Exhibit 4
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of March __, 1998 (this "Agreement"), by
and between Scopus Technology, Inc., a California corporation (the "Company"),
and Siebel Systems, Inc., a Delaware corporation ("Parent").
RECITALS
A. The Company, Parent and Syracuse Acquisition Sub, a California
corporation ("Merger Sub"), are entering into an Agreement and Plan of
Reorganization, dated as of the date hereof (the "Merger Agreement"), providing
for, among other things, the merger of Merger Sub with and into the Company as
the surviving corporation in the Merger.
B. As a condition and inducement to Parent's willingness to enter into the
Merger Agreement, Parent has requested that the Company agree, and the Company
has agreed, to grant Parent the Option.
C. Terms not defined herein shall have the meanings set forth in the
Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
Company and Parent agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth herein,
the Company hereby grants to Parent an irrevocable option (the "Option") to
purchase up to 3,493,879 shares of the common stock of the Company (such shares,
subject to adjustment under Section 4 below, being referred to as the "Option
Shares"), at a purchase price of $20.00 (subject to adjustment as set forth
under Section 4 below) per Option Share (the "Purchase Price").
2. Exercise of Option.
(a) The Option shall become exercisable, and Parent may exercise the
Option, in whole or in part, on any one occasion at any time following the
occurrence of a Triggering Event; provided, however, that if the Option shall
have become exercisable under this Section 2(a), then the Option shall terminate
and be of no further force and effect upon the earliest to occur of (i) the
Effective Time, (ii) 270 days after the first occurrence of a Triggering Event,
and (iii) the valid termination of the Merger Agreement in accordance with its
terms prior to the occurrence of a Triggering Event.
(b) If (i) the Company Shareholders' Meeting shall have been held (either
on the date for which such meeting was originally scheduled or pursuant to any
permissible adjournment or postponement) and the Merger Agreement and the Merger
shall not have been adopted and approved at such meeting by the Required Company
Shareholder Vote, (ii) following the date hereof and at or prior to the time of
the Company Shareholders' Meeting, an Acquisition Proposal shall have been
publicly announced, and (iii) on or prior to the first anniversary of the
termination of the Merger Agreement, the Company shall have entered into a
definitive agreement providing for a Company Acquisition or a Company
Acquisition shall have been consummated, then the Option shall become
exercisable, and Parent may exercise the Option, in whole or in part, on any one
occasion at any time following the date of such definitive agreement (or if
there is no definitive agreement, the consummation of such Company Acquisition);
provided, however, that if the Option shall have become exercisable under this
Section 2(b), then the Option shall terminate and be of no further force and
effect 180 days after the date of such definitive agreement (or if there is no
definitive agreement, 180 days after the consummation of such Company
Acquisition).
(c) Notwithstanding the termination of the Option, Parent shall be
entitled to purchase the Option Shares if it has exercised the Option in
accordance with the terms hereof prior to the termination of the Option, and the
termination of the Option shall not affect any rights hereunder which do not by
their terms terminate or expire prior to or as of such termination.
(d) In the event that 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") to that effect which notice also specifies a date not earlier
than three business days nor later than 20 business days from the Notice Date
for the closing of the purchase of the Option Shares to be purchased (the
"Option Closing Date"); provided, however, that (i) if the closing of the
purchase of such Option Shares pursuant to the Option (the "Option Closing")
cannot be consummated by reason of any applicable judgment, decree, order, law
or regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting the
foregoing, if prior notification to or approval of any regulatory authority is
required in connection with such purchase, Parent and the Company shall promptly
file the required notice or application for approval and shall cooperate in the
expeditious filing of such notice or application, and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which, as the case may be, (A) any required notification period has expired or
been terminated or (B) any required approval has been obtained, and in either
event, any requisite waiting period has expired or been terminated. The place of
the Option Closing shall be at the offices of Cooley Godward LLP, Five Xxxx Xxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, and the time of the Option Closing shall be
10:00 a.m. (West Coast Time) on the Option Closing Date (as it may be extended
pursuant to this Section 2(d)).
3. Payment and Delivery of Certificates.
(a) At the Option Closing, Parent shall pay to the Company in immediately
available funds by wire transfer to a bank account designated in writing by the
Company an amount equal to the Purchase Price multiplied by the number of Option
Shares being acquired by Parent.
(b) At the Option Closing, simultaneously with the delivery of immediately
available funds as provided in Section 3(a), the Company shall deliver to Parent
a certificate or certificates representing the Option Shares to be purchased at
the Option Closing, which Option Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever other than those created
by Parent or created under applicable securities laws.
(c) Certificates for the Option Shares delivered at the Option Closing
shall have typed or printed thereon a restrictive legend which shall read
substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
ALSO SUBJECT TO BUY-BACK PROVISIOINS IN FAVOR OF THE ISSUER."
It is understood and agreed that the foregoing legend with respect to securities
laws shall be removed by delivery of substitute certificate(s) without such
legend upon the sale of any Option Shares pursuant to (i) a registered public
offering or (ii) Rule 144 under the Securities Act or any other sale as a result
of which such legend is no longer required (upon the receipt by the Company of
an opinion of counsel reasonably satisfactory to the Company that the conditions
for removal of such legend have been satisfied).
4. Adjustment upon Changes in Capitalization, Etc.
(a) In the event of any stock dividend or extraordinary cash or other
distribution, split-up, merger, consolidation, recapitalization, combination,
sale of all or substantially all of the Company's assets, exchange of shares, or
similar transaction involving the Company or any Company Stock, the type and
number of shares or securities subject to the Option, and the Purchase Price
therefor, shall be adjusted appropriately, and proper provision shall be made in
the agreements governing such transaction, so that Parent shall receive upon
exercise of the Option the number and class of shares or other securities or
property that Parent would have received in respect of Company Stock if the
Option had been exercised immediately prior to such event or the record date
therefor, as applicable.
(b) If at any time from the date the Option becomes exercisable through the
tenth anniversary of such date, Parent or any of Parent's affiliates effects a
sale, transfer or other disposition of the Option or any of the Option Shares or
any rights therein (a "Sale"), then Parent shall cause to be paid to the Company
(in cash or in the form of the other consideration, if any, received by Parent
pursuant to the Sale), the amount by which: (i) the Proceeds of such Sale,
exceeds (ii) the Aggregate Cost Amount with respect to the Option or the Option
Shares (as the case may be) subject to such Sale. For purposes of this Section
4:
(i) The "Proceeds" of a Sale shall mean the aggregate amount of the
proceeds (in cash or in kind) paid to Parent or any of its affiliates pursuant
to such Sale (with any non-cash proceeds being valued at the fair market value
thereof).
(ii) The "Aggregate Cost Amount" with respect to the Option shall be
equal to the aggregate amount of all costs (including, without limitation,
brokers fees and commissions, filing fees, legal fees, accounting fees, any
amounts paid or payable by Parent under Section 16(b) of the Exchange Act and
any taxes) paid or payable as a result of the Sale by Parent of the Option. The
"Aggregate Cost Amount" with respect to any Option Share shall be equal to the
sum of (A) the aggregate dollar amount paid by Parent or its affiliate(s) for
such Option Shares, (B) the aggregate amount of all costs (including, without
limitation, brokers fees and commissions, filing fees, legal fees, accounting
fees, any amounts paid or payable by Parent under Section 16(b) of the Exchange
Act and any taxes) paid or payable as a result of the acquisition or Sale of
such Option Shares, and (C) interest at the rate of 7% per annum on the dollar
amount referred to in clause "(A)" of this sentence (for the period commencing
as of the date such Option Shares were acquired by Parent and ending on the date
of the Sale of such Option Shares).
(c) During the 180-day period commencing 270 days after the acquisition, if
any, by Parent of the Option Shares, the Company may (to the extent lawfully
permitted) elect to repurchase any or all of the Option Shares held by Parent or
any other Person at a price equal to the Aggregate Cost Amount with respect to
the Option Shares to be repurchased; provided, however, that such 180-day period
shall be extended to the extent necessary to allow any applicable governmental
notification period to expire or be terminated and any required governmental
approval to be obtained.
(d) Notwithstanding anything to the contrary contained in this Agreement, a
Sale shall not be deemed to have taken place in connection with any conversion
or exchange of the Option as contemplated by Section 4(b) hereof.
5. Listing. If Company Stock or any other securities to be acquired upon
exercise of the Option are then listed on any national securities exchange or
national securities quotation system, the Company, upon the request of Parent,
shall promptly file an application to list the shares of Company Stock or other
securities to be acquired upon exercise of the Option on such national
securities exchange or national securities quotation system and shall use
reasonable efforts to obtain approval of such listing as promptly as
practicable.
6. Registration Rights. The Company shall, if requested by Parent at any
time and from time to time within five years after the date of exercise of the
Option, as expeditiously as possible prepare and file up to two registration
statements under the Securities Act if such registration is necessary in order
to permit the sale or other orderly disposition of any or all securities that
have been acquired by exercise by Parent of the Option, in accordance with the
intended method of sale or other disposition stated by Parent, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision; and the Company shall use its reasonable efforts to qualify
such securities under any applicable state securities laws; provided, however,
that the Company shall not be required to qualify to do business in or consent
to general service of process in, any jurisdiction by reason of this sentence.
Parent agrees to use reasonable efforts to cause, and to cause any underwriters
of any sale or other disposition to cause, any sale or other disposition
pursuant to such registration statement to be effected on a widely distributed
basis. The Company shall use reasonable efforts to cause each such registration
statement to become effective, to obtain all consents or waivers of other
parties which are required therefor, and to keep such registration statement
effective for such period not in excess of 90 calendar days from the day such
registration statement first becomes effective as may be reasonably necessary
to effect such sale or other disposition. The obligations of the Company to file
a registration statement and to maintain its effectiveness may be suspended for
one or more periods of time not exceeding 60 calendar days in the aggregate (in
any 180 day period) with respect to any registration statement 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 adversely
affect the Company. In the event of any suspension of any registration
statement, the Company agrees that the period of time during which the Company
is obligated to maintain the effectiveness of such registration statement shall
be extended for a period of time equal to the period during which such
suspension was in place. Any registration statement prepared and filed under
this Section, and any sale covered thereby, shall be at the Company's expense
except for underwriting discounts or commission, brokers' fees and the fees and
disbursements of Parent's counsel related thereto. Parent shall provide all
information reasonably requested by the Company for inclusion in any
registration statement to be filed hereunder. If, during the time periods
referred to in the first sentence of this Section, the Company effects an
underwritten registration under the Securities Act of the Company's equity
securities for its own account or for any other of its stockholders (other than
on Form S-4 or Form S-8, or any successor form), it shall allow Parent the right
to participate in such registration; provided that, if the managing underwriters
of such offering advise the Company in writing that in their opinion the number
of securities requested to be included in such registration exceeds the number
which can be sold in such offering, priority shall be given to the securities
intended to be included therein by the Company for its own account and,
thereafter, the Company shall include the securities requested to be included
therein by Parent pro rata with the securities intended to be included therein
by other stockholders of the Company not having agreements giving them priority
in such registration. In connection with any registration pursuant to this
Section, Parent and the Company shall provide each other and any underwriter of
the offering with customary representations, warranties, covenants,
indemnification, and contribution in connection with such registration.
7. Miscellaneous.
(a) Fees and Expenses. Except as otherwise provided in the Merger
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by the party incurring such
expenses.
(b) Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO ITS
RULES OF CONFLICT OF LAWS.
(d) Notices. All notices or other communications under this Agreement
shall be in writing nd shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in Person, by cable, telegram, telex or other
standard form of telecommunications, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to the Company:
Scopus Technology, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
If to Parent:
Siebel Systems, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Vice President Legal Affairs
Fax: (000) 000-0000
With a copy to:
Xxxxxx Godward, LLP
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
(e) Assignment; Binding Effect. This Agreement and Parent's rights,
interests and obligations may by assigned by Parent (by operation of law or
otherwise) without the consent of any other Person. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(f) Further Assurances. In the event of any exercise of the Option by
Parent, the Company and Parent shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(g) ENFORCEMENT. 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
HAVING JURISDICTION, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY
ARE ENTITLED AT LAW OR IN EQUITY. EACH OF THE PARTIES HERETO (I) CONSENTS TO
SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE
STATE OF CALIFORNIA OR ANY CALIFORNIA STATE COURT IN THE EVENT ANY DISPUTE
ARISES OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, (II) AGREES THAT IT SHALL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL
JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (III)
AGREES THAT IT SHALL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN A
FEDERAL COURT SITTING IN THE STATE OF CALIFORNIA OR A CALIFORNIA STATE COURT.
(h) Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
IN WITNESS WHEREOF, the Company and Parent have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first written above.
Scopus Technology, Inc.
By:_______________________
Siebel Systems, Inc.
By:________________________
