EXHIBIT 99.02
OPTION AGREEMENT
THIS OPTION AGREEMENT is entered into as of November 2, 1996 by and between
CADENCE DESIGN SYSTEMS, INC., a Delaware corporation ("Parent"), and XXXX X.
XXXXXX ("Stockholder").
RECITALS
A. Parent, Wyoming Acquisition Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and Xxxxxx & Chyan Technology,
Inc., a Delaware corporation (the "Company"), have entered into an Agreement and
Plan of Merger and Reorganization dated as of October 28, 1996 (as amended from
time to time, the "Reorganization Agreement"; capitalized terms used but not
otherwise defined in this Option Agreement have the meanings assigned to such
terms in the Reorganization Agreement), which provides (subject to the
conditions set forth therein) for the merger of Merger Sub into the Company (the
"Merger").
B. As of the date hereof, Stockholder owns in aggregate (including shares
held both beneficially and of record and other shares held either beneficially
or of record) the number of shares of Company Common Stock set forth below
Stockholder's name on the signature page hereof (all such shares together with
any other shares of capital stock of the Company acquired after the date hereof
by Stockholder being referred to herein as the "Subject Shares").
AGREEMENT
The parties to this Option Agreement, intending to be legally bound, agree
as follows:
SECTION 1. GRANT OF OPTION AND EXERCISE
1.1 GRANT OF OPTION. Stockholder hereby grants to Parent an irrevocable
option (the "Option") to purchase, on the terms and subject to the provisions
set forth herein, any or all of the Subject Shares at a price per Subject Share
equal to $32.30 (the "Purchase Price"). The Purchase Price shall be
appropriately adjusted if, between the date of this Option Agreement and any
Closing Date (as defined in Section 1.3), the outstanding shares of Company
Common Stock are changed into a different number or class of shares by reason of
any stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction.
1.2 EXERCISE OF OPTION.
(a) Parent may exercise the Option with respect to any or all of the
Subject Shares at any time or from time to time following the occurrence of a
Purchase Event (as defined in Section 1.2(b)) and on or prior to the Termination
Date (as defined in Section 1.2(c)). Parent's right to purchase Subject Shares
with respect to which it has exercised the Option shall not terminate on the
Termination Date; accordingly, if Parent exercises the Option with respect to
any Subject Shares on or prior to the Termination Date, then Parent shall be
entitled to purchase such Subject Shares after the Termination Date.
(b) For purposes of this Option Agreement, a "Purchase Event" shall
be deemed to have occurred if an Identified Termination occurs. For purposes of
this Option Agreement, an "Identified Termination" shall occur if:
(i) the Reorganization Agreement is validly terminated by Parent
or the Company pursuant to Section 8.1(d) of the Reorganization
Agreement at any time after (A) an Acquisition Proposal has been made,
submitted or announced (provided such Acquisition Proposal was not
"publicly withdrawn" prior to the Company Stockholders' Meeting) or
(B) the occurrence of a Triggering Event (provided, if such Triggering
Event is the result of an Acquisition Proposal, such Acquisition
Proposal was not "publicly withdrawn" prior to the Company
Stockholders' Meeting); or
(ii) the Reorganization Agreement is validly terminated by Parent
pursuant to Section 8.1(e) of the Reorganization Agreement.
For purposes of this Option Agreement, an Acquisition Proposal shall be deemed
to have been "publicly withdrawn" only if (1) the Person who made such
Acquisition Proposal publicly announces the withdrawal of such Acquisition
Proposal and (2) there shall not have been any public announcement, or any
direct or indirect communication to any of the stockholders of the Company,
stating or suggesting the possibility that such Acquisition Proposal might be
resubmitted or that such Person or any of such Person's affiliates might make,
submit or announce any other Acquisition Proposal.
(c) For purposes of this Agreement, "Termination Date" shall mean the
earliest of the following:
(i) the date upon which the Merger becomes effective;
(ii) the date 180 days after the date upon which a Purchase Event
occurs; or
(iii) the date upon which the Reorganization Agreement is validly
terminated other than by virtue of an Identified Termination;
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PROVIDED, HOWEVER, that, if the Option cannot be exercised prior to the end of
such 180-day period by reason of any applicable judgment, decree, order, Legal
Requirement or other legal impediment, then the Termination Date shall be
extended until the date 30 days after the date on which such impediment is
removed (but in no event shall the Termination Date be extended to a date more
than 180 days after the end of such 180-day period).
1.3 CLOSINGS. Whenever Parent wishes to exercise the Option with respect
to any Subject Shares, Parent shall deliver to Stockholder a written notice (the
date of which being herein referred to as the "Notice Date") specifying (a) the
place at which such Subject Shares are to be purchased, (b) the number of
Subject Shares to be purchased (the "Exercised Shares") and (c) the date on
which such Exercised Shares are to be purchased, which shall not be earlier than
three business days nor later than ten business days after the Notice Date. The
closing of the purchase of such Exercised Shares (a "Closing") shall occur at
the place specified in such written notice and on the date specified in such
written notice (the "Closing Date"); PROVIDED, HOWEVER, that: (i) if such
purchase cannot be consummated by reason of any applicable judgment, decree,
order, Legal Requirement or other legal impediment, such Closing Date may be
extended by Parent to a date not more than 30 days after the date on which such
impediment is removed; and (ii) if prior notification to or approval of any
Governmental Body is required in connection with such purchase, Stockholder
shall promptly cause to be filed, and shall expeditiously process, the required
notice or application for approval (and Stockholder shall cooperate with Parent
in the filing of any such notice or application required to be filed by Parent
and the obtaining of any such approval required to be obtained by Parent), and
such Closing Date may be extended by Parent to a date not more than 30 days
after the later of (A) the date on which any required notification or waiting
period has expired or been validly terminated or (B) the date on which any
required approval has been obtained (but in no event shall the Termination Date
be extended to a date more than 180 days after the original date for closing
specified in the written notice of Parent for the purchase of such Exercised
Shares).
1.4 PAYMENT AND DELIVERY OF CERTIFICATES. On a Closing Date, (i) Parent
will deliver to Stockholder the aggregate Purchase Price then payable for the
Exercised Shares in cash (by wire transfer of immediately available funds to a
bank account designated by Stockholder or by certified check) and (ii)
Stockholder shall deliver to Parent certificates representing such Exercised
Shares, duly endorsed in blank or accompanied by stock powers duly executed by
Stockholder in blank, in proper form for transfer, with appropriate signature
guarantees.
1.5 DISTRIBUTIONS. Any dividends or other distributions (whether payable
in cash, stock or otherwise) by the Company with respect to Exercised Shares
with a record date on or after a Notice Date therefor will belong to Parent. If
any such dividend or distribution belonging to Parent is paid by the Company to
Stockholder, Stockholder shall hold such dividend or distribution in trust for
the benefit of Parent and shall promptly remit such dividend or distribution to
Parent in exactly the form received, accompanied by appropriate instruments of
transfer.
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SECTION 2. TRANSFER OF SUBJECT SHARES
2.1 NO DISPOSITION OR ENCUMBRANCE OF SUBJECT SHARES. Stockholder hereby
covenants and agrees that, on or prior to the Termination Date, Stockholder will
not, directly or indirectly, (a) offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose of or transfer (or
announce any offer, sale, offer of sale, contract of sale or grant of any option
to purchase or other disposition or transfer of) any of the Subject Shares to
any Person other than Parent, (b) create or permit to exist any Encumbrance on
any of the Subject Shares or (c) reduce his beneficial ownership of, interest in
or risk relating to any of the Subject Shares; PROVIDED, HOWEVER, that
Stockholder may transfer (free of the restrictions on transfer set forth in this
Section 2.1) without consideration, by way of gift to members of Stockholder's
immediate family and to organizations qualified under Section 501(c)(3) of the
Internal Revenue Code of 1986, up to 100,000 shares of Company Common Stock in
the aggregate. The foregoing number of shares shall be appropriately adjusted
if, between the date of this Option Agreement and the Expiration Date, the
outstanding shares of Company Common Stock are changed into a different number
or class of shares by reason of any stock split, stock dividend, reverse stock
split, reclassification, recapitalization or other similar transaction.
2.2 TRANSFER OF VOTING RIGHTS. Stockholder covenants and agrees that, on
or prior to the Termination Date, Stockholder will not deposit any of the
Subject Shares into a voting trust or grant a proxy or enter into a voting
agreement with respect to any of the Subject Shares.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to Parent as follows:
3.1 DUE AUTHORIZATION. Stockholder has all requisite power and capacity
to execute and deliver this Option Agreement, to grant the Option and to perform
his obligations hereunder. This Option Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding obligation
of Stockholder, enforceable against Stockholder in accordance with its terms,
subject to (i) the laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.2 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Option Agreement by
Stockholder do not, and the performance of this Option Agreement by Stockholder
will not: (i) conflict with or violate any order, decree or judgment applicable
to Stockholder or by which he or any of his properties is bound or affected; or
(ii) result in any breach of or constitute a default (with notice or lapse of
time, or both) under, or result in the creation of an Encumbrance on any of the
Subject Shares pursuant to, any Contract to which Stockholder is a party or by
which Stockholder or any of his properties is bound or affected.
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(b) The execution and delivery of this Option Agreement by
Stockholder do not, and the performance of this Option Agreement by Stockholder
will not, require any Consent of any Person.
3.3 TITLE TO SUBJECT SHARES. Stockholder owns of record and beneficially
the Subject Shares set forth under Stockholder's name on the signature page
hereof and does not directly or indirectly own, either beneficially or of
record, any shares of capital stock of the Company, or rights to acquire any
shares of capital stock of the Company, other than the Subject Shares set forth
below Stockholder's name on the signature page hereof. Stockholder has good and
marketable title to the Subject Shares free and clear of any Encumbrance, and
the transfer by Stockholder of any Exercised Shares hereunder will pass good and
marketable title to such Exercised Shares free and clear of any Encumbrance.
3.4 NO BROKERS. Except for Alex. Xxxxx & Sons Incorporated, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Option
Agreement based upon arrangements made by or on behalf of Stockholder.
3.5 ACCURACY OF REPRESENTATIONS. The representations and warranties of
Stockholder contained in this Option Agreement are accurate in all respects as
of the date of this Option Agreement, will be accurate in all respects at all
times through each Closing Date and will be accurate in all respects as of each
Closing Date as if made on that date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Stockholder as follows:
4.1 DUE AUTHORIZATION. Parent has all requisite power and authority to
perform its obligations under this Option Agreement, and the execution, delivery
and performance by Parent of this Option Agreement have been duly authorized by
all necessary action on the part of Parent and its board of directors. This
Option Agreement constitutes the legal, valid and binding obligation of Parent,
enforceable against it in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
4.2 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Option Agreement by Parent do
not, and the performance of this Option Agreement by Parent will not: (i)
conflict with or violate any order, decree or judgment applicable to Parent or
by which it or any of its properties is bound or affected; or (ii) subject to
receipt by Parent of all Consents necessary to perform its obligations upon an
exercise of the Option, result in any breach of or constitute a default (with
notice or lapse of time, or both) under, any Contract to which such Parent is a
party or by which Parent or any of its properties is bound or affected.
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(b) The execution and delivery of this Option Agreement by Parent do
not require any Consent of any Person.
4.3 ACCURACY OF REPRESENTATIONS. The representations and warranties of
Parent contained in this Option Agreement are accurate in all respects as of the
date of this Option Agreement, will be accurate in all respects at all times
through each Closing Date and will be accurate in all respects as of each
Closing Date as if made on that date.
SECTION 5. CERTAIN COVENANTS
5.1 FURTHER ASSURANCES. If Parent shall exercise the Option in accordance
with the terms of this Option Agreement, from time to time and without
additional consideration, Stockholder will execute and deliver, or cause to be
executed and delivered, such additional or further transfers, assignments,
endorsements, consents and other instruments as Parent may reasonably request
for the purpose of effectively carrying out and furthering the intent of this
Option Agreement, including the transfer of Exercised Shares to Parent and the
release of any and all Encumbrances with respect thereto.
5.2 LEGENDS. Immediately after the execution of this Option Agreement,
Stockholder shall instruct the Company to cause each certificate of Stockholder
evidencing the Subject Shares 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 OPTION AGREEMENT
DATED AS OF NOVEMBER 2, 1996, AS IT MAY BE AMENDED, BETWEEN THE
ISSUER AND THE REGISTERED HOLDER OF THIS CERTIFICATE, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
5.3 NO EXERCISE OF APPRAISAL RIGHTS. If (a) Parent purchases any
Exercised Shares pursuant to the Option, (b) the Board of Directors of the
Company recommends to the stockholders of the Company that they vote in favor of
an Acquisition Proposal for a merger of the Company that is to be accounted for
as a "pooling of interests," (c) such merger is voted upon by the Company's
stockholders within 180 days after Parent's purchase of such Exercised Shares
and (d) the recommendation of the Board of Directors of the Company in favor of
such merger has not been withdrawn and remains in effect as of the time of the
vote by the Company's stockholders upon such merger, then Parent shall not
exercise any statutory appraisal rights with respect to such Exercised Shares in
connection with such merger. Nothing contained in this Section 5.3 or elsewhere
in this Option Agreement shall require Parent to vote any shares of Company
Common Stock in favor of any such merger, and nothing in this Section 5.3 or
elsewhere in this Option Agreement shall preclude Parent from voting any shares
of Company Common Stock against such merger.
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SECTION 6. MISCELLANEOUS
6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and obligations of Stockholder and Parent
in this Option Agreement shall survive (i) the Merger, (ii) any termination of
the Reorganization Agreement and (iii) any Closing Date.
6.2 INDEMNIFICATION.
(a) Each party hereto shall hold harmless and indemnify the other
party hereto from and against any Damages (regardless of whether or not such
Damages relate to a third-party claim) which are incurred by such other party
and that arise from any breach of any representation, warranty, covenant or
obligation of such party contained herein.
(b) If the Merger is consummated, then, from and after the Effective
Time, Parent shall, to the fullest extent permitted by law, hold harmless and
indemnify Stockholder from and against any Damages which are incurred by
Stockholder and that arise from any claim against Stockholder by any third party
asserting that Stockholder's entering into this Option Agreement or the grant by
Stockholder of the Option hereunder violates any applicable Legal Requirement.
(c) In the event of the assertion or commencement by any Person of
any claim or Legal Proceeding with respect to which Parent may become obligated
to hold harmless and indemnify Stockholder under this Section 6.2, (i)
Stockholder shall immediately notify Parent of such claim or Legal Proceeding,
and (ii) Parent shall have (A) the exclusive right, at its election, to assume
and control the defense of such claim or Legal Proceeding (with counsel selected
by Parent and reasonably satisfactory to Stockholder) and (B) the right, at its
election, to settle, adjust or compromise such claim or Legal Proceeding without
the consent of Stockholder. At Parent's reasonable request, Stockholder shall
execute a customary agreement in settlement of any such claim or Legal
Proceeding which contains a customary release and other customary terms.
6.3 RELATIONSHIP TO VOTING AGREEMENT. Nothing in this Option Agreement is
intended to limit or otherwise affect the provisions of the Voting Agreement
dated as of October 28, 1996 between Parent and Stockholder.
6.4 EXPENSES. Except as otherwise provided herein, all costs and expenses
incurred in connection with the transactions contemplated by this Option
Agreement shall be paid by the party incurring such costs and expenses. Any
transfer taxes payable in connection with the purchase of Exercised Shares
hereunder will be paid by Parent.
6.5 NOTICES. Any notice or other communication required or permitted to
be delivered to either party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other party hereto):
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if to Stockholder:
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
if to Parent:
Cadence Design Systems, Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Facsimile: 000-000-0000
6.6 SEVERABILITY. Any term or provision of this Option Agreement which is
invalid or unenforceable in any jurisdiction shall, 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
Option Agreement or affecting the validity or enforceability of any of the terms
or provisions of this Option Agreement in any other jurisdiction. If any
provision of this Option Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
6.7 ENTIRE AGREEMENT. This Option Agreement and any 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 Option
Agreement shall be binding upon either party hereto unless made in writing and
signed by both parties hereto. The parties hereto waive trial by jury in any
action at law or suit in equity based upon, or arising out of, this Agreement or
the subject matter hereof.
6.8 ASSIGNMENT, BINDING EFFECT. Except as provided herein, neither this
Option Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party, except that (i)
Parent may assign all or any of its rights and obligations hereunder to any
wholly-owned subsidiary of Parent, and (ii) Parent may designate any other
Person to receive any Exercised Shares purchased hereunder. Subject to the
preceding sentence, this Option Agreement shall be binding upon and shall inure
to the benefit of (i) Stockholder and his heirs, successors and assigns and (ii)
Parent and its successors and assigns. Notwithstanding anything contained in
this Option Agreement to the contrary, nothing in this Option Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto or their respective heirs, successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Option Agreement.
6.9 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage to Parent would occur in the event that any of the provisions of this
Option Agreement was not performed
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by Stockholder in accordance with its specific terms or was otherwise breached,
and that irreparable damage to Stockholder would occur in the event that Section
5.3 of this Option Agreement was not performed by Parent in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that Parent
shall be entitled to an injunction or injunctions to prevent breaches of this
Option Agreement and to enforce specifically the terms and provisions hereof,
and that Stockholder shall be entitled to an injunction or injunctions to
prevent breaches of Section 5.3 and to enforce specifically the terms and
provisions of Section 5.3. Any such equitable remedy may be sought in any
Delaware court or other court of proper jurisdiction, and shall be in addition
to any other remedy at law or in equity. The parties hereto agree that (other
than with respect to Section 5.3) equitable remedies are not appropriate or
necessary for any breach of any provision of this Agreement by Parent. It is
accordingly agreed that the sole and exclusive remedy of Stockholder for any
breach by Parent of a representation, warranty, covenant or obligation (other
than of Section 5.3) shall be an action for damages. Without limiting the
generality of the foregoing, no breach by Parent of a representation, warranty,
covenant or obligation shall give Stockholder any right to terminate this Option
Agreement.
6.10 OTHER AGREEMENTS. Nothing in this Option Agreement shall limit any of
the rights or remedies of Parent or any of the obligations of Stockholder under
any Affiliate Agreement or other agreement between Parent and Stockholder.
6.11 GOVERNING LAW. This Option Agreement shall be governed in all
respects by the laws of the State of Delaware, as applied to contracts entered
into and to be performed entirely within the State of Delaware.
6.12 COUNTERPARTS. This Option 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.
6.13 CONSTRUCTION.
(a) Headings of the Sections of this Option Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
(b) For purposes of this Option 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.
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(c) The parties hereto 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 Option Agreement.
(d) As used in this Option 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."
(e) Except as otherwise indicated, all references in this Option
Agreement to "Sections" are intended to refer to Sections of this Option
Agreement.
IN WITNESS WHEREOF, Parent and Stockholder have caused this Option
Agreement to be executed as of the date first written above.
CADENCE DESIGN SYSTEMS, INC.
By: /s/ X.X. Xxxxx XxXxxxxxx
------------------------------------
X.X. Xxxxx XxXxxxxxx,
Vice President and General Counsel
/s/ Xxxx X. Xxxxxx
---------------------------------------
XXXX X. XXXXXX
Address: X.X. Xxx 0000
Xxxxxxxx, XX 00000
Number of Shares of Company
Common Stock owned as of the date
of this Option Agreement: 2,354,356
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