OPTIONEE AGREEMENT
OPTIONEE AGREEMENT, dated as of April 16, 2003 (this "Agreement"),
among Crane Co., a Delaware corporation ("Parent"), STC Merger Co., a Delaware
corporation and an indirect wholly owned subsidiary of Parent ("Purchaser"), the
undersigned optionee, whose name is set forth on the signature page of this
Agreement ("Optionee"), of Signal Technology Corporation, a Delaware corporation
(the "Company"), and the Company.
WHEREAS, in order to induce Parent and Purchaser to enter into the
Agreement and Plan of Merger dated as of the date hereof with the Company (the
"Merger Agreement"), Parent and Purchaser have requested Optionee, and Optionee
has agreed, to enter into this Agreement;
WHEREAS, Optionee, Parent, Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
this Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, for valuable consideration and in consideration of the
foregoing and the mutual covenants and agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, Parent, Purchaser, the Company and Optionee hereby agree as
follows:
ARTICLE I
CONVERSION OF OPTIONS TO RIGHT TO RECEIVE CASH
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SECTION 1.01 Conversion of Options with an Exercise Price of Less
than $13.25 Per Share. Optionee hereby irrevocably acknowledges and agrees that
notwithstanding the terms of any Company Options granted to Optionee or the
provisions of any Company Stock Option Plan, pursuant to the Merger Agreement,
immediately prior to the Effective Time, all then unexercised outstanding
options, which have an exercise price less than $13.25 per share, held by
Optionee to purchase common stock of the Company, whether or not exercisable,
whether or not vested, under the Company's 1992 Equity Incentive Stock Option
Plan and 2001 Equity Incentive Plan, shall be automatically converted into the
right to receive only an amount of cash (net of applicable withholding Taxes)
equal to (x) the difference, if any, between the Per Share Amount ($13.25) less
the exercise price per share of Common Stock payable upon exercise of such
Company Options multiplied by (y) the number of shares of Common Stock issuable
thereunder upon exercise immediately prior to the Effective Time. Optionee
hereby waives any rights that Optionee has in respect of the terms of any
Company Options granted to him/her or under any Company Stock Option Plan to the
extent any such terms are inconsistent with the provisions of this Agreement.
SECTION 1.02 Termination of Options with an Exercise Price Equal to
or Greater than $13.25 Per Share. Optionee hereby irrevocably acknowledges and
agrees that
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notwithstanding the terms of any Company Options granted to Optionee or the
provisions of any Company Stock Option Plan, immediately prior to the Effective
Time, all then unexercised outstanding options, which have an exercise price of
or greater than $13.25 per share, held by Optionee under the Company's Stock
Option shall immediately and automatically, without further action of the
Optionee or the Company, terminate and be of no further force and effect.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF OPTIONEE
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Optionee represents and warrants to Parent, Purchaser and the Company
as follows:
SECTION 2.01 Valid Title. Optionee is the sole owner of the Options
set forth on Annex I hereto with no encumbrances against, and no restrictions on
rights of disposition pertaining thereto, except for any applicable restrictions
on transfer under the Securities Act.
SECTION 2.02 Authority; Non-Contravention. Optionee has the
requisite power and authority or legal capacity to enter into this Agreement and
to consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Optionee and the consummation by Optionee of the
transactions contemplated by this Agreement have been duly authorized by all
necessary action (including any consultation, approval or other action by or
with any other person) on the part of Optionee. This Agreement has been duly
executed and delivered by Optionee and (assuming the due authorization,
execution and delivery by Parent, Purchaser and Company of this Agreement)
constitutes a valid and binding obligation of Optionee, enforceable against
Optionee in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws
relating to creditors' rights and to general principles of equity. The execution
and delivery of this Agreement by Optionee does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement by Optionee will not, require consent under, conflict with or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under, or
result in the creation of any lien upon any of Optionee's properties or assets
under, any provision of applicable Law or of any agreement, judgment,
injunction, order, decree or other instrument binding on Optionee. Except for
filings required under Section 16 of the Exchange Act, no consent, approval,
order or authorization of, or registration, declaration or filing with or
exemption by any Governmental Authority is required by or with respect to
Optionee in connection with Optionee's execution and delivery of this Agreement
or the consummation by Optionee of the transactions contemplated by this
Agreement
SECTION 2.03 Options; Total Shares. As of the date hereof, the
options to purchase Company common stock set forth on Annex I are the only
options held by Optionee on the date of this Agreement. Other than the options
set forth on Annex I, Optionee does not own any options to purchase or rights to
subscribe for or otherwise acquire any securities of the Company.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
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PARENT, PURCHASER AND COMPANY
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Parent, Purchaser the Company each represents and warrant only with
respect to itself to Optionee as follows:
SECTION 3.01 Corporate Power and Authority. Each has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of each. This Agreement has been duly executed and delivered by each and
constitutes a valid and binding obligation of each, respectively, enforceable
against each of them in accordance with its terms, subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and
similar laws relating to creditors' rights and to general principles of equity.
SECTION 3.02 Conflicts. The execution and delivery of this Agreement
by Parent, Purchaser and the Company does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement by them will not, require consent under, conflict with or
result in any violation of, or default (with or without notice of lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under any of
any of their organizational documents, any provision of applicable Law or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
any of them. No consent, approval, order or authorization of, or registration,
declaration or filing with or exemption by any Governmental Authority is
required by or with respect to Parent, Purchaser or the Company in connection
with their respective execution and delivery of this Agreement or the
consummation by any of them of the transactions contemplated by this Agreement,
except for applicable requirements, if any, under the Exchange Act and the rules
and regulations thereunder and state securities or Blue Sky Laws.
ARTICLE IV
COVENANTS OF STOCKHOLDER
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SECTION 4.01 Covenants of Optionee. Optionee covenants and agrees
with and for the benefit of Parent, Purchaser and the Company as follows:
(a) Except as expressly contemplated by the terms of this Agreement,
Optionee shall not:
(i) until the Expiration Date (as defined herein), sell,
transfer, pledge, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to
the sale, transfer, pledge, assignment or other disposition
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of, the Options to any person, other than Purchaser or Purchaser's
designee. Any attempted transfer or other disposition in violation of
this Section 4.01(a)(i) shall be null and void; or
(ii) until the Expiration Date, take any other action that
would in any way restrict, limit or interfere with the performance of
Optionee's obligations hereunder or the transactions contemplated to be
performed by Optionee hereunder.
SECTION 4.02 Further Assurances. Optionee shall, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents, and other instruments as
may be necessary for the purpose of effectively carrying out the transactions
contemplated by this. Additionally, Optionee shall make any filings with
Governmental Authorities required in connection with the transactions
contemplated by this Agreement, including any Form 4 or any amendments to any
Form 4 previously filed under the Exchange Act.
ARTICLE V
MISCELLANEOUS
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SECTION 5.01 Representations. The representations and warranties
made in this Agreement are made as of the date hereof and shall survive the
execution hereof for a period terminating on the Expiration Date.
SECTION 5.02 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
facsimile, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 5.02):
if to Parent or Purchaser:
Corporate Secretary
Crane Co.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
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Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
if to the Company:
Chairman and Chief Executive Officer
Signal Technology Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxxx, Esq.
Fish & Xxxxxxxxxx P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
if to Optionee, to the address set forth on the Company's employment
records for the Optionee, or such other address as shall be furnished
in writing by Optionee to the other parties hereto.
with a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxxx, Esq.
Fish & Xxxxxxxxxx P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
SECTION 5.03 Expenses. All costs and expenses incurred by any party
in connection with this Agreement shall be paid by the party incurring such cost
or expense.
SECTION 5.04 Entire Agreement; No Third Party Beneficiaries. This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 5.05 Validity. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provisions hereof, which will remain in full force and effect. Upon
any determination by a court of competent jurisdiction that any term or other
provision is invalid or incapable of being enforced, the parties shall
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negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in order that the transactions
contemplated by this Agreement may be consummated as originally contemplated to
the fullest extent possible.
SECTION 5.06 Amendments. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 5.07 [Intentionally Omitted]
SECTION 5.8 Specific Performance. The parties hereto agree that if
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties will be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
SECTION 5.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any state or federal court sitting in the City of
Wilmington.
SECTION 5.10 Interpretation. When a reference is made in this
Agreement to a Section, such reference will be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they will be deemed to be followed by
the words "without limitation". References to the "Company" include the
Subsidiaries of the Company unless the context clearly requires otherwise. The
phrases "the date of this Agreement," "the date hereof" and terms of similar
import, unless the context otherwise requires, will be deemed to refer to April
16, 2003. As used in this Agreement, the term "affiliate" shall have the meaning
set forth in Rule 12b-2 of the Exchange Act; provided, that in no event will
Parent or Purchaser, on the one hand, or Optionee, on the other, be considered
an affiliate of the other such party(ies).
SECTION 5.11 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 5.12 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 5.14 Termination. This Agreement shall automatically
terminate on the Expiration Date. The term "Expiration Date" means the earliest
of (x) the Effective Time, (y) the date, if any, on which the parties hereto
shall, by mutual written consent, agree to terminate
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this Agreement or (z) the due termination of the Merger Agreement in accordance
with its express terms.
IN WITNESS WHEREOF, Parent, Purchaser, the Company and Optionee have caused this
Agreement to be executed as of the date first written above.
CRANE CO.
By:
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PURCHASER
By:
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SIGNAL TECHNOLOGY CORPORATION
By:
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[OPTIONEE'S NAME]
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ANNEX I
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NUMBER OF SHARES PER SHARE OPTION
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DATE OF GRANT OF OPTION SUBJECT TO OPTION EXERCISE PRICE
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