and van den Broek shall be compensated for his
service as a director and shall be reimbursed for his expenses on the same basis as all other
non-employee directors of the Company are compensated and shall be eligible to be granted stock
options (or other stock-based compensation) on the same basis as all other non-employee directors
of the Company; provided, that (i) in lieu of any stock option, the Company may grant to Xxxxxx a
stock appreciation right (“SAR”) that is settled only in cash, with the base price of the SAR to be
equivalent to the exercise price that would otherwise have been applicable if a stock option were
granted, and that otherwise has terms as similar as reasonably practicable to terms that would have
applied if an option were granted and (ii) if the Company provides other stock-based compensation
to its non-employee directors, the Company may provide to Xxxxxx, in lieu thereof, phantom stock or
other stock units that are settled only in cash and that otherwise have terms as similar as
reasonably practicable to terms applicable to such stock-based compensation. Xxxxxx agrees that he
will not transfer any stock options, SARs or other stock-based awards provided to him, except as
may otherwise be permissible under the Company’s Equity Compensation Plan.
9. Indemnification and Insurance. Xxxxxx and van den Broek shall be entitled to the
same rights of indemnification as the other directors. The Company shall, promptly after their
election, take such action, if any, as may be necessary to add Xxxxxx and van den Broek to the
Company’s directors and officers’ liability insurance policy as an Insured Person.
10. Specific Performance. Each party hereto acknowledges and agrees, on behalf of
itself and its Affiliates, that irreparable harm would occur in the event any of the provisions of
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this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties will be entitled to specific relief hereunder,
including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions hereof in any
state or federal court in the State of Delaware, in addition to any other remedy to which they may
be entitled at law or in equity. Any requirements for the securing or posting of any bond with
such remedy are hereby waived.
11. Jurisdiction. Each party hereto agrees, on behalf of itself and its Affiliates,
that any actions, suits or proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby will be brought solely and exclusively in any state or federal
court in the State of Delaware (and the parties agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further agrees that service of any process,
summons, notice or document by U.S. registered mail to the respective addresses set forth in
Section 16 will be effective service of process for any such action, suit or proceeding brought
against any party in any such court. Each party, on behalf of itself and its Affiliates,
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions contemplated hereby, in the state or
federal courts in the State of Delaware, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or proceeding brought
in any such court has been brought in an improper or inconvenient forum.
12. Applicable Law. This agreement shall be governed in all respects, including
validity, interpretation and effect, by the laws of the State of Delaware applicable to contracts
executed and to be performed wholly within such state, without giving effect to the choice of law
principles of such state.
13. Counterparts. This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement.
14. Entire Agreement; Amendment and Waiver; Successors and Assigns. This Agreement
contains the entire understanding of the parties hereto with respect to, and supersedes all prior
agreements relating to, its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the parties other than those
expressly set forth herein. This Agreement may be amended only by a written instrument duly
executed by the parties hereto or their respective successors or assigns. No failure on the part
of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties hereto and their respective successors, heirs,
executors, legal representatives, and assigns.
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15. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall be in writing and
shall be deemed validly given, made or served, if (a) given by telecopy, when such telecopy is
transmitted to the telecopy number set forth below, or to such other telecopy number as is provided
by a party to this Agreement to the other party pursuant to notice given in accordance with the
provisions of this Section 16, and the appropriate confirmation is received or (b) if given by any
other means, when actually received during normal business hours at the address specified in this
Section 16, or at such other address as is provided by a party to this Agreement to the other party
pursuant to notice given in accordance with the provisions of this Section 16:
if to the Company:
Strategic Diagnostics Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Chief Executive Officer
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Chairman
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Chairman
if to the Xxxxxx Group or any member thereof:
Xxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx XX 00000
Facsimile: 000-000-0000
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx XX 00000
Facsimile: 000-000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx
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if to van den Broek:
Xxxxxxx van den Broek
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
16. No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer on
any person other than the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
signatories of the parties as of the date hereof.
STRATEGIC DIAGNOSTICS INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||
Xxxxxxx X. Xxxxxx | ||||
President and Chief Executive Officer | ||||
BC ADVISORS, LLC |
||||
By: | /s/ Xxxxxx X. Xxxxxx | |||
Xxxxxx X. Xxxxxx, Member | ||||
SRB MANAGEMENT, L.P. |
||||
By: | BC Advisors, LLC, its general partner |
By: | /s/ Xxxxxx X. Xxxxxx | |||
Xxxxxx X. Xxxxxx, Member |
/s/ Xxxxxx X. Xxxxxx | ||||
XXXXXX X. XXXXXX | ||||
/s/ Xxxxxxx van den Xxxxx
|
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