VOTING AGREEMENT
EXHIBIT 10.3
This
Voting Agreement (“Agreement”)
is made and entered into as of February 20, 2008, by and between SYS, a
California corporation (“Company”),
and the undersigned Stockholder (“Stockholder”)
of Kratos Defense & Security Solutions, Inc., a Delaware corporation (the
“Parent”). Certain
capitalized terms used in this Agreement that are not defined herein shall have
the meaning given to such terms in the Merger Agreement (as defined
below).
RECITALS
WHEREAS, Stockholder is the
holder of record and the “beneficial owner” (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of certain shares of common stock of
Parent;
WHEREAS, concurrently with the
execution and delivery of this Agreement, Parent, White Shadow, Inc., a
California corporation and wholly owned subsidiary of Parent (“Merger
Sub”) and the Company are entering into an Agreement and Plan of Merger
and Reorganization (the “Merger
Agreement”) which provides, upon the terms and subject to the conditions
set forth therein, for the merger of Merger Sub with and into the Company (the
“Merger”);
and
WHEREAS, as a condition and
inducement to the Company’s willingness to enter into the Merger Agreement,
Stockholder has agreed to execute and deliver this Agreement.
NOW, THEREFORE, the parties to
this Agreement, intending to be legally bound, agree as follows:
1. Agreement
to Vote Shares. Prior to
the Termination Date, at every meeting of the Stockholders of Parent called with
respect to any of the following, and at every adjournment or postponement
thereof, and on every action or approval by written consent of the Stockholders
of Parent with respect to any of the following, Stockholder shall vote the
Subject Securities: (a) in favor of the issuance of additional shares
of Parent Common Stock in connection with the Merger and in favor of any matter
that could reasonably be expected to facilitate the Merger, and (b) against any
other action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Parent
under the Merger Agreement or which could result in any of the conditions to the
consummation of the Merger under the Merger Agreement not being
fulfilled.
2. Irrevocable
Proxy. Concurrently
with the execution of this Agreement, Stockholder agrees to deliver to the
Company a proxy in the form attached hereto (the “Proxy”),
which shall be irrevocable to the extent provided in Section 212 of the Delaware
General Corporation Law, with respect to the shares referred to
therein.
3. Agreement
to Retain Shares.
(a) Restriction on
Transfer. Except as otherwise provided in Section 3(c), during
the period from the date of this Agreement through the Termination Date,
Stockholder shall not, directly or indirectly, cause or permit any Transfer of
any of the Subject Securities to be effected.
(b) Restriction on Transfer of Voting
Rights. During the period from the date of this Agreement
through the Termination Date, Stockholder shall ensure that: (a) none
of the Subject Securities is deposited into a voting trust; and (b) no proxy
(other than the Proxy granted herein) is granted, and no voting agreement or
similar agreement is entered into, with respect to any of the Subject
Securities.
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(c) Permitted
Transfers. Section 3(a) shall not prohibit a transfer of
Company Common Stock by Stockholder (a) if Stockholder is an individual, (i) to
any member of Stockholder’s immediate
family, or to a trust for the benefit of Stockholder or any member of
Stockholder’s
immediate family, or (ii) upon the death of Stockholder, or (b) if Stockholder
is a partnership or limited liability company, to one or more partners or
members of Stockholder or to an affiliated corporation under common control
with Stockholder; provided, however, that a
transfer referred to in this sentence shall be permitted only if, as a
precondition to such transfer, the transferee agrees in a writing, reasonably
satisfactory in form and substance to Parent, to be bound by the terms of this
Agreement and delivers a proxy to Parent in substantially the form of the Proxy
attached hereto.
4. Waiver
of Appraisal Rights. Stockholder
hereby irrevocably and unconditionally waives any rights of appraisal, any
dissenters’ rights and any similar rights relating to the Merger or any related
transaction that Stockholder may have by virtue of any outstanding shares of
Company Common Stock Owned by Stockholder.
5. Representations,
Warranties and Covenants of Stockholder. Stockholder
hereby represents and warrants to Parent as follows:
(a) Due Authorization,
Etc. All consents, approvals, authorizations and orders
necessary for the execution and delivery by Stockholder of this Agreement and
the Proxy have been obtained, and Stockholder has full right, power and
authority to enter into this Agreement and the Proxy. This Agreement
and the Proxy have been duly executed and delivered by Stockholder and
constitute valid and binding agreements of Stockholder enforceable in accordance
with their terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’
rights generally and subject to general principles of equity.
(b) No Conflict. The
execution and delivery of this Agreement and the Proxy by Stockholder do not,
and the performance of this Agreement and the Proxy by Stockholder will not (i)
conflict with or violate any law, rule, regulation, order, decree or judgment
applicable to Stockholder or by which he or it or any of his or its properties
is or may be bound or affected; or (ii) result in or constitute any breach of or
default under, or give to any other Person any right of termination, amendment,
acceleration or cancellation of, or result in the creation of any encumbrance or
restriction on any of the Subject Securities pursuant to, any contract to which
Stockholder is a party or by which Stockholder or any of his or its affiliates
or properties is or may be bound or affected.
(c) Title to
Securities. As of the date of this Agreement: (a)
Stockholder holds of record (free and clear of any encumbrances or restrictions)
the number of outstanding shares of Company Common Stock set forth under the
heading “Shares Held of
Record” on
the signature page of this Agreement; (b) Stockholder holds (free and clear of
any encumbrances or restrictions) the options, warrants and other rights to
acquire shares of Company Common Stock set forth under the heading “Options and Other
Rights” on
the signature page of this Agreement; (c) Stockholder Owns the additional
securities of the Company set forth under the heading “Additional
Securities Beneficially Owned” on the signature
page of this Agreement; and (d) Stockholder does not directly or indirectly Own
any shares of capital stock or other securities of the Company, or any option,
warrant or other right to acquire (by purchase, conversion or otherwise) any
shares of capital stock or other securities of the Company, other than the
shares and options, warrants and other rights set forth on the signature page of
this Agreement.
(d) Accuracy of
Representations. The representations and warranties contained
in this Agreement are accurate in all respects as of the date of this Agreement,
and will be accurate in all respects at all times through the Termination
Date.
6. Additional
Covenants of Stockholder.
(a) Further
Assurances. From time to time and without additional
consideration, Stockholder shall (at Stockholder’s sole expense)
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall (at Stockholder’s sole expense)
take such further actions, as Parent may request for the purpose of carrying out
and furthering the intent of this Agreement.
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7. Miscellaneous.
(a) Survival of Representations,
Warranties and Agreements. All representations and warranties
made by Stockholder in this Agreement shall survive (i) the consummation of the
Merger, and (ii) the Termination Date.
(b) Assignment; Binding
Effect. Except as provided herein, neither this Agreement nor
any of the interests or obligations hereunder may be assigned or delegated by
Stockholder, and any attempted or purported assignment or delegation of any of
such interests or obligations shall be void. Subject to the preceding
sentence, this Agreement shall be binding upon Stockholder and his heirs,
estate, executors and personal representatives and his or its successors and
assigns, and shall inure to the benefit of Parent and its successors and
assigns. Without limiting any of the restrictions set forth in
Section 3(a) or elsewhere in this Agreement, this Agreement shall be binding
upon any Person to whom any Subject Securities are
transferred. Nothing in this Agreement is intended to confer on any
Person (other than the Company and its successors and assigns) any rights or
remedies of any nature.
(c) Specific
Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement or the Proxy
were not performed in accordance with its specific terms or were otherwise
breached. Stockholder agrees that, in the event of any breach or
threatened breach by Stockholder of any covenant or obligation contained in this
Agreement or in the Proxy, Parent shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (a) a decree or order of specific performance to enforce the observance
and performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. Stockholder further
agrees that neither Parent nor any other Person shall be required to obtain,
furnish or post any bond or similar instrument in connection with or as a
condition to obtaining any remedy referred to in this Section 7(c), and
Stockholder irrevocably waives any right he or it may have to require the
obtaining, furnishing or posting of any such bond or similar
instrument.
(d) Waiver. No failure
on the part of the Company to exercise any power, right, privilege or remedy
under this Agreement, and no delay on the part of the Company in exercising any
power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other
or further exercise thereof or of any other power, right, privilege or
remedy. The Company shall not be deemed to have waived any claim
available to the Company arising out of this Agreement, or any power, right,
privilege or remedy of the Company under this Agreement, unless the waiver of
such claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of the Company; and any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
(e) Governing Law;
Venue. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts or choice of
law. Any legal action or other legal proceeding relating to this
Agreement or the Proxy or the enforcement of any provision of this Agreement or
the Proxy may be brought or otherwise commenced in any state or federal court
located in the State of Delaware. Stockholder:
(i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the State of Delaware in connection with any such legal
proceeding;
(ii) agrees
that service of any process, summons, notice or document by U.S. mail addressed
to him or it at the address set forth on the signature page hereof shall
constitute effective service of such process, summons, notice or document for
purposes of any such legal proceeding;
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(iii) agrees
that each state and federal court located in the State of Delaware shall be
deemed to be a convenient forum; and
(iv) agrees
not to assert (by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in any state or federal court located in the State of
Delaware, any claim that Stockholder is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be enforced in or by
such court.
Nothing
contained in this Section 7(e) shall be deemed to limit or otherwise affect the
right of the Company to commence any legal proceeding or otherwise proceed
against Stockholder in any other forum or jurisdiction.
HOLDER
IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL
PROCEEDING RELATING TO THIS AGREEMENT OR THE PROXY OR THE ENFORCEMENT OF ANY
PROVISION OF THIS AGREEMENT OR THE PROXY.
(f) Counterparts. This
Agreement may be executed in two or more counterparts (including by facsimile),
each of which shall be deemed an original and all of which together shall
constitute one instrument.
(g) Entire
Agreement. This Agreement, the Proxy and any other documents
delivered by the parties in connection herewith constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings between the parties with
respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon either party unless made in writing and
signed by both parties.
(h) Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(i) Notices. Any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, or forty-eight (48) hours after being
deposited in the regular mail as certified or registered mail (airmail if sent
internationally) with postage prepaid, if such notice is addressed to the party
to be notified at such party’s address or
facsimile number as set forth below, or as subsequently modified by written
notice.
(j) Attorneys’ Fees. If any legal
action or other legal proceeding relating to this Agreement or the enforcement
of any provision of this Agreement is brought against Stockholder, the
prevailing party shall be entitled to recover reasonable attorneys’ fees, costs and
disbursements (in addition to any other relief to which the prevailing party may
be entitled).
(k) Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, the parties agree to renegotiate such provision in good faith,
in order to maintain the economic position enjoyed by each party as close as
possible to that under the provision rendered unenforceable. In the
event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded
from this Agreement, (ii) the balance of the Agreement shall be interpreted
as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.
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(l) Construction.
(i) For
purposes of this Agreement, whenever the context requires: the singular number
shall include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; the feminine gender shall include the masculine and
neuter genders; and the neuter gender shall include masculine and feminine
genders.
(ii) The
parties agree that any rule of construction to the effect that ambiguities are
to be resolved against the drafting party shall not be applied in the
construction or interpretation of this Agreement.
(iii) As used
in this Agreement, the words “include” and “including,” and variations thereof,
shall not be deemed to be terms of limitation, but rather shall be deemed to be
followed by the words “without limitation.”
(iv) Except as
otherwise indicated, all references in this Agreement to “Sections” and
“Exhibits” are intended to refer to Sections of this Agreement and Exhibits to
this Agreement.
8. Certain
Definitions. For
purposes of this Agreement,
(a) Stockholder
shall be deemed to “Own” or to have
acquired “Ownership” of a security if
Stockholder is the “beneficial
owner” within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 of such
security.
(b) “Parent Common
Stock”
shall mean the common stock, par value $0.01 per share, of Parent.
(c) “Person” shall mean any
(i) individual, (ii) corporation, limited liability company, partnership or
other entity, or (iii) Governmental Body.
(d) “Subject
Securities”
shall mean: (i) all securities of the Company (including all shares of Company
Common Stock and all, options, warrants and other rights to acquire shares of
Company Common Stock) Owned by Stockholder as of the date of this Agreement; and
(ii) all additional securities of the Company (including all additional shares
of Company Common Stock and all additional options, warrants and other rights to
acquire shares of Company Common Stock) of which Stockholder acquires Ownership
during the period from the date of this Agreement through the Termination
Date.
(e) The term
“Termination
Date”
means the earlier to occur of the date of the consummation of the transactions
contemplated by the Merger Agreement or the date the Merger Agreement terminates
in accordance with its terms.
(f) A Person
shall be deemed to have a effected a “Transfer” of a security if
such Person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security to any Person other than Parent; (ii) enters into an agreement
or commitment contemplating the possible sale of, pledge of, encumbrance of,
grant of an option with respect to, transfer of or disposition of such security
or any interest therein to any Person other than Parent; or (iii) reduces such
Person’s
beneficial ownership of, interest in or risk relating to such
security.
[Signature
page follows.]
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The
parties have caused this Agreement to be duly executed on the date first above
written.
COMPANY:
By:
Name:
Xxxxxxx X. Xxxxx,
Xx.
Title:
Chief Executive
Officer
Address
for notices:
0000 Xxxxxx Xxxxxx Xxxx,
Xxxxx 000
Xxx Xxxxx,
XX 00000
STOCKHOLDER:
_________________________________
Name:
Address
for notices:
|
Shares Held of Record
|
Options and Other Rights
|
Shares Beneficially
Owned
|
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IRREVOCABLE
PROXY
The
undersigned Stockholder (the “Stockholder”)
of Kratos Defense & Security Solutions, Inc., a Delaware corporation (“Parent”),
hereby irrevocably (to the full extent permitted by Section 212 of the Delaware
General Corporation Law) appoints Xxxxxxx X. Xxxxx, Chief Executive Officer and
Xxxxxx X. Lake, Chief Financial Officer of SYS, a California corporation (the
“Company”),
and each of them, as the sole and exclusive attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights expressly provided herein (to the full
extent that the undersigned is entitled to do so) with respect to (i) the
outstanding shares of capital stock of Parent owned of record by the Stockholder
as of the date of this proxy (this “Proxy”),
which shares are specified on the final page of this Proxy, and (ii) any and all
other shares of capital stock of Parent which the Stockholder may acquire on or
after the date hereof. (The shares of the capital stock of Parent
referred to in clauses “(i)” and “(ii)” of the immediately preceding sentence
are collectively referred to as the “Shares.”) Upon
the undersigned’s execution of this Proxy, any and all prior proxies given by
the undersigned with respect to any Shares are hereby revoked and the
undersigned agrees not to grant any subsequent proxies with respect to the
Shares at any time prior to the Termination Date (as defined
below).
This
Proxy is irrevocable (to the extent permitted by Section 212 of the Delaware
General Corporation Law), is coupled with an interest and is granted pursuant to
that certain Voting Agreement of even date herewith, by and between Company and
the undersigned Stockholder, and is granted in consideration of Parent entering
into that certain Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”), of even date herewith, by and among the Company, Parent and
White Shadow, Inc., a California corporation (“Merger
Sub”). The Merger Agreement provides for the merger of Merger
Sub with and into the Company (the “Merger”). As
used herein, the term “Termination
Date” shall mean the earlier to occur of (i) the date and time as the
Merger shall become effective in accordance with the terms and provisions of the
Merger Agreement, or (ii) the date the Merger Agreement shall terminate in
accordance with its terms.
The
attorneys and proxies named above, and each of them, are hereby authorized and
empowered by the undersigned, at any time prior to the Termination Date, to act
as the undersigned’s attorney and proxy to vote the Shares, and to exercise all
voting and other rights of the undersigned with respect to the Shares
(including, without limitation, the power to execute and deliver written
consents pursuant to Section 228 of the Delaware General Corporation Law), at
every annual, special or adjourned meeting of the shareholders of the Parent and
in every written consent in lieu of such meeting: (i) in favor of the
issuance of additional shares of Parent Common Stock in connection with the
Merger and in favor of any matter that could reasonably be expected to
facilitate the Merger, and (ii) against any other action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of the Parent under the Merger Agreement or which could
result in any of the conditions to the consummation of the Merger under the
Merger Agreement not being fulfilled.
The
Stockholder may vote the Shares on all other matters not referred to in this
Proxy, and the attorneys and proxies named above may not exercise this Proxy
with respect to such other matters.
This
Proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the Stockholder (including any
transferee of any of the Shares).
If any
provision of this Proxy or any part of any such provision is held under any
circumstances to be invalid or unenforceable in any jurisdiction, then (a) such
provision or part thereof shall, with respect to such circumstances and in such
jurisdiction, be deemed amended to conform to applicable laws so as to be valid
and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
Proxy. Each provision of this Proxy is separable from every other
provision of this proxy, and each part of each provision of this Proxy is
separable from every other part of such provision.
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Dated:
February 20, 2008
| (Signature of Stockholder) | |
| (Print Name of Stockholder) | |
| Number of shares of common stock of Parent owned of record as of the date of this Proxy: | |
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