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EXHIBIT 10(p)
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of July 25, 1999 (the "STOCK
OPTION AGREEMENT"), between Texas Instruments Incorporated, a Delaware
corporation ("PARENT"), and Unitrode Corporation, a Maryland corporation (the
"COMPANY").
WHEREAS, Parent, Unicorn Acquisition Corp., a Maryland
corporation and a wholly owned subsidiary of Parent ("MERGER SUB"), and the
Company are parties to that certain Agreement and Plan of Merger, dated as of
the date hereof (the "MERGER AGREEMENT"), which provides, among other things,
that Merger Sub, on the terms and subject to the conditions thereof, will merge
with and into the Company with the Company surviving as a wholly owned
subsidiary of Parent;
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent has requested that the Company grant to Parent an
option to purchase up to 6,470,760 shares of common stock, par value $0.01 per
share ("COMMON STOCK") of the Company, upon the terms and subject to the
conditions hereof; and
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WHEREAS, in order to induce Parent to enter into the Merger
Agreement, the Company is willing to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. The Option; Exercise; Adjustments.
(a) Subject to the other terms and conditions set forth
herein, the Company hereby grants to Parent an irrevocable option (the "OPTION")
to purchase up to 6,470,760 shares of Common Stock (the "SHARES"). The purchase
price per Share (the "PURCHASE PRICE") shall be $38.60. The Purchase Price and
the number of Shares shall be subject to adjustment as provided in Section 1(c)
hereof.
(b) Parent may exercise the Option with respect to any
or all of the Option Shares at any one time or from time to time, subject to the
provisions of Section 1(c) hereof, upon the occurrence of an Exercise Event (as
defined below). Subject to the last sentence of this Section 1(b), the Option
will terminate and be of no further force and effect upon the earliest to occur
of (i) the Effective Time (as defined in the Merger Agreement), (ii) 120 days
after the first occurrence of an Exercise Event, and (iii) the termination of
the Merger Agreement in accordance with its terms so long as, in the case of
this clause (iii), no Exercise Event has occurred or could still occur under
Section 8.5(b) of the Merger Agreement, in which case the Option will terminate
on the later of (x) 120 days following the time such termination fee becomes
unconditionally payable and (y) the expiration of the period in which an
Exercise Event could occur pursuant to Section 8.5(b) of the Merger Agreement.
"Exercise Event" means any event as a result of which Parent is unconditionally
entitled to receive a termination fee pursuant to Section 8.5(b) of the Merger
Agreement. Notwithstanding the termination of the Option, Parent shall be
entitled to purchase the Shares with respect to which it has exercised the
Option in accordance with the terms hereof prior to the termination of the
Option.
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(c) In the event Parent is entitled to and wishes to
exercise the Option, the Parent shall send a written notice to the Company (the
"STOCK EXERCISE NOTICE") specifying a date (subject to the HSR Act (as defined
below)) not later than 20 business days and not earlier than three business days
following the date such notice is given for the closing of such purchase and
specifying the number of Shares Parent wishes to purchase. In the event of any
change in the number of issued and outstanding shares of Common Stock by reason
of any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Shares subject to this Option and the purchase price per Share shall be
appropriately adjusted to restore the Parent to its rights hereunder, including
its right to purchase Shares representing approximately 19.9% of the capital
stock or securities convertible or otherwise exchangeable for capital stock of
the Company entitled to vote generally for the election of the directors of the
Company that are issued and outstanding immediately prior to the exercise of the
Option at an aggregate purchase price equal to the Purchase Price multiplied by
6,470,760.
(d) At any time the Option is then exercisable pursuant
to the terms of Section 1(b) hereof, Parent may elect, in lieu of exercising the
Option to purchase Shares provided in Section 1(a) hereof, to send a written
notice to the Company (the "CASH EXERCISE NOTICE") specifying a date not later
than 20 business days and not earlier than 10 business days following the date
such notice is given on which date the Company shall pay to Parent an amount in
cash equal to the Spread (as hereinafter defined) multiplied by all or such
portion of the Shares subject to the Option as Parent shall specify in such Cash
Exercise Notice. As used herein "SPREAD" shall mean the excess, if any, over the
Purchase Price of the higher of (i) if applicable, the highest price per share
of Common Stock (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid or proposed to be paid by any person pursuant to
a definitive agreement executed by the Company with respect to an Acquisition
Proposal (the "ALTERNATIVE PURCHASE PRICE") or (ii) the average closing price,
for the five trading days ending on the trading day immediately preceding the
date of the Cash Exercise Notice, per share of Common Stock as reported on the
New York Stock Exchange (the "CLOSING PRICE"). If the Alternative Purchase Price
includes any property other than cash, the Alternative Purchase Price shall be
the sum of (i) the fixed cash amount, if any, included in the Alternative
Purchase Price plus (ii) the fair market value of such other property. If such
other property consists of securities with an existing public trading market,
the average of the closing prices (or the average of the closing bid and asked
prices if closing prices are unavailable) for such securities in their principal
public trading market on the five trading days ending on the trading day
immediately preceding the date of the Cash Exercise Notice shall be deemed to
equal the fair market value of such property. If such other property consists of
something other than cash or securities with an existing public trading market
and, as of the payment date for the Spread, agreement on the value of such other
property has not been reached between the parties hereto, the Alternative
Purchase Price shall be deemed to equal the Closing Price. Upon exercise of its
right to receive cash pursuant to the exercise of the Option, the obligations of
the Company to deliver Shares pursuant to Section 3 shall be terminated with
respect to such number of Shares for which Parent shall have elected to be paid
the Spread.
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2. Conditions to Delivery of Shares. The Company's obligation
to deliver Shares upon exercise of the Option is subject only to the conditions
that:
(i) No preliminary or permanent injunction or other
order issued by any federal or state court of competent jurisdiction in the
United States prohibiting the delivery of the Shares shall be in effect; and
(ii) Any applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX XXX") shall have
expired or been terminated; and
(iii) All consents, approvals, orders, notifications,
filings or authorizations, the failure of which to make or obtain would have the
effect of making the issuance of Shares to Parent illegal ("OTHER REQUISITE
CONSENTS"), shall have been made or obtained.
3. The Closing.
(a) Any closing hereunder shall take place on the date
specified by Parent in its Stock Exercise Notice or Cash Exercise Notice, as the
case may be, at such reasonable time and place as may be indicated in the Stock
Exercise Notice or the Cash Exercise Notice, as applicable, or at the election
of the Company at 10:00 A.M., local time, at the offices of Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, or, if the conditions
set forth in Section 2(i), 2(ii) or 2(iii) have not then been satisfied, on the
second business day following the satisfaction of such conditions, or at such
other time and place as the parties hereto may agree (the "CLOSING DATE"). On
the Closing Date, (i) in the event of a closing pursuant to Section 1(c) hereof,
the Company will deliver to Parent a certificate or certificates, duly endorsed
(or accompanied by duly executed stock powers), representing the Shares in the
denominations designated by Parent in its Stock Exercise Notice and Parent will
purchase such Shares from the Company at a cash price per Share equal to the
Purchase Price or (ii) in the event of a closing pursuant to Section 1(d)
hereof, the Company will deliver to Parent cash in an amount determined pursuant
to Section 1(d) hereof. Any payment made by Parent to the Company, or by the
Company to Parent, pursuant to this Stock Option Agreement shall be made by wire
transfer of immediately available funds to a bank designated by the party
receiving such funds.
(b) The certificates representing the Shares may bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT").
4. Representations and Warranties of the Company. The Company
represents and warrants to Parent that (a) the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland and has the requisite corporate power and authority to enter into and
perform this Stock Option Agreement; (b) the execution and delivery of this
Stock Option Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been
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duly authorized by the Board of Directors of the Company and this Stock Option
Agreement has been duly and validly executed and delivered by a duly authorized
officer of the Company and will constitute a valid and binding obligation of the
Company subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; (c) the Company has taken
all necessary corporate action to authorize and reserve the Shares issuable upon
exercise of the Option and the Shares, when issued and delivered by the Company
upon exercise of the Option, will be duly authorized, validly issued, fully paid
and non-assessable and free of preemptive rights; (d) except as otherwise
required by the HSR Act or for the Other Requisite Consents, the execution and
delivery of this Stock Option Agreement by the Company and the consummation by
it of the transactions contemplated hereby do not require the consent, waiver,
approval or authorization of or any filing with any person or public authority
and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of any charter or
bylaw, indenture, mortgage, lien, lease, agreement, contract, instrument, order,
law, rule, regulation, judgment, ordinance, or decree, or restriction by which
the Company or any of its subsidiaries or any of their respective properties or
assets is bound, except where the failure to obtain such consent, waiver,
approval or authorization or make such filing, or where such breach,
acceleration or default, is not reasonably expected to have a Material Adverse
Effect (as defined in the Merger Agreement) on the Company and its subsidiaries
taken as a whole or on the ability of the Company to consummate the transactions
contemplated hereby; and (e) no "fair price", "moratorium", "control share
acquisition", "interested stockholder" or other form of antitakeover statute or
regulation (including, without limitation, Subtitle 6 (Sections 3-601 through
3-603) and Subtitle 7 (Sections 3-701 through 3-709) of the Corporation Law of
the State of Maryland) is applicable to the acquisition of Shares pursuant to
this Stock Option Agreement.
5. Representations and Warranties of the Parent. Parent
represents and warrants to the Company that (a) Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to enter into and
perform this Stock Option Agreement; (b) the execution and delivery of this
Stock Option Agreement by Parent and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent and this Stock Option Agreement has been duly and validly
executed and delivered by a duly authorized officer of Parent and will
constitute a valid and binding obligation of Parent enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and (c) Parent
is acquiring the Option and, if and when it exercises the Option, will be
acquiring the Shares issuable upon the exercise thereof for its own account and
not with a view to distribution or resale in any manner which would be in
violation of the Securities Act.
6. Listing of Shares; HSR Act Filings; Governmental Consents.
Subject to applicable law and the rules and regulations of the New York Stock
Exchange (or any other national securities exchange or quotation system on which
the Common Stock is
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then listed) (as applicable, the "STOCK Exchange"), when the Option becomes
exercisable hereunder, the Company will promptly file an application to list the
Shares on the Stock Exchange and will use all reasonable efforts to effect all
necessary filings by the Company under the HSR Act. Each of the parties hereto
will use all reasonable efforts to obtain consents of all third parties and
governmental authorities (including any Other Requisite Consents), if any,
necessary to the consummation of the transactions contemplated hereby.
7. Registration Rights.
(a) In the event that Parent shall desire to sell any of
the Shares within two years after the purchase of such Shares pursuant hereto,
and such sale requires, in the opinion of counsel to Parent, which opinion shall
be reasonably satisfactory to the Company and its counsel, registration of such
Shares under the Securities Act, the Company will cooperate with Parent and any
underwriters in registering such Shares for resale, including, without
limitation, promptly filing a registration statement which complies with the
requirements of applicable federal and state securities laws, entering into an
underwriting agreement with such underwriters upon such terms and conditions as
are customarily contained in underwriting agreements with respect to secondary
distributions; provided that the Company shall not be required to have declared
effective more than two registration statements hereunder and shall be entitled
to delay the filing or effectiveness of any registration statement for up to 120
days if the offering would, in the good faith judgment of the Board of Directors
of the Company, require premature disclosure of any material corporate
development or otherwise interfere with or adversely affect any pending or
proposed offering of securities of the Company or any other material transaction
involving the Company. Parent shall use its reasonable efforts to cause, and to
cause any underwriters of any sale or disposition to cause, any sale or
disposition pursuant to such registration statement to be effected on a widely
disseminated basis so that upon consummation thereof no purchaser or transferee
will own beneficially more than 5.0% of the then outstanding voting power of the
Company.
(b) If the Common Stock is registered pursuant to the
provisions of this Section 7, the Company agrees (i) to furnish copies of the
registration statement and the prospectus relating to the Shares covered thereby
in such numbers as Parent may from time to time reasonably request and (ii) if
any event shall occur as a result of which it becomes necessary to amend or
supplement any registration statement or prospectus, to prepare and file under
the applicable securities laws such amendments and supplements as may be
necessary to keep available for at least 90 days a prospectus covering the
Common Stock meeting the requirements of such securities laws, and to furnish
Parent such numbers of copies of the registration statement and prospectus as
amended or supplemented as may reasonably be requested. Parent will provide
information reasonably requested by the Company for inclusion in any
registration statement to be filed pursuant to this Section 7. The Company shall
bear the cost of the registration, including, but not limited to, all
registration and filing fees, printing expenses, and fees and disbursements of
counsel and accountants for the Company, except that Parent shall pay the fees
and disbursements of its counsel, and the underwriting fees and selling
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commissions applicable to the shares of Common Stock sold by Parent. In
connection with any registration pursuant to this Section 7, Parent and the
Company shall provide each other and each underwriter of the offering with
customary representations, warranties and covenants, including indemnification
and contribution. If a requested registration pursuant to this Section 7
involves an underwritten offering, the underwriter or underwriters thereof shall
be a nationally recognized firm or firms selected by the Company, which firm or
firms shall be reasonably satisfactory to Parent.
8. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Stock Option Agreement.
9. Specific Performance. The Company acknowledges that if the
Company fails to perform any of its obligations under this Stock Option
Agreement immediate and irreparable harm or injury would be caused to Parent for
which money damages would not be an adequate remedy. In such event, the Company
agrees that Parent shall have the right, in addition to any other rights it may
have, to specific performance of this Stock Option Agreement. Accordingly, if
Parent should institute an action or proceeding seeking specific enforcement of
the provisions hereof, the Company hereby waives the claim or defense that
Parent has an adequate remedy at law and hereby agrees not to assert in any such
action or proceeding the claim or defense that such a remedy at law exists. The
Company further agrees to waive any requirements for the securing or posting of
any bond in connection with obtaining any such equitable relief.
10. Profit Limitation.
(a) Notwithstanding any other provision of this Stock
Option Agreement, in no event shall Parent's Total Profit (as hereinafter
defined) exceed $55,600,000 and, if it otherwise would exceed such amount,
Parent, at its sole election, shall either (a) deliver to the Company for
cancellation Shares previously purchased by Parent, (b) pay cash to the Company
or (c) undertake any combination thereof, so that Parent's Total Profit shall
not exceed $55,600,000 after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Stock
Option Agreement, this Option may not be exercised for a number of Shares as
would, as of the date of the Stock Exercise Notice, result in a Notional Total
Profit (as defined below) of more than $55,600,000 and, if exercise of the
Option otherwise would exceed such amount, Parent, at its discretion, may
increase the Purchase Price for that number of Shares set forth in the Stock
Exercise Notice so that the Notional Total Profit shall not exceed $55,600,000;
provided, that nothing in this sentence shall restrict any exercise of the
Option permitted hereby on any subsequent date at the Purchase Price set forth
in Section 1(a) hereof.
(c) As used herein, the term "TOTAL PROFIT" shall mean
the aggregate amount (before taxes) of the following: (i) the amount of cash
received by Parent pursuant to Section 1(d), (ii) (x) the cash amounts or the
fair market value of any property received by Parent pursuant to the sale of
Shares (or any other securities into
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which such Shares are converted or exchanged), less (y) Parent's Purchase Price
for such Shares, and (iii) any fees received pursuant to Section 8.5(b) of the
Merger Agreement.
(d) As used herein, the term "NOTIONAL TOTAL PROFIT"
with respect to any number of Shares as to which Parent may propose to exercise
this Option shall be the Total Profit determined as of the date of the Stock
Exercise Notice assuming that this Option were exercised on such date for such
number of Shares and assuming that such Shares, together with all other Shares
held by Parent and its affiliates as of such date, were sold for cash at the
closing market price for the Common Stock as of the close of business on the
preceding trading day (less customary brokerage commissions).
11. Transfers. The Shares may not be sold, assigned,
transferred, or otherwise disposed of except (i) in an underwritten public
offering as provided in Section 7 hereof or (ii) to any purchaser or transferee
who, to Parent's knowledge, would immediately following such sale, assignment,
transfer or disposal, beneficially own more than 5.0% of the then outstanding
voting power of the Company; provided, however, that Parent shall be permitted
to sell any Shares if such sale is made pursuant to a tender or exchange offer.
12. Notice. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
fully given if (i) delivered personally; (ii) sent by certified or registered
mail, return receipt requested; (iii) sent by overnight courier for delivery on
the next business day; or (iv) sent by confirmed facsimile, provided that a hard
copy of all such materials is thereafter sent within 24 hours in the manner
described in clauses (i), (ii) or (iii), to the parties at the following
addresses or at such other addresses as shall be specified by the parties by
like notice:
If to Parent:
Texas Instruments Incorporated
0000 Xxxxxxxxx Xxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
X.X. Xxx 000000, X/X 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With copies to:
Texas Instruments Incorporated
0000 Xxxxxx Xxxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
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P.O. Box 660199, M/S 8658
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
If to the Company:
Unitrode Corporation
0 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Notices provided in accordance with this Section 12 shall be
deemed delivered (i) on the date of personal delivery, (ii) four business days
after deposit in the mail, (ii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the facsimile transmission, as
the case may be.
13. Parties in Interest. This Stock Option Agreement shall
inure to the benefit of and be binding upon the parties named herein and their
respective successors and permitted assigns; provided, however, that such
successor in interest or permitted assigns shall agree to be bound by the
provisions of this Stock Option Agreement. Nothing in this Stock Option
Agreement, express or implied, is intended to confer upon any person other than
the Company or Parent, or their successors or assigns, any rights or remedies
under or by reason of this Stock Option Agreement.
14. Entire Agreement; Amendments. This Stock Option Agreement,
together with the Merger Agreement and the other documents referred to therein,
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings, oral or written, with respect to such transactions. This
Stock Option Agreement may not be changed, amended or modified orally, but may
be changed only by an agreement in
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writing signed by the party against whom any waiver, change, amendment,
modification or discharge may be sought.
15. Assignment. No party to this Stock Option Agreement may
assign any of its rights or obligations under this Stock Option Agreement
without the prior written consent of the other party hereto.
16. Headings. The section headings herein are for convenience
only and shall not affect the construction of this Stock Option Agreement.
17. Counterparts. This Stock Option Agreement may be executed
in any number of counterparts, each of which, when executed, shall be deemed to
be an original and all of which together shall constitute one and the same
document.
18. Governing Law. This Stock Option Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland,
without giving effect to the choice of law principles thereof.
19. Severability. If any term, provision, covenant or
restriction of this Stock Option Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Stock Option Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
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IN WITNESS WHEREOF, the Parent and the Company have caused
this Stock Option Agreement to be duly executed and delivered on the day and
year first above written.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
UNITRODE CORPORATION
By: /s/ XXXXXX X. XXXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman of the Board and Chief
Executive Officer
