Exhibit 6
STOCK OPTION AGREEMENT
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STOCK OPTION AGREEMENT, dated as of November 22, 1998 (the "Agreement"),
between GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), and Total Control Products, Inc., an Illinois corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent, Orion Merger Corp., a newly formed Illinois corporation and a wholly
owned subsidiary of Parent ("Sub"), and the Company are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides for the merger of Sub with and into the Company;
WHEREAS, as a condition to Parent's willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 1,598,530 authorized and unissued shares of Company Common Stock,
upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce Parent to enter into the Merger Agreement, the
Company has agreed to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments. The Company hereby grants to Parent
an irrevocable option (the "Option") to purchase from time to time up to
1,598,530 authorized and unissued Common Shares, no par value, of the Company
(the "Company Common Stock"), upon the terms and subject to the conditions set
forth herein (the "Optioned Shares"). Subject to the conditions set forth in
Section 2, the Option may be exercised by Parent in whole or from time to time
in part, at any time after the date hereof and prior to the termination of the
Option in accordance with Section 19. In the event Parent wishes to exercise
the Option, after the satisfaction of the conditions set forth in Section 2
Parent shall send a written notice to the Company (the "Stock Exercise Notice")
specifying the total number of Optioned Shares it wishes to purchase and a date
(not later than 10 business days and not earlier than two business days from the
date such notice is given) for the closing of such purchase (the "Closing
Date"). Parent may revoke an exercise of the Option at any time prior to the
Closing Date by written notice to the Company. In the event of any change in
the number of issued and outstanding shares of Company Common Stock by reason of
any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Optioned Shares subject to the Option and the Exercise Price (as hereinafter
defined) per Optioned Share shall be appropriately adjusted. In the event that
any additional shares of Company Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the preceding sentence
or pursuant to this Agreement), the number of
Optioned Shares subject to the Option shall be adjusted so that, after such
issuance, it equals (but does not exceed) 19.9% of the number of shares of
Company Common Stock then issued and outstanding and 19.9% of the voting power
of shares of capital stock of the Company then issued and outstanding, after
reduction, to the extent necessary to comply with the exception to the
shareholder approval requirements of the Nasdaq National Market ("NASDAQ"), for
any shares issued pursuant to the Option.
2. Conditions to Exercise of Option and Delivery of Optioned Shares. (a)
Parent's right to exercise the Option is subject to the following conditions:
(i) Neither Parent nor Sub shall have breached any of its material
obligations under the Merger Agreement;
(ii) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United
States invalidating the grant or prohibiting the exercise of the
Option shall be in effect; and
(iii) One or more of the following events shall have occurred on or
after the date hereof: (A) any person, corporation, partnership,
limited liability company or other entity or group (such person,
corporation, partnership, limited liability company or other entity or
group being referred to hereinafter, singularly or collectively, as a
"Person"), acquires or becomes the beneficial owner of 20% or more of
the outstanding shares of Company Common Stock (other than a person
who, as of the date hereof, is the beneficial owner of 20% or more of
the outstanding shares of Company Common Stock (a "20% Holder")); (B)
any 20% Holder increases his beneficial ownership of Company Common
Stock by more than 1%; (C) any group (other than a group which
includes or may reasonably be deemed to include Parent or any of its
affiliates) is formed which beneficially owns 20% or more of the
outstanding shares of Company Common Stock; (D) any Person (other than
Parent or its affiliates) shall have commenced a tender or exchange
offer for 20% or more of the then outstanding shares of Company Common
Stock or publicly proposed any bona fide merger, consolidation or
acquisition of all or substantially all the assets of the Company, or
other similar business combination involving the Company; (E) the
Company enters into, or announces that it proposes to enter into, an
agreement, including, without limitation, an agreement in principle,
providing for a merger or other business combination involving the
Company or a "significant subsidiary" (as defined in Rule 1.02(v) of
Regulation S-X as promulgated by the Securities and Exchange
Commission (the "SEC")) of the Company or the acquisition of a
substantial interest in, or a substantial portion of the assets,
business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement);
(F) any Person (other than Parent or its affiliates) is granted any
option or right, conditional or otherwise, to acquire or otherwise
become the beneficial owner of shares of Company Common Stock which,
together with all shares of Company Common Stock beneficially owned by
such Person, results or would result in such Person being the
beneficial owner of 20% or more of the outstanding shares of Company
Common Stock; or (G) there is a
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public announcement with respect to a plan or intention by the
Company, other than Parent or its affiliates, to effect any of the
foregoing transactions. For purposes of this subparagraph (iii), the
terms "group" and "beneficial owner" shall be defined by reference to
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder.
(b) Parent's obligation to purchase the Optioned Shares following the
exercise of the Option, and the Company's obligation to deliver the Optioned
Shares, are subject to the conditions that:
(i) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United
States prohibiting the delivery of the Optioned Shares shall be in
effect;
(ii) The purchase of the Optioned Shares will not violate Rule 10b-13
promulgated under the Exchange Act; and
(iii) All applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall
have expired or been terminated.
3. Exercise Price for Optioned Shares. At any Closing Date, the Company
will deliver to Parent a certificate or certificates representing the Optioned
Shares in the denominations designated by Parent in its Stock Exercise Notice
and Parent will purchase the Optioned Shares from the Company at a price per
Optioned Share equal to $11.00 (the "Exercise Price"), payable in cash. Payment
made by Parent to the Company pursuant to this Agreement shall be made by wire
transfer of federal funds to a bank designated by the Company or a check payable
in immediately available funds. After payment of the Exercise Price for the
Optioned Shares covered by the Stock Exercise Notice, the Option shall be deemed
exercised to the extent of the Optioned Shares specified in the Stock Exercise
Notice as of the date such Stock Exercise Notice is given to the Company.
4. Representations and Warranties of the Company. The Company represents
and warrants to Parent that (a) the execution and delivery of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company and this Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms; (b) the Company has taken all
necessary corporate action to authorize and reserve the Optioned Shares for
issuance upon exercise of the Option, and the Optioned Shares, when issued and
delivered by the Company to Parent upon exercise of the Option, will be duly
authorized, validly issued, fully paid and nonassessable and free of preemptive
rights; (c) except as otherwise required by the HSR Act, except for routine
filings and subject to Section 7, the execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated
hereby do not require the consent, approval or authorization of, or filing with,
any person or public authority and will not violate or conflict with the
Company's Amended and Restated Articles of
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Incorporation, as amended, or Amended and Restated Bylaws, or result in the
acceleration or termination of, or constitute a default under, any indenture,
license, approval, agreement, understanding or other instrument, or any statute,
rule, regulation, judgment, order or other restriction binding upon or
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets; (d) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois and has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby; and (e) the
Board of Directors of the Company has, to the extent such statutes are
applicable, taken all action so that prior to the execution hereof, the Board of
Directors has approved the Merger and the execution of this Agreement and the
consummation of the transaction contemplated hereby so that the higher vote
requirement for certain business combinations set forth in Section 7.85 of the
Business Corporation Law of the State of Illinois, as amended (the "IBCA"), and
the restrictions on certain business combinations set forth in Section 11.75 of
the IBCA will not apply with respect thereto or as a result thereof.
5. Representations and Warranties of Parent. Parent represents and
warrants to the Company that (a) the execution and delivery of this Agreement by
Parent and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
this Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding agreement of Parent; and (b) Parent is acquiring the Option
and, if and when it exercises the Option, will be acquiring the Optioned Shares
issuable upon the exercise thereof, for its own account and not with a view to
distribution or resale in any manner which would be in violation of the
Securities Act of 1933, as amended (the "Securities Act"), and will not sell or
otherwise dispose of the Optioned Shares except pursuant to an effective
registration statement under the Securities Act or a valid exemption from
registration under the Securities Act.
6. The Closing. Any closing hereunder shall take place on the Closing
Date specified by Parent in its Stock Exercise Notice pursuant to Section 1 at
10:00 A.M., local time, or the first business day thereafter on which all of the
conditions in Section 2 are met, at the principal executive office of the
Company, or at such other time and place as the parties hereto may agree.
7. Filings Related to Optioned Shares. The Company will make such filings
with the SEC as are required by the Exchange Act, and will use its best efforts
to effect all necessary filings by the Company under the HSR Act and to have the
Optioned Shares approved for quotation on NASDAQ.
8. Registration Rights. (a) If the Company effects any registration or
registrations of shares of Company Common Stock under the Securities Act for its
own account or for any other stockholder of the Company at any time after the
exercise of the Option (other than a registration on Form X-0, Xxxx X-0 or any
successor forms), it will allow Parent to participate in such registration or
registrations with respect to any or all of the Optioned Shares acquired upon
the exercise of the Option; provided, however, that any request of Parent
pursuant to this Section 8(a) shall be with respect to at least 100,000 Optioned
Shares and provided, further, that if the managing underwriters in such offering
advise the Company that, in their written opinion, the number of Optioned Shares
requested by Parent to be included in such registration exceeds the number of
shares of Company Common Stock which can be sold in such offering, the Company
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may exclude from such registration all or a portion, as may be appropriate, of
the Optioned Shares requested for inclusion by Parent.
(b) At any time after the exercise of the Option, upon the request of
Parent, the Company will as promptly as practicable file and use its best
efforts to cause to be declared effective a registration statement under the
Securities Act (and applicable Blue Sky statutes) with respect to any or all of
the Optioned Shares acquired upon the exercise of the Option; provided, however,
that any request of Parent pursuant to this Section 8(b) shall be with respect
to at least 100,000 Optioned Shares and provided, further, that the Company
shall not be required to have declared effective more than two registration
statements hereunder and shall be entitled to delay the effectiveness of each
such registration statement, for a period not to exceed 90 days in the
aggregate, if the commencement of such offering would, in the reasonable good
faith judgment of the Board of Directors of the Company, require premature
disclosure of any material corporate development or otherwise materially
interfere with or materially adversely affect any pending or proposed offering
of securities of the Company. In connection with any such registration
requested by Parent, the costs of such registration shall be borne by the
Company, and the Company and Parent each shall provide the other and any
underwriters with customary indemnification and contribution agreements.
9. Optional Put; Optional Repurchase. (a) Prior to the termination of the
Option in accordance with Section 19, if a Put Event has occurred, Parent shall
have the right, upon three business days' prior written notice to the Company,
to require the Company to purchase the Option from Parent (the "Put Right") at a
cash purchase price (the "Put Price") equal to the product determined by
multiplying (A) the number of Optioned Shares as to which the Option has not yet
been exercised by (B) the Spread (as defined below). As used herein, "Put
Event" means the occurrence on or after the date hereof of any of the following:
(i) any Person (other than Parent or its affiliates) acquires or becomes the
beneficial owner of 50% or more of the outstanding shares of Company Common
Stock or (ii) the Company consummates a merger or other business combination
involving the Company or a "significant subsidiary" (as defined in Rule 1.02(v)
of Regulation S-X as promulgated by the SEC) of the Company or the acquisition
of a substantial interest in, or a substantial portion of the assets, business
or operations of, the Company or a significant subsidiary (other than the
transactions contemplated by the Merger Agreement). As used herein, the term
"Spread" shall mean the excess, if any, of (i) the greater of (x) the highest
price (in cash or fair market value of securities or other property) per share
of Company Common Stock paid or to be paid within 12 months preceding the date
of exercise of the Put Right for any shares of Company Common Stock beneficially
owned by any Person who shall have acquired or become the beneficial owner of
20% or more of the outstanding shares of Company Common Stock after the date
hereof or (y) the average of the last reported sales prices quoted on NASDAQ of
the Company Common Stock during the five trading days immediately preceding the
written notice of exercise of the Put Right over (ii) the Exercise Price.
(b) At any time after the termination of the Option granted hereunder
pursuant to Section 19 and for a period of 90 days thereafter, the Company shall
have the right, upon three business days' prior written notice, to repurchase
from Parent (the "Repurchase Right"), all (but not less than all) of the
Optioned Shares acquired by the Company hereby and with respect to which the
Company then has beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) at a price per share equal to the greater of (i) the average of
the last reported sales price quoted on
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NASDAQ of the Company Common Stock during the five trading days immediately
preceding the written notice of exercise of the Repurchase Right and (ii) the
Exercise Price, plus interest at a rate per annum equal to the costs of funds to
Parent at the time of exercise of the Repurchase Right.
10. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise provided in Section 8 or as
specified in the Merger Agreement.
11. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of Illinois in any action, suit or proceeding
arising in connection with this Agreement, and agrees that any such action, suit
or proceeding shall be brought only in such courts (and waives any objection
based on forum non conveniens or any other objection to venue therein). Each
party hereto waives any right to a trial by jury in connection with any such
action, suit or proceeding.
12. Notice. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or if sent by
telex or telecopier (and also confirmed in writing) to the person at the address
set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
(a) if to Parent, to:
GE Fanuc Automation North America, Inc.
X.X. Xxx 0000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: President and CEO
Facsimile No.: 000-000-0000
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Xxxxx 00 Xxxxx xxx Xxxxx 000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
X.X. Xxx 0000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
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Attention: Senior Vice President and General Counsel
Facsimile No.: 000-000-0000
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxxx
Facsimile No.: 312-853-7036
(b) if to the Company, to:
Total Control Products, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx
Attention: Xxxxxxxx Xxxx
Facsimile No.: 000-000-0000
with a copy to:
X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: 000-000-0000
13. Parties in Interest. This Agreement shall inure to the benefit of and
be binding upon the parties named herein and their respective successors and
assigns. Nothing in this Agreement, expressed or implied, is intended to confer
upon any Person other than Parent or the Company, or their permitted successors
or assigns, any rights or remedies under or by reason of this Agreement.
14. Entire Agreement; Amendments. This Agreement, together with the
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
15 Assignment. No party to this Agreement may assign any of its rights or
delegate any of its obligations under this Agreement (whether by operation of
law or otherwise) without the prior written consent of the other party hereto,
except that Parent may, without a written consent, assign its rights and
delegate its obligations hereunder in whole or in part to one or more of its
direct or indirect wholly owned subsidiaries.
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16. Headings. The section headings herein are for convenience only and
shall not affect the construction of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. Except to the extent that the laws of the State of
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
19. Termination. This Agreement and the Option shall terminate upon the
earlier of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms; provided, however, the Option shall not
terminate until 120 days after a termination pursuant to clause (ii) immediately
above if (A) the Merger Agreement is terminated by Parent or Sub pursuant to
Section 8.1(d) thereof, (B) the Merger Agreement is terminated by the Company
pursuant to Section 8.1(e) thereof or (C) unless the Company has terminated the
Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to
the termination, a Takeover Proposal (as defined in the Merger Agreement) shall
have been commenced or the Company shall have entered into an agreement with
respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal; provided, further, that this Agreement shall not terminate
with respect to the Repurchase Right set forth in Section 9(b) until 90 days
after the termination of the Option pursuant to the foregoing proviso.
Notwithstanding the foregoing, the provisions of Section 8 shall survive the
termination of this Agreement until such time as Parent or any of its affiliates
ceases to beneficially own at least 100,000 of the Optioned Shares.
20. Capitalized Terms. Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in the Merger Agreement.
21. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
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IN WITNESS WHEREOF, Parent and the Company have caused this Agreement to be
duly executed and delivered on the day and year first above written.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Xxx Xxxxx
Xxx Xxxxx, President
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Nic Gihl
Nic Gihl, President
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