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EXHIBIT (c)(3)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of December 18, 1997 (the
"Agreement"), is by and between TEL-SAVE HOLDINGS, INC., a Delaware corporation
("Parent"), and SYMETRICS INDUSTRIES, INC., a Florida corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, TSHCo,
Inc., a Delaware corporation ("Purchaser"), and the Company have approved the
acquisition of the Company by Purchaser pursuant to a tender offer (the "Offer")
by Purchaser for all of the outstanding shares of common stock, par value $0.25
per share (the "Common Stock"), of the Company at a price of $15.00 in cash per
share followed by a merger (the "Merger") of the Purchaser with and into the
Company, all upon the terms and subject to the conditions set forth in an
Agreement and Plan of Merger of even date herewith by and among Parent,
Purchaser and the Company (the "Merger Agreement"), and certain other agreements
contemplated by the Merger Agreement (the "Transaction Documents"); and
WHEREAS, as a condition to Parent's entry into the Transaction
Documents, and to induce such entry, the Company has agreed to grant Parent the
option set forth herein to purchase authorized but unissued shares of Common
Stock, par value $0.25 per share;
NOW, THEREFORE, in consideration of the premises herein
contained, the parties agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not defined herein shall have the
same meanings as in the Transaction Documents.
(b) The term "Effective Date" shall have the meaning specified in
the Merger Agreement.
(c) The term "Grant Event" shall mean any occurrence described in
Section 8.3 of the Merger Agreement.
2. Grant of Option. Effective on the date of any Grant Event,
Parent shall have, and the Company hereby grants to Parent, the right and option
to purchase (the "Option") from the Company, at a price of $15.00 per share of
Common Stock (the "Exercise Price"), a number of shares of Common Stock equal to
19.9% of the aggregate number of shares of Common Stock outstanding after giving
effect to the exercise of the Option (the "Option Shares"). The Option shall be
exercisable by Parent, in whole at any time and in part from time to time,
within one (1) year after the effective date of such grant, by tender to the
Company of cash in payment of the exercise price therefor, whereupon the Company
shall promptly issue to Parent the number of shares of Common Stock for which
the Option is being exercised and the exercise price for which is so tendered,
such shares to be deemed for all purposes to be issued and outstanding as of and
after such tender of cash to the Company in payment of such exercise price.
3. Exercise of Option. In the event Parent wishes to exercise the
Option, it shall send to the Company a written notice (the date of which being
herein referred to as the "Notice Date")
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specifying (i) the total number of Option Shares it will purchase pursuant to
such exercise, and (ii) a place and date not earlier than three business days
nor later than 10 business days from the Notice Date for the closing of such
purchase (the "Closing Date"); provided that, if prior notification to or
approval of any federal or state regulatory agency is required in connection
with such purchase, Parent shall promptly file the required notice or
application for approval and shall expeditiously process the same and the period
of time that otherwise would run pursuant to this sentence shall run instead
from the date on which any required notification period has expired or been
terminated or such approval has been obtained and any requisite waiting period
shall have passed.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, Parent shall
pay to the Company the aggregate purchase price for the Option Shares purchased
pursuant to the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by the Company.
(b) At such closing, simultaneously with the delivery of cash as
provided in subsection (a), the Company shall deliver to Parent a certificate or
certificates representing the number of Option Shares purchased by Parent, and
Parent shall deliver to the Company a letter agreeing that Parent will not offer
to sell, pledge or otherwise dispose of such Option Shares in violation of
applicable law or the provisions of this Agreement.
(c) Certificates for the Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend which shall read
substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and the regulations promulgated thereunder and
may not be sold without registration under the Securities Act or
pursuant to an exemption from registration thereunder or with
such modifications as otherwise required by applicable law."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Parent shall have delivered
to the Company a copy of a letter from the staff of the SEC, or an opinion of
counsel, in form and substance satisfactory to the Company, to the effect that
such legend is not required for purposes of the Securities Act and any
applicable state securities laws and this Agreement.
5. Representations. The Company hereby represents, warrants and
covenants to Parent as follows:
(a) The Company shall at all times maintain sufficient authorized
but unissued shares of Common Stock so that the Option may be exercised without
authorization of additional shares of the Common Stock.
(b) The shares to be issued upon due exercise, in whole or in
part, of the Option, when paid for as provided herein, will be duly authorized,
validly issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, split-ups,
recapitalizations, combinations, exchanges of
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shares or the like, the type of shares subject to the Option, and the purchase
price per share, as the case may be, shall be adjusted appropriately. Nothing
contained in this Section 6 shall be deemed to authorize the Company to breach
any provision of the Transaction Documents.
7. Registration Rights. The Company shall, if requested by Parent,
as expeditiously as possible file a registration statement on a form of general
use and available for use by the Company under the Securities Act if necessary
in order to permit or assist the sale or other disposition of the Option Shares
that have been acquired upon exercise of the Option in accordance with the
intended method of sale or other disposition requested by Parent. Parent shall
provide all information reasonably requested by the Company for inclusion in any
registration statement to be filed hereunder. The Company will use its best
efforts to cause such registration statement first to become effective and then
to remain effective for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sales or other dispositions. The obligations of the Company
hereunder to file a registration statement and to maintain its effectiveness may
be suspended for one or more periods of time not exceeding 60 days in the
aggregate if the Board of Directors of the Company shall have determined that
the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of non-public information that would
materially and adversely affect the Company. The first registration statement
prepared under this Section 7 shall be at the Company's expense except for
underwriting commissions and the fees and disbursements of Parent's counsel
attributable to the offering of the Common Stock by Parent. The preparation of a
second registration statement may be requested and effected hereunder at
Parent's sole expense. In no event shall the Company be required to effect more
than two registration statements hereunder. The filing of any registration
statement hereunder may be delayed for such period of time as may reasonably be
required to facilitate any public distribution by the Company of the Common
Stock. If requested by Parent in connection with any registration, the Company
will become a party to any underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements for parties similarly situated. In any
such transaction the Company and Parent will also agree to indemnify each other
on customary terms with respect to any information provided by such party.
8. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the full
number of Option Shares provided in Section 2 hereof, it is the express
intention of the Company to allow the holder to acquire such lesser number of
shares as may be permissible, without any amendment or modification hereof.
9. Miscellaneous.
(a) Expenses. Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses
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incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the Transaction Documents contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
(c) Assignment. Other than as provided in Section 7 hereof,
neither of the parties hereto may assign any of its rights or obligations under
this Agreement or the Option created hereunder to any other person, without the
express written consent of the other party.
(d) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as provided in the Merger Agreement. A party may
change its address for notice purposes by written notice to the other party
hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(f) Specific Performance. The parties agree
that damages would be an inadequate remedy for a breach
of the provisions of this Agreement by either party
hereto and that this Agreement may be enforced by either party hereto through
injunctive or other equitable relief.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Delaware applicable to agreements made
and entirely to be performed within such state and such federal laws as may be
applicable.
(h) Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate upon the first to occur of (a) the
consummation of the Merger, (b) December 18, 1998, or (c) the date of
termination of the Merger Agreement by any of the parties thereto other than
pursuant to a Grant Event.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first written above.
TEL-SAVE HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Chairman and CEO
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SYMETRICS INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
