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EXHIBIT 1
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of December 9, 1999
(the "Agreement"), among Xxxxx Corporation ("Parent"), a Wisconsin corporation,
and the persons listed on Schedule I hereto (each a "Shareholder" and,
collectively, the "Shareholders").
R E C I T A L S:
WHEREAS, Parent has indicated its willingness to enter into an
agreement for the acquisition of Imtec, Inc., a Delaware corporation ("Company")
through an Agreement and Plan of Merger (the "Merger Agreement") which would
provide, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Parent or a subsidiary (in either
event, the "Purchaser") for all outstanding shares of Common Stock, par value
$0.01 per share, of the Company (the "Common Stock") and for the subsequent
merger of Purchaser with the Company (the "Merger"), all on the terms and
subject to the conditions to be set forth in the Merger Agreement;
WHEREAS, as an inducement and a condition to entering into
negotiation of the Merger Agreement, Purchaser has required that the
Shareholders agree, and each Shareholder has agreed, to enter into this
Agreement; and
WHEREAS, the Board of Directors of the Company has approved
this Agreement and the transactions contemplated hereby prior to the date
hereof;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. Definitions. Capitalized terms have the meanings
provided herein.
2. Tender of Shares; Agreement to Sell.
(a) In order to induce Parent to enter into negotiation of the
Merger Agreement, each Shareholder hereby agrees to validly tender (or cause the
record owner of such shares to validly tender), and not to withdraw, pursuant to
and in accordance with the terms of the Offer, not later than the tenth business
day after commencement of the Offer, the number of shares of Common Stock set
forth opposite such Shareholder's name on Schedule I hereto (the "Existing
Shares") and, together with any shares of Common Stock acquired by such
Shareholder in any capacity after the date hereof and prior to the termination
of this Agreement by means of purchase, dividend, distribution, exercise of
options, warrants or other rights to acquire Common
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Stock or in any other way (together, the "Shares"), all of which are
beneficially owned by Shareholder. If a Shareholder acquires beneficial
ownership of Shares after the date hereof, such Shareholder shall tender such
Shares on such tenth business day or, if later, on the second business day after
such acquisition. Each Shareholder hereby acknowledges and agrees that
Purchaser's obligation to accept for payment, purchase and pay for the Shares in
the Offer, including the Shares beneficially owned by the Shareholders, is
subject to the terms and conditions of the Offer. Purchaser, by written notice
delivered to a Shareholder, will have the right to direct such Shareholder not
to tender to, or to withdraw from, the Offer any Shares beneficially owned by
such Shareholder and, upon receipt of any such notice, such Shareholder shall
comply with the direction included in such notice.
(b) As promptly as practicable following the expiration of the
Offer (but in no event later than 10:00 a.m., Milwaukee time, on the first
trading day immediately after such expiration), each Shareholder hereby
severally and not jointly agrees to sell to Purchaser, and Purchaser agrees to
purchase, all Shares owned by such Shareholder not tendered or validly withdrawn
from the Offer pursuant to Section 2(a) at a price equal to $12.00 per Share or,
if less, the price provided in the Merger Agreement. The obligations of each
Shareholder and Purchaser in this Section 2(b) is conditioned upon Purchaser
purchasing shares of Common Stock pursuant to the Offer.
(c) Purchaser shall be entitled to deduct and withhold from
the consideration otherwise payable hereunder to a holder of Shares any stock
transfer taxes and such amounts as are required to be withheld under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
provision of state, local or foreign tax law, as specified in the Offer
Documents. To the extent that amounts are so withheld by Purchaser, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Purchaser.
(d) Each Shareholder hereby permits Purchaser to publish and
disclose in the Offer Documents and, if approval of the Company's shareholders
is required under applicable law, any proxy statement (including all documents
and schedules filed with the SEC), such Shareholder's identity and ownership of
the Shares and the nature of such Shareholder's commitments, arrangements and
understandings under this Agreement; provided that such Shareholder shall have
the right to review and comment on such disclosure a reasonable time before it
is publicly disclosed.
3. Option. (a) In order to induce Parent to enter into
negotiation of the Merger Agreement, each Shareholder hereby grants to Purchaser
an irrevocable option (each, an "Option") to purchase the Shares beneficially
owned by such Shareholder (the "Option Shares") at a price equal to $12.00 per
Share, subject to
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adjustment in the event of a stock-split, stock dividend or additional share
issuance by the Company. Each Option granted by a Shareholder may be exercised
in whole or in part at any time after (i) sixty days from the date hereof if the
Merger Agreement has not been signed by the Company and Purchaser; (ii) the
occurrence of any event as a result of which Parent is entitled to receive a
termination fee under the Merger Agreement or (iii) such time as such
Shareholder shall have breached any of its agreements in the Merger Agreement.
(b) Each Option that becomes exercisable under Section 3(a)
shall remain exercisable until the later of (i) the date that is 120 days after
the date such Option becomes exercisable and (ii) the date that is 60 days after
the date that all waiting periods under the Xxxx-Xxxxx-Xxxxxx Anti-Trust
Improvements Act (the "HSR Act") required for the purchase of the Shares upon
such exercise shall have expired or been terminated; provided that if at the
expiration of such period there shall be in effect any injunction or other order
issued by any federal, state, local or foreign governmental unit or agency (a
"Governmental Entity") prohibiting the exercise of such Option, the exercise
period shall be extended until 60 days after the date that no such injunction or
order is in effect. In the event that Purchaser wishes to exercise an Option,
Purchaser shall send a written notice to the applicable Shareholder identifying
the place and date (not less than two nor more than ten business days from the
date of the notice) for the closing of such purchase.
4. Additional Agreements.
(a) Subject to Section 8 of this Agreement, each Shareholder
shall, at any meeting of the shareholders of the Company, however called, or in
connection with any written consent of the shareholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned by such
Shareholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof and (ii) against any
proposal relating to an acquisition proposal by any person or entity other than
Purchaser (an "Acquisition Proposal") and against any action or agreement that
would impede, frustrate, prevent or nullify this Agreement, or result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which would
result in any of the conditions set forth in the Merger Agreement not being
fulfilled.
(b) Each Shareholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, it shall not (i) offer
to transfer (which term shall include, without limitation, any sale, tender,
gift, pledge, assignment or other disposition), transfer or consent to any
transfer of, any or all of the Shares beneficially owned by such Shareholder or
any interest therein, (ii) enter into
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any contract, option or other agreement or understanding with respect to any
transfer of any or all of such Shares or any interest therein, (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
such Shares, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
(c) Each Shareholder hereby irrevocably grants to, and
appoints, Purchaser and any designee of Purchaser, and each of them
individually, such Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Shareholder, to vote
the Shares beneficially owned by such Shareholder, or grant a consent or
approval in respect of such Shares, in the manner specified in Section 4(a).
Each Shareholder represents that any proxies heretofore given in respect of
Shares beneficially owned by such Shareholder are not irrevocable and that any
such proxies are hereby revoked. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
Purchaser's agreement to undertake negotiation of the Merger Agreement and that
such irrevocable proxy is given to secure the performance of the duties of such
Shareholder under this Agreement. Each Shareholder hereby further affirms that
the irrevocable proxy is coupled with an interest and may under no circumstances
be revoked. Each Shareholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Without
limiting the generality of the foregoing, such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section 212 of
the Delaware Corporation Law.
(d) Each Shareholder hereby agrees that neither such
Shareholder nor any of its affiliates, representatives or agents shall (and, if
such Shareholder is a corporation, partnership, trust or other entity, such
Shareholder shall cause its officers, directors, partners, and employees,
representatives and agents, including its investment bankers, attorneys and
accountants, not to), directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. Each Shareholder will immediately cease any existing activities,
discussions or negotiations conducted heretofore with respect to any Acquisition
Proposal. Each Shareholder will immediately communicate to Purchaser the terms
of any Acquisition Proposal (or any discussion, negotiation or inquiry with
respect thereto) and the identity of the person making such Proposal or inquiry
which it may receive.
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(e) Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws to consummate and make
effective the transactions contemplated by this Agreement. Each party shall
promptly consult with the other and provide any necessary information and
material with respect to all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
(f) Each Shareholder hereby waives any rights of appraisal or
rights to dissent from the Merger that it may have.
5. Representations and Warranties of each Shareholder. Each
Shareholder hereby represents and warrants, severally and not jointly, to
Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
Existing Shares set forth opposite its name on Schedule I. Such Existing Shares
constitute all of the Shares owned of record or beneficially owned by such
Shareholder on the date hereof. Such Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in Sections 2,
3 and 4 hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Existing Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Such Shareholder has the power and authority to enter into
and perform all of such Shareholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Shareholder is a trustee, or any party to any other
agreement or arrangement, whose consent is required for the execution and
delivery of this Agreement or the consummation by such Shareholder of the
transactions contemplated hereby.
(c) Except for filings under the HSR Act and the Securities
Exchange Act of 1934 (the "Exchange Act") (i) no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery of this Agreement by such Shareholder, the
consummation by such Shareholder of the transactions contemplated hereby and the
compliance by such Shareholder with the provisions hereof and (ii) none of the
execution and delivery of this Agreement by such Shareholder, the consummation
by such Shareholder of the transactions contemplated
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hereby or compliance by such Shareholder with any of the provisions hereof,
except in cases in which any conflict, breach, default or violation described
below would not interfere with the ability of such Shareholder to perform such
Shareholder's obligations hereunder, shall (A) conflict with or result in any
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind, including, without limitation, any voting agreement,
proxy arrangement, pledge agreement, shareholders agreement or voting trust, to
which such Shareholder is a party or by which it or any of its properties or
assets may be bound or (C) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Shareholder or
any of its properties or assets.
(d) Except as permitted by this Agreement, the Existing Shares
beneficially owned by such Shareholder and the certificates representing such
shares are now, and at all times during the term hereof will be, held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by such Shareholder of the
Shares to Purchaser in the Offer or hereunder shall pass to and unconditionally
vest in Purchaser good and valid title to all Shares, free and clear of all
liens, proxies, voting trusts or agreements, understandings or arrangements or
any other rights whatsoever.
(e) No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Shareholder.
6. Stop Transfer. Each Shareholder shall request that the
Company not register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of the Shares beneficially owned by
such Shareholder, unless such transfer is made in compliance with this
Agreement.
7. Termination. This Agreement shall terminate with respect to
any Shareholder upon the earliest of (a) the effective time of the Merger
Agreement, (b) the first anniversary of the date hereof or (c) the termination
of the Merger Agreement (unless, in the case of this clause (c), Purchaser is or
may be entitled to receive a termination fee under the Merger Agreement
following such termination or prior to such termination such Shareholder has
breached Section 2(a), 4(a), 4(b) or 4(d)).
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8. No Limitation. Nothing in this Agreement shall be construed
to prohibit Shareholder, or any officer or affiliate of a Shareholder who is or
has designated a member of the Board of Directors of the Company, from taking
any action solely in his or her capacity as a member of the Board of Directors
of the Company or from exercising his or her fiduciary duties as a member of
such Board of Directors to the extent specifically permitted by the Delaware
General Corporation Law, as may be modified by the terms of the Merger
Agreement.
9. Miscellaneous. (a) This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of each Shareholder (in the case
of any assignment by Purchaser ) or Purchaser (in the case of an assignment by a
Shareholder), provided that Purchaser may assign its rights and obligations
hereunder to any direct or indirect subsidiary of Parent, but no such assignment
shall relieve Purchaser of its obligations hereunder.
(c) Without limiting any other rights Purchaser may have
hereunder in respect of any transfer of Shares, each Shareholder agrees that
this Agreement and the obligations hereunder shall attach to the Shares
beneficially owned by such Shareholder and shall be binding upon any person to
which legal or beneficial ownership of such Shares shall pass, whether by
operation of law or otherwise, including, without limitation, such Shareholder's
heirs, guardians, administrators or successors.
(d) This Agreement may not be amended, changed, supplemented
or otherwise modified with respect to a Shareholder except by an instrument in
writing signed on behalf of such Shareholder and Purchaser.
(e) 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 received if given) by hand delivery or by facsimile
transmission with confirmation of receipt, as follows:
If to a Shareholder:
At the addresses and facsimile numbers set forth on
Schedule I hereto.
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If to Parent or Purchaser:
Xxxxx Corporation
0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction such invalidity, illegality
or unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(h) The failure of any party hereto to exercise any rights,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
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(i) 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 confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
(k) The parties 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 of this Agreement in any Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (A) consents to submit itself to
the personal jurisdiction of any Delaware state court or any Federal court
located in Delaware in the event any dispute arises out of this Agreement or by
any transaction contemplated by this Agreement, (B) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (C) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court and (D) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
transaction contemplated by this Agreement. The parties irrevocably and
unconditionally waive 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 courts of the State of Delaware or in any Federal court located in
Delaware, and hereby further irrevocably and unconditionally waive and agree 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 inconvenient forum.
(l) The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
(m) This Agreement may be executed in counterparts, each of
which (including facsimile copies) shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same agreement.
(n) Except as otherwise provided herein, each party shall pay
its, his or her own expenses incurred in connection with this Agreement
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IN WITNESS WHEREOF, Purchaser and the Shareholders have caused
this Agreement to be duly executed as of the day and year first above written.
XXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title:Group Vice President
SHAREHOLDERS:
/s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxx
--------------------------------
Xxxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx
/s/ Xxxxxx X. Xxx
--------------------------------
Xxxxxx X. Xxx
TRIGRAN INVESTMENTS, L.P.
By: /s/ Xxxx Xxxxxx
----------------------------
Name: Xxxx Xxxxxx
Title: President of Trigan Investments, Inc.,
General Partner
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/s/ Stevev X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
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SCHEDULE I
NUMBER OF SHARES
NAME, FACSIMILE NUMBER AND ADDRESS OF COMMON STOCK
OF SHAREHOLDER BENEFICIALLY OWNED
Xxxxx X. Xxxxx 151,466
00 Xxxxxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxxxx X. Xxxxx 147,965
00 Xxxxxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxxx X. Xxxxxx 109,900
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxx Xxxxxx 28,700
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
TRIGRAN INVESTMENTS, L.P. 273,120
Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxx Xxxxxxxxxx 81,875
0000 Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Fax: 000-000-0000
Xxxxxx X. Xxx 27,300
000 Xxxxx 0x Xxxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
X-0
00
XXXX, XXXXXXXXX NUMBER AND ADDRESS NUMBER OF SHARES
OF SHAREHOLDER OF COMMON STOCK
BENEFICALLY OWNED
Xxxxxx X. Xxxxx 55,000
00 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxxxxx 00000
Fax: 000-000-0000
I-2
