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EXHIBIT 11
STOCK TENDER AND VOTING AGREEMENT
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of July
6, 1999 by and among Xxxxxxx X. Xxxx ("Stockholder"), Saturn Electronics &
Engineering, Inc., a Michigan corporation ("Saturn"), and SSI Acquisition Corp.,
a Delaware corporation and a wholly-owned subsidiary of Saturn ("Merger Sub").
RECITALS
A. Concurrently herewith Saturn, Merger Sub and Smartflex
Systems, Inc., a Delaware corporation ("Smartflex"), are entering into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
pursuant to which Merger Sub agrees to make a tender offer (the "Offer") for all
of the outstanding shares of common stock, $.0025 par value (the "Common Stock")
of Smartflex, at a price of $10.50 per share (the "Offer Price"), in cash,
following which Smartflex will be merged with and into Merger Sub, with
Smartflex as the Surviving Corporation (the "Merger").
B. Stockholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), as of the date hereof, 75,649 shares of Common Stock (the "Existing
Shares", together with any shares of Common Stock beneficial ownership of which
is acquired by Stockholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares").
C. As a condition to their willingness to enter into the Merger
Agreement, Saturn and Merger Sub have requested that Stockholder agree, and
Stockholder has agreed, to enter into this Agreement.
D. Saturn and Merger Sub have entered into the Merger Agreement
in reliance on Stockholder's representations, warranties, covenants and
agreement hereunder.
THEREFORE, the parties agree as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
1.1 Tender. Stockholder agrees to validly tender all Shares
beneficially owned by it pursuant to the Offer within ten business days
of commencement of the Offer, and not withdraw any such Shares, except
to the extent that the tender of shares (including Shares acquired
after the date hereof) pursuant to the Offer would subject Stockholder
to liability under Section 16(b) of the Exchange Act.
1.2 Voting. Stockholder hereby agrees that, during the time
this Agreement is in effect, at any meeting of the stockholders of
Smartflex, however called, and in any action by consent of the
stockholders of Smartflex, Stockholder will: (a) vote all Shares
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would
result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of Smartflex under or pursuant to the
Merger Agreement; (c) vote all Shares beneficially owned by it against
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any action or agreement that would impede, interfere with, delay,
postpone or attempt to discourage, the Merger or the Offer including,
but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but
not limited to, a merger, other business combination, reorganization,
consolidation, recapitalization, dissolution or liquidation involving
Smartflex, (ii) a sale or transfer of a material amount of assets of
Smartflex or any of its subsidiaries, (iii) any change in the board of
directors of Smartflex, (iv) any material change in the capitalization
of Smartflex, (v) any change in the charter, by-laws or other
organizational or constitutive documents of Smartflex, or (vi) any
other material change in the corporate structure or business of
Smartflex; and (d) without limiting the foregoing, consult with Saturn
and vote all Shares beneficially owned by it in such manner as is
determined by Saturn to be in compliance with the provisions of this
Section 1.2. Stockholder acknowledges receipt and review of a copy of
the Merger Agreement. Notwithstanding the foregoing, Stockholder may
take any action in his or her role as a director or officer of
Smartflex as permitted under Sections 6.04 and 8.01(e) of the Merger
Agreement. This Agreement is intended to bind Stockholder only with
respect to the specific matters set forth herein and shall not prohibit
the Stockholder from acting in accordance with his or her fiduciary
duties to Smartflex.
1.3. Irrevocable Proxy. Contemporaneously with the execution
of this Agreement: (i) Stockholder will deliver to Saturn a proxy in
the form attached hereto as Exhibit A, which will be irrevocable to the
fullest extent permitted by law (the "Proxy"), with respect to all
Shares owned of record by Stockholder; and (ii) Stockholder will cause
to be delivered to Saturn additional Proxies executed on behalf of each
record owner of any Shares owned beneficially (but not owned of record)
by Stockholder.
2. Representations and Warranties of Stockholder. Stockholder
represents and warrants to Saturn and Merger Sub as follows:
2.1 Ownership of Shares. On the date hereof the Existing
Shares are all of the Shares currently beneficially owned by Stockholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Stockholder. Stockholder does not have any rights to acquire any
additional shares of Common Stock other than pursuant to options issued under
the Stock Option Plans (as defined in the Merger Agreement), Stockholder
currently has with respect to the Existing Shares, and at Closing will have with
respect to the Shares, good, valid and marketable title, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable, Federal and State securities laws).
2.2 Power; Binding Agreement. Stockholder has the full legal
capacity, right, power and authority to enter into and perform all of
Stockholder's obligations under this Agreement. The execution and delivery of
this Agreement by Stockholder will not violate any agreement, contract or
arrangement to which Stockholder is a party or is bound, including, without
limitation, any voting agreement, stockholders agreement or voting trust. This
Agreement has been duly executed and delivered by Stockholder and constitutes a
legal, valid and binding agreement of Stockholder, enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the
consummation by Stockholder of the
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transactions contemplated hereby will (a) other than filings required under the
federal or state securities laws, require any consent or approval of or filing
with any Governmental or other regulatory body, or (b) constitute a violation
of, conflict with or constitute, a default under (i) any law, rule or regulation
applicable to Stockholder, or (ii) any order, judgment or decree by which
Stockholder is bound.
2.3. Finder's Fees. No person is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Saturn and Merger Sub.
Saturn and Merger Sub, jointly and severally, represent and warrant to
Stockholder as follows:
3.1 Authority. Each of Saturn and Merger Sub has full legal
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Saturn and
Merger Sub will not violate the charter, bylaws or other organizational or
constitutive documents of Saturn or Merger Sub, or any other agreement, contract
or arrangement to which Saturn or Merger Sub is a party or is bound. This
Agreement has been duly executed and delivered by each of Saturn and Merger Sub
and constitutes a legal, valid and binding agreement of Saturn and Merger Sub,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Saturn or Merger Sub of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Saturn or Merger Sub, or (ii) any order, judgment or decree to
which Saturn or Merger Sub is bound.
3.2. Finder's Fees. No person is, or will be, entitled to any
commission or finder's fee from Saturn or Merger Sub in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
Sections 5, 6 and 19 which will survive any termination of this Agreement), will
terminate on the earliest to occur of (a) the date on which Merger Sub accepts
for payment the Shares tendered in the Offer, so long as the Shares are so
tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) simultaneously with the termination of the Merger Agreement
in accordance with its terms.
5. Expenses. Except as provided in Section 19, each party hereto
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 will survive the
Closing hereunder.
6. Confidentiality. Stockholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Stockholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal
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counsel and advisors of Stockholder or Smartflex, if any) not a party to this
Agreement, without prior written consent of Saturn, except as provided herein or
in the Merger Agreement and except for filings required pursuant to the Exchange
Act, and the rules and regulations thereunder or disclosures Stockholder's legal
counsel advises in writing are necessary in order to fulfill Stockholder's
obligations imposed by law, in which event Stockholder will give prompt prior
notice of such disclosure to Saturn and cooperate with Saturn in obtaining a
protective order or in limiting such disclosure.
7. Certain Covenants of Stockholder.
7.1 Except in accordance with the provisions of this
Agreement, Stockholder agrees, while this Agreement is in effect, not to,
directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Saturn or Merger Sub) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in (other than pursuant to the exercise of options
outstanding on the date hereof), Smartflex or any subsidiary of Smartflex, or
any merger, consolidation, business combination, reorganization,
recapitalization or similar transaction involving Smartflex or any subsidiary of
Smartflex (each a "Competing Transaction"), or participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise, cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any person (other than
Saturn and Merger Sub) to do or seek any of the foregoing, Stockholder will
cease and cause to be terminated any existing activities, discussions or
negotiations by or on its behalf with any person (other than Saturn and Merger
Sub) conducted heretofore with respect to any Competing Transaction and will
promptly notify Saturn following receipt of any request by any person (other
than Saturn or Merger Sub) relating to any possible Competing Transaction or
information concerning Smartflex. Nothing contained herein will prohibit
Stockholder, solely in his capacity as an officer or as a member of the board of
directors of Smartflex (the "Board"), from furnishing information to, or
entering into discussions or negotiations with, any person (other than Saturn
and Merger Sub) in connection with an unsolicited proposal involving a
fully-financed (as represented by such person) Competing Transaction which is
made in writing by such person (other than Saturn and Merger Sub) and which, if
consummated, would provide consideration per share, of Common Stock to the
stockholders of Smartflex in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the advice of XX
Xxxxx Securities Corporation and the written advice of Xxxxxxxxx Xxxxx Xxxxxxx &
Xxxxx, that such action is required for the Board to comply with its fiduciary
duties to stockholders under Delaware law.
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7.2 Stockholder agrees, while this Agreement is in effect, to
notify Saturn promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Stockholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Stockholder will cause Smartflex to provide for each
certificate representing Shares beneficially owned by Stockholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE STOCK TENDER
AND VOTING AGREEMENT AND ARE SUBJECT TO THE IRREVOCABLE PROXY
REFERRED TO THEREIN, EACH DATED AS OF JULY 6, 1999, AS SUCH
AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF
WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Stockholder will cause Smartflex to
require the transfer agent for its Common Stock to make a notation in its
records prohibiting the transfer of any of the Shares, except in accordance with
the terms and conditions of this Agreement.
9. Survival of Representation and Warranties. Except as expressly
set forth herein, none of the representations, warranties, covenants and
agreements made by Stockholder, Saturn or Merger Sub in this Agreement will
survive the Closing hereunder.
10. Notices. All notices or other communication required or
permitted hereunder will be in writing, will be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and will be deemed duly given when
received, addressed as follows,
If to Saturn or Merger Sub:
Saturn Electronics & Engineering, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., President,
Chief Executive Officer and Chairman
of the Board
Facsimile: (000) 000-0000
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With copies to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
2290 First National Building
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to Stockholder:
Xxxxxxx X. Xxxx
00 Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
With copies to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
11. Entire Agreement; Amendment. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by the party against
whom such modification, amendment, alteration or supplement is sought to be
enforced.
12. Assigns. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned by any of the parties hereto
without the prior written consent of the other parties, except that Merger Sub
may assign any or all of its rights and obligations hereunder to Saturn or any
direct or indirect wholly-owned subsidiary of Saturn without the consent of
Stockholder or Company, but no such transfer will relieve Merger Sub of its
obligations under this Agreement if such subsidiary does not perform the
obligations of Merger Sub hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
expressly set forth below, this Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Stockholder, Merger Sub and Saturn hereby agrees that any
dispute arising out of this Agreement will be heard in the United States
District Court for the Central District of California and, in connection
therewith, each party to
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this Agreement hereby consents to the jurisdiction of such courts and agrees
that any service of process in connection with any dispute arising out of this
Agreement or the Merger may be given to any other party hereto by certified
mail, return receipt requested, at the respective addresses set forth in Section
10 above.
14. Injunctive Relief. The parties agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party will be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts (including by facsimile signature), each
of which will be deemed to be an original and all of which together will
constitute one and the same document.
16. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision will be interpreted
to be only so broad as is enforceable.
17. Further Assurances. Each party hereto will execute and deliver
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, will be construed to give any person other than the
parties hereto any legal or equitable right, remedy or claim under or by reason
of this Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding will be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this Section
19 will survive the Closing hereunder.
20. Amendment and Modification. This Agreement may be amended,
modified and supplemented only by a written document executed by Saturn, Merger
Sub and Stockholder.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Saturn and Merger Sub have caused this Agreement to
be executed by their duly authorized officers, and Stockholder has duly executed
this Agreement, as of the date and year first above written.
"SATURN"
SATURN ELECTRONICS &
ENGINEERING, INC.
By: /s/ X. Xxxxx
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Name: Xxxxxxx X. Xxxxx, Xx.
Its: President,
Chief Executive Officer and
Chairman of the Board
"MERGER SUB"
SSI ACQUISITION CORP.
By: /s/ X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Its: President
"STOCKHOLDER"
/s/ Xxxxxxx X. Xxxx
------------------------------------------
Name: Xxxxxxx X. Xxxx
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EXHIBIT A
Form Of Irrevocable Proxy
The undersigned stockholder of Smartflex Systems, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Xxxxxxx X. Xxxxx, Xx., Xxxxxx Xxxxxxx and
Saturn Electronics & Engineering, Inc. ("Saturn"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
(i) the issued and outstanding shares of capital stock of Smartflex owned of
record by the undersigned as of the date of this proxy, which shares are
specified on the final page of this proxy and (ii) any and all other shares of
capital stock of Smartflex which the undersigned may acquire after the date
hereof (the shares of the capital stock of Smartflex referred to in (clauses (i)
and (ii) of the immediately preceding sentence are collectively referred to as
the "Shares"). Upon the execution hereof all prior proxies given by the
undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, among Saturn, SSI Acquisition Corp. and the undersigned (the "Stock
Tender Agreement"), and is granted in consideration of Saturn entering into the
Agreement and Plan of Merger, dated as of the date hereof, among Saturn, SSI
Acquisition Corp. and Smartflex (the "Merger Agreement"). Capitalized terms used
but not otherwise defined in this proxy have the meanings ascribed to such terms
in the Merger Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the stockholders of Smartflex,
however called, or in any written action by consent of stockholders of
Smartflex: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of Smartflex under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone, or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Smartflex, (ii) a sale or
transfer of a material amount of assets of Smartflex or any of its subsidiaries,
(iii) any change in the board of directors of Smartflex, (iv) any material
change in the capitalization of Smartflex, (v) any change in the charter,
by-laws or other organizational or constitutive documents of Smartflex, or (v)
any other material change in the corporate structure or business of Smartflex.
This proxy will be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
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Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction will, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision will be interpreted to be only so broad as is
enforceable.
This proxy will terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: July 6, 1999
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Name: Xxxxxxx X. Xxxx
Number of shares of Common Stock owned of record as of the date of this proxy:
50,399
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