AGREEMENT
EXHIBIT
3
EXECUTION
COPY
AGREEMENT
This
Agreement, dated as of January 8, 2009 (the “Agreement”), is by
and between Telular Corporation, a Delaware
corporation (the “Company”), and Simcoe Partners, L.P., Simcoe
Management Company, LLC and Xxxxxxx Xxxxxxxxxx (collectively referred to herein
as “The Simcoe
Group”).
WHEREAS,
the Simcoe Group has filed a preliminary proxy statement on Schedule 14A with
the Securities and Exchange Commission (the “SEC”) for the
election of two nominees to the Board of Directors of the Company at the
Company’s 2009 Annual Meeting of Shareholders (including any adjournment or
postponement thereof, the “2009 Annual Meeting”)
and conducting a proxy contest in respect thereof;
WHEREAS,
the Company and the Simcoe Group have agreed that it is in their mutual
interests and in the best interests of Company shareholders to enter into this
Agreement, which, among other things, terminates the pending proxy contest for
the election of directors at the 2009 Annual Meeting (the “Proxy
Contest”);
WHEREAS,
the Company has agreed that, in connection with the 2009 Annual Meeting, the
Board (i) will withdraw the nomination of Xxxx X. Xxxxxx for election as a
member of the Board and (ii) will nominate for election as a member of the
Board, and recommend that the shareholders vote to elect as a director of the
Company, Xxxxxxx Xxxxxxxxxx, founder of Simcoe Partners, L.P. (the “Simcoe
Nominee”);
WHEREAS,
the Simcoe Group has agreed to refrain from submitting any director nominations
and to vote for the election of the Company’s nominees for directors at the 2009
Annual Meeting.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Defined
Terms. For purposes of this Agreement:
(a) The
term “Affiliate” shall have
the meaning set forth in Rule 12b−2 promulgated by the SEC under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and
shall include persons who become Affiliates of any party to this Agreement
subsequent to the date hereof.
(b) The
term “Board”
means the board of directors of the Company.
(c) The
term “Common
Stock” shall mean the Company’s common stock, par value $.01 per
share.
Section
1.2 Interpretation. When
reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words “hereof,”
“herein,” “hereby” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The word “or” shall not be exclusive. This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.
ARTICLE
II
COVENANTS
Section
2.1 Board of
Directors, Annual Meeting and Related Matters.
(a)
2009 Annual
Meeting. The Company shall use all reasonable best efforts to cause the
2009 Annual Meeting to be held and the election of directors thereat to be
conducted on the scheduled date of February 3, 2009, and shall not delay or postpone such meeting
date or election, unless a quorum is not obtained, in which case the Company
shall hold the meeting as promptly thereafter as practicable.
(b) Nomination of
Directors. The Company agrees that at or in connection with the 2009
Annual Meeting, the Board will:
(1) withdraw
and not present the nomination of Xxxx X. Xxxxxx as a director of the
Company;
(2) nominate
the Simcoe Nominee as a director of the Company for a term expiring at the 2010
annual meeting of shareholders and upon the election and qualification of his
successor;
(3) recommend
that the shareholders of the Company vote to elect the Simcoe Nominee and the
other Company nominees for the Board; and
(4) cause
all proxies received by the Company to be voted in the manner specified by such
proxies for election of directors and generally in favor of the Simcoe Nominee and the other Company nominees where such proxies do
not specify how they should be cast.
(c) Efforts. The Company
shall use all reasonable best efforts to ensure that the Simcoe Nominee is
elected by the shareholders at the 2009 Annual Meeting.
(d) Role of Simcoe
Nominee. The Simcoe Nominee, upon election to the Board, will
serve as an integral member of the Board and will be governed by the same
protections and obligations regarding confidentiality, conflicts of interests,
fiduciary duties, trading and disclosure policies and other governance
guidelines and shall have the same rights and benefits, including with respect
to insurance, indemnification, compensation and fees, as are applicable to all
independent directors of the Company.
(e) Proxy Solicitation
Materials. The Company and the Board agree that the Company’s proxy
statement and proxy cards for the 2009 Annual Meeting and all other solicitation
materials to be delivered to shareholders in connection with the 2009 Annual
Meeting (in each case excepting any materials delivered prior to the date
hereof) shall be prepared in accordance with, and in furtherance of, this
Agreement. The Company will provide the Simcoe Group with copies of any portion
of proxy materials or other solicitation materials that contain statements
relating to the Simcoe Group, the Simcoe Nominee or this Agreement a reasonable
period (and, in any event, at least one business day) in advance of filing such
materials with the SEC or disseminating the same in order to permit the Simcoe
Group a reasonable opportunity to review and comment on such materials. The
Simcoe Group will provide, as promptly as reasonably practicable, all
information relating to the Simcoe Nominee (and other information, if any) to
the extent required under applicable law to be included in the Company’s proxy
statement and any other solicitation materials to be delivered to shareholders
in connection with the 2009 Annual Meeting.
The
Company’s proxy statement for the 2009 Annual Meeting shall contain the same
type and tenor of information concerning the Simcoe Nominee as provided for the
Company’s other director nominees.
(f) Committees. To the extent permitted by law and
the Nasdaq listing standards, the Simcoe Nominee shall be eligible and shall be
considered for Committee memberships on the Board to the same extent as other
members of the Board. The Simcoe Nominee shall complete a 2009
Company Director and Officer Questionnaire to enable the Company to evaluate the
Simcoe Nominee’s independence under applicable independence standards and
eligibility to serve on Board committees.
(g) Expenses. Within
ten business days of receiving reasonable documentation with respect to such
expenses, the Company shall reimburse the Simcoe Group an amount equal to the
Simcoe Group’s actual out-of-pocket expenses incurred prior to the date of this
Agreement in connection with the Proxy Contest, including the preparation of
related filings with the SEC and the fees and disbursements of counsel and other
advisors, up to a maximum reimbursement of $50,000, and the Simcoe Group hereby
agrees that such payment shall be in full satisfaction of any claims or rights
it may have as of the date hereof for reimbursement of fees, expenses or costs
in connection with the Proxy Contest.
Section
2.2 Voting
Provisions. The Simcoe Group, together with its Affiliates,
will cause all shares of Common Stock for which they have the right to vote as
of the record date
for the
2009 Annual Meeting to be present for quorum purposes and to be voted at such
meeting or at any adjournments or postponements thereof, (x) in favor of each
director nominated and recommended by the Board for election at such meeting and
(y) against any stockholder nominations for director which are not approved and
recommended by the Board for election at such meeting.
Section
2.4 Termination of the
Proxy Contest; Additional Filings.
(a) The Simcoe Group.
(1) By
executing this Agreement, the Simcoe Group hereby irrevocably agrees to
terminate the pending Proxy Contest. Within two business days of the
date of this Agreement, the Simcoe Group shall file with the SEC an amendment to
its Schedule 13D with respect to the Common Stock disclosing the material
contents of this Agreement, amending applicable items to conform to the
obligations of the parties hereunder and appending this Agreement and the Press
Release as exhibits thereto.
(2) From the date hereof, the Simcoe Group
shall not make, and shall cause its Affiliates not to make, any objection to the
election of any of the Company’s nominees at the 2009 Annual Meeting or any
other statement inconsistent with the provisions of this Agreement.
(3) The Simcoe Group hereby irrevocably withdraws its
December 26, 2008, request to inspect certain of the Company’s books and records
pursuant to Section 220 of the Delaware General Corporation Law, and shall
promptly return to the Company or destroy, in its sole discretion, all materials
and summaries or duplicates thereof that have been delivered to the Simcoe Group
or its representatives pursuant such request prior to the date
hereof.
(4) Promptly following the issuance of the press release
referred to in Section 2.5, the Simcoe Group shall notify the SEC that it is
withdrawing the preliminary proxy statement on Schedule 14A it filed with the
SEC.
(5) The Simcoe Group agrees not to allege that the Company’s
definitive proxy statement or any additional soliciting materials filed with the
SEC in connection with the 2009 Annual Meeting, so long as they conform to the
terms of this Agreement (including Schedule A) and the information furnished by
The Simcoe Group to the Company pursuant to Section 2.1(e), violate any of the
rules or regulations promulgated under the Exchange Act, or contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statement not misleading.
(6) The Simcoe Group agrees not to seek, alone or in concert
with others, (a) to call a meeting of shareholders or solicit consents from
shareholders, (b) to obtain representation on the Board except as otherwise set
forth in this Agreement, or (c) to effect the removal of any member of the
Board, in each case prior to the earlier of (i) the 2010 annual meeting of the
Company’s shareholders or (ii) March 3, 2010.
(7) The Simcoe Group shall not prior to the 2009
Annual Meeting, sell, assign, transfer, grant an option with respect to or
otherwise dispose of any interest in (or enter into an agreement or
understanding with respect to the foregoing) (collectively, a “Disposition”) any
shares of Common Stock; provided, however, that the foregoing limitation shall
not prohibit any Permitted Disposition. A “Permitted
Disposition” shall mean (i) a Disposition pursuant to a tender offer, an
exchange offer, a merger, sale or any other transaction in which all
shareholders of the Company have a right to participate; or (ii) any Disposition
by any member of the Simcoe Group to any other member of the Simcoe Group.
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(b)
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The
Company.
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(1) Within
four business days of the execution of this Agreement, the Company shall
file with the SEC a current report on Form 8-K disclosing the material contents
of this Agreement.
(2) From the date hereof, the Company shall not
make, and shall cause its Affiliates not to make, any objection to the election
of the Simcoe Nominee at the 2009 Annual Meeting or any other statement
inconsistent with the provisions of this Agreement.
(3) The Company agrees not to allege that the preliminary
proxy materials filed by the Simcoe Group with the SEC in connection with the
2009 Annual Meeting violated any of the rules or regulations promulgated under
the Exchange Act, or contained any untrue statement of a material fact or omit
to state a material fact necessary to make the statement not
misleading.
Section
2.5 Publicity. Promptly
after the execution of this Agreement, the Company and the Simcoe Group will
issue a joint press release in the form attached hereto as Schedule A, it being
understood, however, that the Company is solely responsible for the information
and quotations in the release concerning the Company, and the Simcoe Group is
responsible for the information and quotations concerning the Simcoe
Group.
ARTICLE
III
OTHER
PROVISIONS
Section
3.1 Representations and
Warranties.
(a) Representations and
Warranties of the Company. The Company hereby represents and
warrants that this Agreement and the performance by the Company of its
obligations hereunder
(1) has
been duly authorized, executed and delivered by it, and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms;
(2) does
not require the approval of the shareholders of the Company; and
(3) does
not and will not violate any law, any order of any court or other agency of
government, the Certificate of Incorporation of the Company, as amended, or the
By-Laws of the Company, as amended, or any provision of any indenture, agreement
or other instrument to which the Company or any of its properties or assets is
bound, or conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of, or give rise to, any
lien, charge, restriction, claim, encumbrance or adverse penalty of any nature
whatsoever pursuant to any such indenture, agreement or other
instrument.
(b) Representations and
Warranties of the Simcoe Group. The
Simcoe Group represents and warrants that this Agreement and the performance by
the Simcoe Group of its obligations hereunder
(1) has
been duly authorized, executed and delivered by the Simcoe Group, and is a valid and binding
obligation of the Simcoe Group, enforceable against the Simcoe Group in accordance with its terms;
(2) does
not require approval by any owners or holders of any equity interest in the Simcoe
Group (except as has already been obtained); and
(3) does
not and will not violate any law, any order of any court or other agency of
government, the charter or other organizational documents of the Simcoe Group, as amended, or any provision of any
agreement or other instrument to which the Simcoe Group or any of its properties or assets is
bound, or conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such agreement or other instrument,
or result in the creation or imposition of, or give rise to, any lien, charge,
restriction, claim, encumbrance or adverse penalty of any nature whatsoever
pursuant to any such agreement or instrument.
Section 3.2 Release.
(a) By the Simcoe
Group. The Simcoe Group hereby
agrees for the benefit of the Company, and each Affiliate, officer, director,
shareholder, agent, employee, attorney, assigns, predecessor and successor, past
and present, of the Company (the Company and each such Person being a
“Company
Released Person”) as follows: the Simcoe
Group, for itself and for its members, officers, directors, assigns, agents and
successors, past and present, hereby agrees and confirms that, effective from
and after the date of this Agreement, it hereby acknowledges full and complete
satisfaction of, and covenant not to xxx, and forever fully release and
discharge each Company Released Person of, and hold each Company Released Person
harmless from, any and all claims of any nature whatsoever (“Claims”), whether known or unknown, suspected or unsuspected,
including, but not limited to, those arising in respect of or in connection with
the nomination and election of directors or other actions to be taken at the
2009 Annual Meeting, occurring any time or period of time on or prior to the
date of this Agreement (including the future effects of such occurrences,
conditions, acts or omissions).
(b) By the Company. The Company hereby agrees for the benefit
of the Simcoe Group, and each Affiliate, officer, director, member, partner,
manager, shareholder, agent, employee, attorney, assigns, predecessor and
successor, past and present, of each member of the Simcoe Group (the Simcoe
Group and each such Person being a “Simcoe Released
Person”) as follows: the Company, for
itself and for its officers, directors, assigns, agents and successors, past and
present, hereby agrees and confirms that, effective from and after the date of
this Agreement, it hereby acknowledges full and complete satisfaction of, and
covenants not to xxx, and forever fully releases and discharges each Simcoe
Released Person of, and holds each Simcoe Released Person harmless from, any and
all Claims, whether known or unknown, suspected or unsuspected, including, but
not limited to, those arising in respect of or in connection with the nomination
and election of directors or other actions to be taken at the 2009 Annual
Meeting, occurring any time or period of time on or prior to the date of this
Agreement (including the future effects of such occurrences, conditions, acts or
omissions).
Section 3.3 Remedies.
(a) Each
party hereto hereby acknowledges and agrees, on behalf of itself and its
Affiliates, that irreparable harm would occur in the event any of the provisions
of this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties will be
entitled to specific relief hereunder, including an injunction or injunctions to
prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any state or federal court in
New York County in the State of New York, in addition to any other remedy to
which they may be entitled at law or in equity. Any requirements for the
securing or posting of any bond with such remedy are hereby waived.
(b) Each
party hereto agrees, on behalf of itself and its Affiliates, that any actions,
suits or proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby will be brought solely and exclusively in any
state or federal court in New York County in the State of New York (and the
parties agree not to commence any action, suit or proceeding relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to the respective addresses set forth
in Section 3.5 will be effective service of
process for any such action, suit or proceeding brought against any party in any
such court. Each party, on behalf of itself and its Affiliates, irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby, in the state or federal courts in New York County in the State of New
York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an improper or
inconvenient forum.
Section
3.4 Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and may be amended only by
an agreement in writing executed by the parties hereto.
Section
3.5 Notices. All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be in writing
and shall be deemed validly given, made or served, if (x) given by telecopy,
when such telecopy is transmitted to the telecopy number set forth below and the
appropriate confirmation is received or (y) if given by any other means, when
actually received during normal business hours at the address specified in this
subsection:
if to the
Company:
Telular Corporation
000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000-0000
Facsimile:
(000) 000-0000
Attention: Xxxxxxxx Xxxxxx
with
a copy to:
Xxxxxxxxx & Xxxxxxx LLP
0000
Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxx, Esq.
if to the
Simcoe Group:
Simcoe
Partners, L.P.
00
Xxxxxxxxxx Xxxxxx
0xx
Xxxxx
Xxx Xxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxxx
with
a copy to:
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxx X. Xxxxxxxx, Esq.
Section
3.6 Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
Section
3.7 Further
Assurances. Each party agrees to take or cause to be taken
such further actions, and to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and to obtain such
consents, as may be reasonably required or requested by the other party in order
to effectuate fully the purposes, terms and conditions of this
Agreement.
Section
3.8 Third-Party
Beneficiaries. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns, and
nothing in this Agreement is intended to confer on any person other than the
parties hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section
3.9 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[Signature page
follows]
IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
caused the same to be executed by its duly authorized representative as of the
date first above written.
TELULAR
CORPORATION
By:
___________________________
Name:
Title:
SIMCOE PARTNERS,
L.P.
By: Simcoe
Management Company, LLC, its general partner
By: ______________________________
Name: Xxxxxxx
Xxxxxxxxxx
Title: Manager
of Simcoe Management Company, LLC
SCHEDULE
A
For
Immediate Release – January 8, 2009
Telular
Corporation and Simcoe Partners Announce Settlement of Proxy
Contest
Telular
Corporation, a global leader in transforming analog into wireless
communications, and Simcoe Partners, L.P., today announced that they have
reached an agreement to settle their pending proxy contest relating to Telular’s
2009 Annual Meeting of the Stockholders.
Under the
terms of the settlement, Telular has agreed to nominate, as a new director,
Simcoe’s candidate Xxxxxxx Xxxxxxxxxx, founder and managing partner of
Simcoe Partners, a significant Telular shareholder. Xx. Xxxxxxxxxx
will be added to Telular’s slate of the following continuing directors: Xxxxxxxx
X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxx and
M. Xxxxx XxXxxxxx. All of these candidates will be nominated to serve for a
term to expire in 2010. As part of the settlement agreement, Simcoe,
which beneficially owns 950,000 shares, or 5.1% of Telular common stock, has
agreed to cease its own proxy solicitation, withdraw its nominees for
consideration at the 2009 Annual Meeting of the Stockholders, and to vote its
shares of Telular common stock in support of the Board's nominees.
In view
of the settlement agreement with Simcoe and the termination of the proxy
contest, Xxxx Xxxxxx, who has served on Telular’s Board of Directors since 1996,
has announced that he will retire from the Board of Directors and will not stand
for re-election. Additionally, a new Chairman of the Board will be
determined by its members at the Board’s first regular meeting, immediately
following the Annual Stockholders’ Meeting.
“We are
pleased to have reached an agreement, which ultimately we believe is in the best
interest of all Telular stockholders,” said Xxx Xxxxxx, President and CEO of
Telular. “We remain focused on a number of opportunities ahead of us in new
markets and geographies. I believe the proposed slate of directors will best
advise the Company to achieve these strategic intiatives. ”
Xxxxxxx
Xxxxxxxxxx has nearly 15 years of investment, finance and accounting
experience at Xxxxxxx & Company, Private Capital Management and Deloitte
& Touche LLP. Simcoe Partners invests primarily in publicly traded
small capitalization companies it believes are undervalued.
Xx.
Xxxxxxxxxx said., "I believe that Telular shares are substantially undervalued
and that numerous opportunities exist to unlock that value. I look forward
to working closely with Xxx Xxxxxx and the board for the benefit of all
shareholders."
Addressing
Xx. Xxxxxx’x decision to retire, Xx. Xxxxxx added, “I would like to thank Xxxx
for his 12 years of service and commitment to Telular. Xxxx has provided a
wealth of knowledge and guidance, and his advice and commitment have been
critical to the success of Telular during his tenure. We wish him well in all
his future endeavors.”
Xx.
Xxxxxx commented, “I am grateful for the opportunity to have worked with an
extraordinary team at this fine company, and have great confidence in its
future.”
Telular
will prepare a supplement to its Proxy Statement with the Securities and
Exchange Commission, along with a new voting card to reflect the new nominee,
which will be mailed to its shareholders.
About
Telular
Telular
Corporation provides event monitoring and wireless access solutions for business
and residential customers, enabling analog devices such as phones, faxes and
computers to link directly with existing wireless connections. With over 20
years of experience in the wireless industry, Telular Corporation has developed
patented technologies, providing businesses and consumers a bridge between their
multiple communications technologies and a single wireless connection,
delivering remote extension capabilities and access to voice, fax and data
streams without significant network investment or disruption. Headquartered in
Chicago, IL, Telular Corporation has sales offices in Atlanta and Miami. For
more information, please visit xxx.xxxxxxx.xxx.
Investor
Relations Contact:
Xxxxxxx
Xxxxxxx
The
Blueshirt Group
(000)-000-0000
xxxxxxx@xxxxxxxxxxxxxx.xxx
