EXHIBIT 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (this "Agreement"), dated as of March
2, 1998, between Unitrode Corporation, a Maryland corporation
("Grantee"), and BENCHMARQ Microelectronics, Inc., a Delaware corporation
(the "Company").
WHEREAS, the Company, Grantee and Merrimack Corporation, a
Delaware corporation and a wholly owned subsidiary of Grantee ("Newco"),
have contemporaneously with the execution of this Agreement, entered into
an Agreement and Plan of Merger dated March 2, 1998 (the "Merger
Agreement") which provides, among other things, that Newco shall be
merged with and into the Company pursuant to the terms and conditions
thereof; and
WHEREAS, as an essential condition and inducement to
Grantee's entering into the Merger Agreement and in consideration
therefor, the Company has agreed to grant Grantee the Option (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and in the Merger
Agreement, and intending to be legally bound hereby, the parties hereby
agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase, subject to
the terms hereof, 955,158 shares (such shares being referred to herein as
the "Option Shares") of fully paid and nonassessable common stock, par
value $.001 per share, of the Company ("Company Common Stock"), equal to
approximately ten percent (10%) of the number of shares of Company Common
Stock issued and outstanding (on a fully diluted basis after giving
effect to the exercise of the Option) as of the date hereof at a purchase
price of $17.53 per share of Company Common Stock, as adjusted in
accordance with the provisions of Section 8 (such price, as adjusted if
applicable, the "Option Price").
2. (a) EXERCISE OF OPTION. Grantee may exercise the Option,
in whole or part, and from time to time, if, but only if, a Triggering
Event (as hereinafter defined) shall have occurred prior to the
occurrence of an Option Termination Event (as hereinafter defined),
provided that Grantee shall have sent the written notice of such exercise
(as provided in Subsection 2(e) on or prior to the last date of the one
(1) year period following such Triggering Event (the "Option Expiration
Date").
(b) OPTION TERMINATION EVENTS. The term "Option Termination
Event" shall mean any of the following events:
(i) the Effective Time (as defined in the Merger
Agreement); or
(ii) termination of the Merger Agreement (A) by either
party pursuant to Subsection 9.1(d) of the Merger Agreement,
provided that the matter giving rise to the Order (as defined in
the Merger Agreement) providing the basis for termination under
Subsection 9.1(d) of the Merger Agreement shall not have been
initiated by the Company or any Person who initiates an Acquisition
Proposal (as such item is defined in the Merger Agreement), (B) by
the Company pursuant to Subsection 9.1(c), Subsection 9.1(h) or
Subsection 9.1(j) of the Merger Agreement, (C) by either the
Company or the Grantee pursuant to Subsection 9.1(g) of the Merger
Agreement, (D) by both parties pursuant to Subsection 9.1(a) of the
Merger Agreement, (E) by the Company or the Grantee pursuant to
Subsection 9.1(e) of the Merger Agreement (if there then exists
circumstances that would permit termination of the Merger Agreement
by the Company pursuant to Subsection 9.1(e) of the Merger
Agreement), (F) by the Acquiror pursuant to Subsection 9.1(i)(i)
(if circumstances exist that would allow the Company to terminate
the Merger Agreement pursuant to Subsection 9.1(h) of the Merger
Agreement) or (G) by either party pursuant to any other provision
of the Merger Agreement; provided (in the case of this Subsection
2(b)(ii)(G)) such termination occurs prior to the occurrence of an
Acquisition Proposal.
(c) TRIGGERING EVENTS. The term "Triggering Event" shall mean
the occurrence (after the date hereof) of any of the following events:
(i) any Person (other than the Grantee or any
Subsidiary of the Grantee) shall have commenced (as such term is
defined in Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act with respect to a
tender offer or exchange offer to purchase any shares of Company
Common Stock such that, upon consummation of such offer, such
Person would own or control 10% or more of the then outstanding
Company Common Stock;
(ii) the Company or any Subsidiary of the Company shall
have authorized, recommended, proposed or publicly announced an
intention to authorize, recommend or propose, or entered into, an
agreement with any Person (other than the Grantee or any Subsidiary
of the Grantee) to (A) effect a merger, reorganization,
consolidation, share exchange or other business combination or
similar transaction involving the Company or any of its Significant
Subsidiaries, (B) sell, lease or otherwise dispose of assets of the
Company or its Subsidiaries representing 10% or more of the
consolidated assets of the Company other than in the ordinary
course of business or (C) issue, sell or otherwise dispose of
(including by way of merger, reorganization, consolidation, share
exchange or other business combination or any similar transaction)
securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities)
representing 10% or more of the voting power of the Company or any
of its Significant Subsidiaries; or
(iii) any Person (other than the Grantee or any
Subsidiary of the Grantee or the Company or, in a fiduciary
capacity, any Subsidiary of the Company) shall have,
subsequent to the date of this Agreement, acquired beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange
Act) or the right to acquire beneficial ownership of, or any
"Group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to acquire
beneficial ownership of, 10% or more of the then outstanding
Company Common Stock.
(d) NOTICE OF TRIGGERING EVENT. The Company shall notify
Grantee in writing as promptly as practicable, and in any event within 24
hours, of the occurrence of any Triggering Event, it being understood
that the giving of such notice by the Company shall not be a condition to
the right of Grantee to exercise the Option or for a Triggering Event to
have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event that Grantee is
entitled to and wishes to exercise the Option, it shall send to the
Company a written notice (such notice being herein referred to as an
"Exercise Notice" and the date of issuance of an Exercise Notice being
herein referred to as the "Notice Date") specifying (i) the total number
of shares (or other Option Securities (as hereinafter defined)) it will
purchase pursuant to such exercise and (ii) a place and date not earlier
than three (3) Business Days nor later than forty (40) Business Days from
the Notice Date for the closing of such purchase (the "Option Closing
Date"); provided, that if the closing of the purchase and sale pursuant
to the Option (the "Option Closing") cannot be consummated, by reason of
any applicable Order, 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 provided
further, without limiting the foregoing, that if, in the reasonable
opinion of Grantee, prior notification to or approval of any regulatory
agency is required in connection with such purchase, the Company or
Grantee, as the case may be, shall promptly file the required notice or
application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall
run instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed. In the event that
(x) Grantee receives official notice that an approval of any regulatory
authority required for the purchase of Option Shares (or other Option
Securities) would not be issued or granted or (y) an Option Closing Date
shall not have occurred within one (1) year after the related Notice Date
due to the failure to obtain any such required approval, Grantee shall,
to the extent permitted by applicable Law, nevertheless be entitled to
exercise its rights as set forth herein, including without limitation the
rights set forth in Subsection 8(a) and Grantee shall be entitled to
exercise the Option (or Substitute Option (as defined herein)) in
connection with the resale of the Company Common Stock or other Option
Securities pursuant to a registration statement as provided in Section 9.
(f) PURCHASE PRICE. At the Option Closing, Grantee shall pay
to the Company the aggregate Option Price in immediately available funds
by wire transfer to a bank account designated by the Company, provided
that failure or refusal of the Company to designate such a bank account
shall not preclude Grantee from exercising the Option.
(g) ISSUANCE OF COMPANY COMMON STOCK. At the Option Closing,
simultaneously with the delivery of immediately available funds as
provided in Subsection 2(f), the Company shall deliver to Grantee a
certificate or certificates representing the number of shares of Company
Common Stock (or other Option Securities) purchased by Grantee and, if
the Option should be exercised in part only, a new Option evidencing the
rights of Grantee thereof to purchase the balance of the shares (or other
Option Securities) purchasable hereunder. If at the time of issuance of
any Option Shares pursuant to an exercise of all or part of the Option
hereunder, the Company shall have issued any rights or other securities
which are attached to or otherwise associated with the Company Common
Stock, then each Option Share issued pursuant to such exercise shall also
represent such rights or other securities with terms substantially the
same as and at least as favorable to Grantee as are provided under any
shareholder rights agreement or similar agreement of the Company then in
effect.
(h) LEGEND. Certificates for Company Common Stock (or other
Option Securities) delivered at a closing hereunder may be endorsed with
a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to resale restrictions arising under the Securities Act of 1933,
as amended."
It is understood and agreed that the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "Securities Act"), in the
above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to the Company a
copy of a letter from the staff of the SEC, or an opinion of counsel,
reasonably satisfactory to the Company, to the effect that such legend is
not required for purposes of the Securities Act. In addition, such
certificates shall bear any other legend as may be required by Law.
(i) RECORD GRANTEE; EXPENSES. Upon the delivery by Grantee to
the Company of the Exercise Notice and the tender of the applicable
Option Price in immediately available funds, Grantee shall be deemed to
be the holder of record of the shares of Company Common Stock (or other
Option Securities) issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that
certificates representing such shares of Company Common Stock (or other
Option Securities) shall not then be actually delivered to Grantee or the
Company shall have failed or refused to designate the bank account
described in Subsection 2(f). The Company shall pay all expenses, and any
and all United States federal, state and local taxes and other charges
that may be payable in connection with the preparation, issuance and
delivery of stock certificates under this Section 2 in the name of
Grantee. The Grantee shall pay all expenses and any and all United States
federal, state, local or other taxes or charges that may be payable in
connection with the issuance and delivery of stock certificates or a
substitute option agreement in the name of any assignee, transferee or
designee of Grantee.
3. EVALUATION OF INVESTMENTS. Grantee, by reason of its
knowledge and experience in financial and business matters, believes
itself capable of evaluating the merits and risks of an investment in the
Option and the securities to be purchased/sold pursuant to this Agreement
(collectively the "Option Securities.")
4. DOCUMENTS DELIVERED. Grantee acknowledges receipt of
copies of the following documents:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(b) The Company's Proxy Statement for the meeting of the
Company's stockholder held April 16, 1997; and
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
5. INVESTMENT INTENT. Grantee represents and warrants that
it is entering into this Agreement and is acquiring and/or will acquire
the Option Securities for its own account and not with a view to resale
or distribution of all or any part of the Option Securities in violation
of applicable Law.
6. RESERVATION OF SHARES. The Company agrees (i) that it
shall at all times maintain, free from preemptive rights, sufficient
authorized but unissued or treasury shares of Company Common Stock (and
other Option Securities) issuable pursuant to this Agreement so that the
Option may be exercised without additional authorization of Company
Common Stock (or such other Option Securities) after giving effect to all
other options, warrants, convertible securities and other rights to
purchase Company Common Stock (or such other Option Securities); (ii)
that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of
any of the covenants, stipulations or conditions to be observed or
performed hereunder by the Company; (iii) promptly to take all action as
may from time to time be required in order to permit Grantee to exercise
the Option and the Company to duly and effectively issue shares of
Company Common Stock (or other Option Securities) pursuant hereto; and
(iv) (to the extent agreed to herein) promptly to take all action
provided herein to protect the rights of Grantee against dilution.
7. DIVISION OF OPTION; LOST OPTIONS. This Agreement (and the
Option granted hereby) are exchangeable, without expense, at the option
of Grantee, upon presentation and surrender of this Agreement at the
principal office of the Company, for other Agreements providing for
Options of different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of shares of Company
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any Stock Option Agreements and related Options for
which this Agreement (and the Option granted hereby) may be exchanged.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement,
if mutilated, the Company will execute and deliver a new Agreement of
like tenor and date.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of
shares of Company Common Stock purchasable upon the exercise of the
Option shall be subject to adjustment from time to time as provided in
this Section 8.
(a) ADDITIONAL SHARES ADJUSTMENT. Excluding issuances
contemplated by Subsection 8(b), in the event that any additional shares
of Company Common Stock, or any rights, options, warrants, subscriptions,
calls, convertible securities or other agreements or commitments
obligating the Company to issue any shares of Company Common Stock, are
issued or otherwise become outstanding after the date hereof (an
"Increase"), the number of shares of Company Common Stock subject to the
Option shall be increased by a number of shares equal to the product of
(A) a fraction, the numerator of which is the number of shares of Company
Common Stock for which the Option was exercisable immediately prior to
the Increase and the denominator of which is the number of shares of
Company Common Stock specified in Section 1 and (B) the product of (i)
ten percent (10%) and (ii) the number of shares of Company Common Stock
issued and outstanding on a fully diluted basis immediately after the
Increase minus the number of shares of Company Common Stock issued and
outstanding on a fully diluted basis immediately prior to the Increase;
provided that the number of shares of Company Common Stock subject to the
Option shall in no event exceed ten percent (10%) of the issued and
outstanding shares of Company Common Stock on a fully diluted basis
immediately prior to exercise.
(b) TRANSACTION ADJUSTMENT. In the event of any change in
Company Common Stock by reason of stock dividends, splits, mergers,
recapitalization, combinations, subdivisions, conversions, exchanges of
shares or other similar transactions then, the type and number of shares
of Company Common Stock purchasable upon exercise hereof shall be
appropriately adjusted so that Grantee shall receive upon exercise of the
Option and payment of the aggregate Option Price hereunder the number and
class of shares or other securities or property that Grantee would have
received in respect of Company Common Stock if the Option had been
exercised in full immediately prior to such event, or the record date
therefor, as applicable.
(c) OPTION PRICE ADJUSTMENT. Whenever the number of shares of
Company Common Stock subject to this Option are adjusted pursuant to
Subsection 8(a) or 8(b) the Option Price shall be adjusted by multiplying
the Option Price by a fraction, the numerator of which shall be equal to
the aggregate number of shares of Company Common Stock purchasable under
the Option prior to the adjustment and the denominator of which shall be
equal to the aggregate number of shares of Company Common Stock
purchasable under the Option immediately after the adjustment.
9. REGISTRATION RIGHTS. The Company will, if requested by the
Grantee at any time and from time to time within two (2) years of a
Triggering Event (the "Registration Period"), as expeditiously as
practicable prepare, file and cause to be made effective up to two
registration statements under the Securities Act if such registration is
necessary or desirable in order to permit the offering, sale and delivery
of any or all shares of Company Common Stock (or other Option Securities)
that have been acquired by or are issuable to the Grantee upon exercise
of the Option in accordance with the intended method of sale or other
disposition stated by the Grantee, including, at the sole discretion of
the Company, a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and the Company will use all
reasonable efforts to qualify such shares or other Option Securities
under any applicable state securities laws. Without the Grantee's prior
written consent, no other securities may be included in any such
registration. The Grantee agrees to use all 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 so that upon consummation
thereof no purchaser or transferee will own beneficially more than 5% of
the then outstanding voting power of the Company. The Company will use
all 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 180 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 hereunder to file a registration statement and to maintain
its effectiveness may be suspended for one or more periods of time not
exceeding ninety (90) days in the aggregate if the Board of Directors of
the Company shall have determined in good faith that the filing of such
registration or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect the Company. The expenses associated with the preparation and
filing of any such registration statement pursuant to this Section 9 and
any sale covered thereby (including any fees related to blue sky
qualifications and filing fees in respect of the Securities and Exchange
Commission or the National Association of Securities Dealers, Inc.)
("Registration Expenses") will be for the account of the Company except
for underwriting discounts or commissions or brokers' fees in respect to
shares of Company Common Stock (or other Option Securities) to be sold by
the Grantee and the fees and disbursements of the Grantee's counsel;
provided, however, that the Company will not be required to pay for any
Registration Expenses with respect to such registration if the
registration request is subsequently withdrawn at the request of the
Grantee unless the Grantee agrees to forfeit its right to request one
registration; provided further, however, that, if at the time of such
withdrawal the Grantee has learned of a material adverse change in the
results of operations, condition, business or prospects of the Company
from that known to the Grantee at the time of its request and has
withdrawn the request with reasonable promptness following disclosure by
the Company of such material adverse change, then the Grantee will not be
required to pay any of such expenses and will retain all remaining rights
to request registration. The Grantee will provide all information
reasonably requested by the Company for inclusion in any registration
statement to be filed hereunder. If during the Registration Period the
Company shall propose to register under the Securities Act the offering,
sale and delivery of Company Common Stock for cash for its own account or
for any other stockholder of the Company pursuant to a firm underwriting,
it will, in addition to the Company's other obligations under this
Section 9, allow the Grantee the right to participate in such
registration provided that the Grantee participates in the underwriting;
provided, however, that, if the managing underwriter of such offering
advises the Company in writing that in its opinion the number of shares
of Company Common Stock (or other Option Securities) requested to be
included in such registration exceeds the number which can be sold in
such offering, the Company will, after fully including therein all
shares of Company Common Stock and/or Option Securities to be sold by the
Company, include the shares of Company Common Stock (or other Option
Securities) requested to be included therein by Grantee pro rata (based
on the number of shares of Company Common Stock or other Option
Securities intended to be included therein) with the shares of Company
Common Stock or other Option Securities intended to be included therein
by Persons other than the Company. In connection with any offering, sale
and delivery of Company Common Stock pursuant to a registration statement
effected pursuant to this Section 9, the Company and the Grantee will
provide each other and each underwriter of the offering with customary
representations, warranties and covenants, including covenants of
indemnification and contribution. For purposes of determining whether two
requests have been made under this Section 9, only requests relating to a
registration statement that has become effective under the Securities Act
and pursuant to which the Grantee has disposed of all shares of Company
Common Stock covered thereby in the manner contemplated therein will be
counted. The registration rights granted under this Section 9 are subject
to and are limited by any registration rights previously granted by the
Company and the Grantee acknowledges the registration rights granted
under this Section 9 shall be construed subject to any such limitations.
10. REPURCHASE OF OPTION AND OPTION SHARES. (a) Within ten
(10) Business Days following the occurrence of a Repurchase Event (as
defined herein), the Company shall (i) deliver an offer (an "Option
Repurchase Offer") to repurchase the Option from Grantee at a price (the
"Option Repurchase Price") equal to the amount by which (A) the Competing
Transaction Price (as defined below) exceeds (B) the Option Price,
multiplied by the maximum number of shares for which the Option may then
be exercised by the Grantee, and (ii) deliver an offer (an "Option Share
Repurchase Offer") to repurchase the Option Shares from each owner of
Option Shares from time to time (each, an "Owner") at a price (the
"Option Share Repurchase Price") equal to the amount by which (A) the
Competing Transaction Price exceeds (B) the Option Price, multiplied by
the number of Option Shares then held by such Owner. The term "Competing
Transaction Price" shall mean, as of any date for the determination
thereof, the price per share of Common Stock paid pursuant to the
consummation of any Acquisition Proposal (such consummated Acquisition
Proposal being referred to herein as a "Competing Transaction") or, in
the event of a sale of assets of the Company, the last per-share sale
price of Company Common Stock on the fourth trading day following the
announcement of such sale. If the consideration paid or received in the
Competing Transaction shall be other than in cash, the per share value of
such consideration (on a fully diluted basis) shall be determined by a
nationally recognized investment banking firm selected by Grantee and
reasonably acceptable to the Company, which determination shall be
conclusive for all purposes of this Agreement.
(b) REPURCHASE REQUEST. Upon the occurrence of a Repurchase
Event and whether or not the Company shall have made an Option Repurchase
Offer or Option Share Repurchase Offer under Section 10(a), (i) at the
request (the date of such request being the "Option Repurchase Request
Date") of Grantee delivered prior to the Option Termination Date, the
Company shall repurchase the Option from Grantee at the Option Repurchase
Price and (ii) at the request (the date of such request being the "Option
Share Repurchase Request Date") of any Owner delivered prior to the
Option Termination Date, the Company shall repurchase such number of the
Option Shares (to the extent clearly identifiable as such) from the Owner
as the Owner shall designate at the Option Share Repurchase Price.
(c) REPURCHASE PROCEDURES. Grantee or the Owner, as the case
may be, may (i) accept the Company's Option Repurchase Offer or Option
Share Repurchase Offer under Subsection 10(a) or (ii) exercise its right
to require the Company to repurchase the Option or any Option Shares, as
the case may be, pursuant to Subsection 10(b) by a written notice or
notices stating that Grantee or the Owner, as the case may be, elects to
accept such offer or to require the Company to repurchase the Option or
the Option Shares in accordance with the provisions of this Section 10.
As promptly as practicable, and in any event within five (5) Business
Days, after the surrender to the Company of this Agreement or
Certificates for Option Shares, as applicable, following receipt of a
notice under this Subsection 10(c), the Company shall deliver or cause to
be delivered to Grantee the Option Repurchase Price or to the Owner the
Option Share Repurchase Price, as the case may be.
(d) REGULATORY APPROVALS. The Company hereby undertakes to
use its best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in
order to accomplish any repurchase contemplated by this Section 10.
Nonetheless, to the extent that the Company is prohibited under
applicable Law from repurchasing the Option or any Option Shares in full,
the Company shall immediately so notify Grantee or the Owner and
thereafter deliver or cause to be delivered, from time to time, to
Grantee or the Owner, as appropriate, the portion of the Option
Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five (5) Business
Days after the date on which the Company is no longer so prohibited;
provided, however, that if the Company at any time after delivery of a
notice of repurchase pursuant to Section 10(b) hereof is prohibited under
applicable Law, from delivering to Grantee or the Owner, as appropriate,
the Option Repurchase Price or the Option Share Repurchase Price,
respectively, in full, Grantee or the Owner, as appropriate, may revoke
its notice of repurchase of the Option or the Option Shares,
respectively, either in whole or in part whereupon, in the case of a
revocation in part, the Company shall promptly (i) deliver to Grantee or
the Owner, as appropriate, that portion of the Option Repurchase Price or
the Option Share Repurchase Price that the Company is not prohibited from
delivering after taking into account any such revocation and (ii)
deliver, as appropriate, either (A) to Grantee, a new Agreement
evidencing the right of Grantee to purchase that number of shares of
Company Common Stock equal to the number of shares of Company Common
Stock purchasable immediately prior to the delivery of the notice of
repurchase less the number of shares of Company Common Stock covered by
the portion of the Option repurchased or (B) to the Owner, a certificate
for the number of Option Shares covered by the revocation. If an Option
Termination Event shall have occurred prior to the date of the notice by
the Company described in the first sentence of this Subsection 10(d), or
shall be scheduled to occur at any time before the expiration of a period
ending on the thirtieth day after such date, Grantee shall nonetheless
have the right to exercise the Option until the expiration of such thirty
(30) day period.
(e) DEFINITION. The term "Repurchase Event" shall mean a
Triggering Event followed by the consummation of any transaction included
in the definition of Competing
Transaction.
(f) COMPETING TRANSACTION. Notwithstanding anything to the
contrary in Subsections 2(a), the delivery of a notice by Grantee or an
Owner under Subsection 10(b) hereof specifying that such notice is based
on the Company's public announcement of the execution of an agreement
providing for a Competing Transaction shall be deemed to constitute an
election to exercise the Option, as to the number of Option Shares not
heretofore purchased pursuant to one or more prior exercises of the
Option, on the fifth Business Day following the public announcement of
the consummation of the transaction contemplated by such agreement, in
which event a closing shall occur with respect to such unpurchased Option
Shares in accordance with Subsection 2(e).
(g) REPRESENTATIONS. In connection with any purchase/sale of
the Option or the Option Shares pursuant to this Section 10, the Grantee
and/or the Owner, as applicable, will be required to represent and
warrant to the Company that such Person is the owner of the Option/Option
Shares being purchased, free and clear of all adverse claims and that
such Person will deliver good title to such Option/Option Shares to the
Company, free and clear of all adverse claims, upon consummation of any
purchase/sale pursuant to this Section 10.
11. SUBSTITUTE OPTION IN THE EVENT OF CORPORATE CHANGE. (a)
In the event that prior to an Option Termination Event, the Company shall
enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii)
to permit any person, other than Grantee or one of its Subsidiaries, to
merge into the Company and the Company shall be the continuing or
surviving corporation, but, in connection with such merger, the then
outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or
any other property or the then outstanding shares of Company Common Stock
shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its Subsidiaries, then, and in each such
case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"), at
the election of Grantee, of either (x) the Acquiring Corporation (as
hereinafter defined) or (y) any person that controls the Acquiring
Corporation subsequent to the consolidation, merger or sale in question.
(b) DEFINITIONS. The following terms have the meanings
indicated:
(1) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or
merger with the Company (if other than the Company), (ii) the
Company in a merger in which the Company is the continuing or
surviving person, and (iii) the transferee of all or
substantially all of the Company's assets.
(2) "Substitute Common Stock" shall mean the common
stock issued by the Company upon exercise of the Substitute
Option.
(3) "Assigned Value" shall mean the Competing Transaction
Price, as defined in Section 10.
(4) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for the
ninety (90) days immediately preceding the consolidation,
merger or sale in question; provided that if the Company is
the issuer of the Substitute Option, the Average Price shall
be computed with respect to a share of common stock issued by
the Company, the Person merging into the Company or by any
company which controls or is controlled by such Person
subsequent to the consideration merger or sale in question,
as Grantee may elect.
(c) TERMS OF THE SUBSTITUTE OPTION. The Substitute Option
shall have the same terms as the Option; provided that if the terms of
the Substitute Option cannot, for legal reasons, be the same as the
Option, such terms shall be as similar as possible and in no event less
advantageous to Grantee. The issuer of the Substitute Option shall also
enter into an agreement with Grantee in substantially the same form as
this Agreement, which agreement shall be applicable to the Substitute
Option.
(d) SUBSTITUTE COMMON STOCK. The Substitute Option shall be
exercisable for such number of shares of Substitute Common Stock as is
equal to the Assigned Value multiplied by the number of shares of Company
Common Stock for which the Option is then exercisable, divided by the
Average Price. The exercise price of the Substitute Option per share of
Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of
shares of Company Common Stock for which the Option is then exercisable
and the denominator of which shall be the number of shares of Substitute
Common Stock for which the Substitute Option is exercisable.
(e) LIMITATION. In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than ten
percent (10%) of the shares of Substitute Common Stock issued and
outstanding prior to exercise of the Substitute
Option.
(f) ASSUMPTION OF OBLIGATION. The Company shall not enter
into any transaction described in Subsection 11(a) unless the Acquiring
Corporation and any person that controls the Acquiring Corporation assume
in writing all the obligations of the Company hereunder.
12. EXTENSION OF TIME FOR REGULATORY APPROVALS. The periods
related to exercise of the Option and the other rights of Grantee
hereunder shall be extended (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights, and for the
expiration of all statutory waiting periods and (ii) to the extent
necessary to avoid liability under Section 10(b) of the Exchange Act by
reason of such exercise.
13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Grantee as follows:
(a) AUTHORITY. The Company has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
so contemplated. This Agreement has been duly and validly executed and
delivered by the Company. This Agreement is the valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally or to general principles of equity.
(b) CORPORATE ACTION. The Company has taken all necessary
corporate action to authorize and reserve and to permit it to issue, and
at all times from the date hereof through the termination of this
Agreement in accordance with its terms will have reserved for issuance
upon the exercise of the Option, that number of shares of Company Common
Stock equal to the maximum number of shares of Company Common Stock at
any time and from time to time issuable hereunder, and all such shares of
Company Common Stock, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all Liens and not subject to any preemptive
rights.
(c) NO CONFLICT. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation pursuant to any
provisions of the Certificate of Incorporation or by-laws of the Company
or any Subsidiary of the Company, subject to obtaining any approvals or
consents contemplated hereby, result in any violation of any loan or
credit agreement, note, mortgage, indenture, lease, plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any Subsidiary of the Company or
their respective properties or assets.
(d) ANTI-TAKEOVER STATUTES. The provisions of Section 203 of
the General Corporation Law of the State of Delaware will not, prior to
the termination of this Agreement, apply to this Agreement or the
transactions contemplated hereby and thereby. The Company has taken, and
will in the future take, all steps necessary to irrevocably exempt the
transactions contemplated by this Agreement from any other applicable
state takeover law and from any applicable charter or contractual
provision containing change of control or anti-takeover provisions.
14. ASSIGNMENT. The Company may not assign any of its rights
or obligations under this Agreement or the Option created hereunder to
any other Person, without the express written consent of Grantee. Grantee
may not assign any of its rights or obligations under this Agreement or
the Option created hereunder to any other Person without the consent of
the Company (which consent will not be unreasonably withheld).
15. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and
the Company will use its best efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this
Agreement, including without limitation making application to list the
shares of Company Common Stock issuable hereunder on the Nasdaq National
Market of The Nasdaq Stock Market, Inc. upon official notice of issuance.
16. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement by
either party hereto and that the obligations of the parties hereto shall
be enforceable by either party hereto through injunctive or other
equitable relief.
17. SEPARABILITY OF PROVISIONS. If any term, provision,
covenant or restriction contained in this Agreement is held by a court or
a federal or state regulatory agency of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions
and covenants and restrictions contained in this Agreement shall remain
in full force and effect, and shall in no way be affected, impaired or
invalidated.
18. NOTICES. All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made
when delivered in person, by registered or certified mail (postage
prepaid, return receipt requested), by overnight courier or by facsimile
at the respective addresses of the parties set forth in the Merger
Agreement.
19. GOVERNING LAW. This Agreement shall 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.
20. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original, but
all of which shall constitute one and the same agreement.
21. DEFINITIONS. Capitalized terms used and not defined
herein shall have the meanings set forth in the Merger Agreement.
22. EXPENSES. Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and expenses of
its own financial consultants, investment bankers, accountants and
counsel.
23. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein or in the Merger Agreement, this Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except
as expressly provided herein. Any provision of this Agreement may be
waived only in writing at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
24. FIRST REFUSAL. If the Grantee shall desire to sell,
assign, transfer or otherwise dispose of all or any of the shares of
Company Common Stock or other Option Securities acquired by it pursuant
to the Option, it will give the Company written notice of the proposed
transaction (an "Offeror's Notice"), identifying the proposed transferee,
accompanied by a copy of a binding to purchase such shares of Company
Common Stock, Options or other Option Securities signed by such
transferee and setting forth the terms of the proposed transaction. An
Offeror's Notice will be deemed an offer by the Grantee to the Company,
which may be accepted, in whole but not in part, within ten (10) Business
Days of the receipt of such Offeror's Notice, on the same terms and
conditions and at the same price at which the Grantee is proposing to
transfer such shares of Company Common Stock, Options or other Option
Securities to such transferee. The purchase of any such shares of Company
Common Stock, Options or other Option Securities by the Company will be
settled within ten (10) Business Days of the date of the acceptance of
the offer and the purchase price will be paid to the Grantee in
immediately available funds. In the event of the failure or refusal of
the Company to purchase all the shares of Company Common Stock, Options
or other Option Securities covered by an Offeror's Notice, the Grantee
may, within sixty (60) days from the date of the Offeror's Notice, sell
all, but not less than all, of such shares of Company Common Stock,
Options or other Option Securities to the proposed transferee at no less
than the price specified and on terms no more favorable than those set
forth in the Offeror's Notice; provided, however, that the provisions of
this sentence will not limit the rights the Grantee may otherwise have if
the Company has accepted the offer contained in the Offeror's Notice and
wrongfully refuses to purchase the shares of Company Common Stock,
Options or other Option Securities subject thereto. The requirements of
this Section 24 will not apply to (a) any disposition as a result of
which the proposed transferee would own beneficially not more than 2% of
the outstanding voting power of the Company, (b) any disposition of
Company Common Stock or other Option Securities by a Person to whom the
Grantee has assigned its rights under the Option with the consent of the
Company, (c) any sale by means of a public offering registered under the
Securities Act or (d) any transfer to a wholly-owned Subsidiary of the
Grantee which agrees in writing to be bound by the terms hereof.
25. LIMITATION OF GRANTEE PROFIT. (a) Notwithstanding any
other provision of this Agreement, in no event shall Grantee's Total
Profit (as hereinafter defined) exceed in the aggregate $7,278,000 and,
if it otherwise would exceed such amount, Grantee, at its sole election,
shall either (i) reduce the number of shares of Company Common Stock
subject to this Option, (ii) deliver to the Company for cancellation
Option Shares previously purchased by Grantee, (iii) pay cash to the
Company, or (iv) any combination thereof, so that Grantee's actually
realized Total Profit shall not exceed in the aggregate $7,278,000 after
taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the
sum of (i) (x) the amount (before taxes but net of reasonable and
customary commissions paid or payable in connection with such
transaction) received or receivable by the Grantee pursuant to the sale
of Option Shares (or any other securities or property into which such
Option Shares are converted or exchanged) to any unaffiliated Person(s)
or to the Company with respect to such Option Shares (or any other
securities or property into which such Option Shares are converted or
exchanged), less (y) Grantee's purchase price for such Option Shares (or
any other securities or property into which such Option Shares are
converted or exchanged), (ii) any amounts (before taxes but net of
reasonable and customary commissions paid or payable in connection with
such transaction) received or receivable by the Grantee on the transfer
of the Option (or any portion thereof) to any unaffiliated Person(s) (if
permitted hereunder) or to the Company, (iii) any equivalent amount(s)
with respect to the Substitute Option, and (iv) the amount received by
the Grantee pursuant to Subsection 9.2(b) of the Merger Agreement.
26. FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, the Company and Grantee 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. Nothing contained in this Agreement shall be deemed to
authorize the Company or Grantee to breach any provision of the Merger
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
UNITRODE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
_________________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Executive Officer
BENCHMARQ MICROELECTRONICS, INC.
By: /s/ Xxxx X. Xxxxxxx
__________________________________
Name: Xxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
