Exhibit 4.1
STOCK OPTION AGREEMENT, dated as of January 28, 2001 (the "Agreement"),
between Maxim Integrated Products, Inc., a Delaware corporation (the "Grantee"),
Dallas Semiconductor Corporation, a Delaware corporation (the "Issuer").
RECITALS
WHEREAS, Grantee and Issuer are, concurrently with the execution and
delivery of this Agreement, entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), pursuant to which the parties
will engage in a business combination (the "Merger") (capitalized terms not
otherwise defined herein shave have the meanings assigned to them in the Merger
Agreement).
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Grantee has required that Issuer agree, and believing it to be in the
best interests of Issuer, Issuer has agreed, among other things, to grant to
Grantee the Option (as hereinafter defined) to purchase shares of common stock,
par value $0.02 per share, of Issuer ("Issuer Common Stock") at a price per
share equal to the Exercise Price (as hereinafter defined).
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
OPTION TO PURCHASE SHARES
1.1 Grant of Option.
(a) Issuer hereby grants to Grantee an irrevocable option to purchase,
in whole or in part, an aggregate of up to 9,259,002 duly authorized, validly
issued, fully paid and nonassessable shares of Issuer Common Stock (representing
14.9% of the issued and outstanding shares of Issuer Common Stock as of January
25, 2001), on the terms and subject to the conditions set forth herein (the
"Option"); provided, however, that in no event shall the number of shares of
Issuer Common Stock, for which this Option is exercisable, exceed 14.9% of the
issued and outstanding shares of Issuer Common Stock at the time of exercise
without giving effect to the issuance of any Option Shares (as defined below).
The number of shares of Issuer Common Stock that may be received upon the
exercise of the Option and the Exercise Price are subject to adjustment as
herein set forth.
(b) In the event that any additional shares of Issuer Common Stock are
issued or otherwise become outstanding after January 25, 2001 (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 3.1 hereof), the number of shares of Issuer Common Stock subject to the
Option shall be increased so that, after such issuance, such number together
with any shares of Issuer Common Stock previously issued pursuant hereto, equals
14.9% of the number of shares of Issuer Common Stock then issued and
outstanding, without giving effect to any shares subject or issued pursuant to
the Option. Nothing contained in this Section 1.1(b) or elsewhere in this
Agreement shall be deemed to authorize Issuer to breach or fail to comply with
any provision of the Merger Agreement. As used herein, the term "Option Shares"
means the shares of Issuer Common Stock issuable pursuant to the Option, as the
number of such shares shall be adjusted pursuant to the terms hereof.
1.2 Exercise of Option.
(a) The Option may be exercised by Grantee, in whole or in part, at
any time, or from time to time, commencing upon the Exercise Date and prior to
the Expiration Date. As used herein, the term "Exercise Date" means the date on
which Grantee becomes unconditionally entitled to receive a termination fee
pursuant to Section 7.3(b) of the Merger Agreement (the "Termination Fee"). As
used herein, the term "Expiration Date" means the first to occur prior to
Grantee's exercise of the Option pursuant to Section 1.2(b) of:
(i) the Effective Time;
(ii) written notice of termination of this Agreement by Grantee
to Issuer;
(iii) 12 months after the first occurrence of an Exercise Date; or
(iv) the date of termination of the Merger Agreement, unless, in
the case of this clause (iv), Grantee has the right to
receive the Termination Fee either (x) upon, or (y)
following, such termination upon the occurrence of certain
events, in which case the Option will not terminate until
the later of (A) 15 business days following the time the
Termination Fee becomes unconditionally payable, and (B) the
expiration of the period referred to in Section
7.3(b)(A)(III) of the Merger Agreement.
Notwithstanding the termination of the Option, Grantee shall be entitled to
purchase those Option Shares with respect to which it may have exercised the
Option by delivery of an Option Notice (as defined below) prior to the
Expiration Date, and the termination of the Option will not affect any rights
hereunder that by their terms do not terminate or expire prior to or at the
Expiration Date.
(b) In the event Grantee wishes to exercise the Option, Grantee shall
send a written notice to Issuer of its intention to so exercise the Option (an
"Option Notice"), specifying the number of Option Shares to be purchased (and
the denominations of the certificates, if more than one), whether the aggregate
Exercise Price will be paid in cash or by surrendering a portion of the Option
in accordance with Section 1.3(b) or a combination thereof, and the place in the
United States, time and date of the closing of such purchase (the "Option
Closing" and the date of such Closing, the "Option Closing Date"), which date
shall not be less than two Business Days nor more than ten Business Days from
the date on which an Option Notice is delivered; provided, however, that the
Option Closing shall be held only if (i) such purchase would not otherwise
violate or cause the violation of, any applicable material law, statute,
ordinance, rule or regulation (including the HSR Act) (individually, a "Law" and
collectively, "Laws"), and (ii) no material judgment, order, writ, injunction,
ruling or decree of any Governmental Authority (collectively, "Orders") shall
have been promulgated, enacted, entered into, or enforced by any Governmental
Authority that prohibits delivery of the Option Shares, whether temporary,
preliminary or permanent; provided, however, that the parties hereto shall use
their reasonable best efforts to (x) promptly make and process all necessary
filings and applications and obtain all consents, approvals, Orders,
authorizations, registrations and declarations or expiration or termination of
any required waiting periods (collectively, "Approvals") and to comply with any
such applicable Laws and (y) have any such Order vacated or reversed. In the
event the Option Closing is delayed pursuant to clause (i) or (ii) above, the
Option Closing shall be within ten Business Days following the cessation of such
restriction, violation, Law or Order or the receipt of any necessary Approval,
as the case may be (so long as the Option Notice was delivered prior to the
Expiration Date); provided further, that, notwithstanding any prior Option
Notice, Grantee shall be entitled to rescind such Option Notice and shall not be
obligated to purchase any Option Shares in connection with such exercise upon
written notice to such effect to Issuer.
(c) At any Option Closing, (i) Issuer shall deliver to Grantee all of
the Option Shares to be purchased by delivery of a certificate or certificates
evidencing such Option Shares in the denominations designated by Grantee in the
Option Notice, and (ii) if the Option is exercised in part and/or surrendered in
part to pay the aggregate Exercise Price pursuant to Section 1.3(b), Issuer and
Grantee shall execute and deliver an amendment to this Agreement reflecting the
Option Shares for which the Option has not been exercised and/or surrendered. If
at the time of issuance of any Option Shares pursuant to an exercise of all or
part of the Option hereunder, Issuer shall have issued any rights or other
securities which are attached to or otherwise associated with the Issuer 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 Issuer then in effect. At the Option
Closing, Grantee shall pay to Issuer by wire transfer of immediately available
funds to an account specified by Issuer to Grantee in writing at least two
Business Days prior to the Option Closing an amount equal to the Exercise Price
multiplied by the number of Option Shares to be purchased for cash pursuant to
this Article I; provided, however, that the failure or refusal of Issuer to
specify an account shall not affect Issuer's obligation to issue the Option
Shares.
(d) Upon the delivery by Grantee to Issuer of the Option Notice and
the tender of the applicable aggregate Exercise Price in immediately available
funds or the requisite portion of the Option in accordance with Section 1.3,
Grantee shall be deemed to be the holder of record of the Option Shares issuable
upon such exercise, notwithstanding that the stock transfer books of Issuer may
then be closed, that certificates representing such Option Shares may not then
have been actually delivered to Grantee, or Issuer may have failed or refused to
take any action required of it hereunder. Issuer shall pay all expenses that may
be payable in connection with the preparation, issuance and delivery of stock
certificates or an amendment to this Agreement under this Section 1.2 and any
filing fees and other expenses arising from the performance of the transactions
contemplated hereby.
1.3 Payments.
(a) The purchase and sale of the Option Shares pursuant to Section 1.2
of this Agreement shall be at a purchase price equal to $26.8125 per share (as
such amount may be adjusted pursuant to the terms hereof, the "Exercise Price"),
payable at Grantee's option in cash, by surrender of a portion of the Option in
accordance with Section 1.3(b), or a combination thereof.
(b) Grantee may elect to purchase Option Shares issuable, and pay some
or all of the aggregate Exercise Price payable, upon an exercise of the Option
by surrendering a portion of the Option with respect to such number of Option
Shares as is determined by dividing (i) the aggregate Exercise Price payable in
respect of the number of Option Shares being purchased in such manner by (ii)
the excess of the Fair Market Value (as defined below) per share of Issuer
Common Stock as of the last trading day preceding the date Grantee delivers its
Option Notice (such date, the "Option Exercise Date") over the per share
Exercise Price. The "Fair Market Value" per share of Issuer Common Stock shall
be (x) if the Issuer Common Stock is listed on the New York Stock Exchange (the
"NYSE") or any other nationally recognized exchange or trading system as of the
Option Exercise Date, the average of last reported sale prices per share of
Issuer Common Stock thereon for the ten trading days commencing on the 12th
trading day immediately preceding the Option Exercise Date, or (y) if the Issuer
Common Stock is not listed on the NYSE or any other nationally recognized
exchange or trading system as of the Option Exercise Date, the amount determined
by a mutually acceptable independent investment banking firm as the value per
share the Issuer Common Stock would have if publicly traded on a nationally
recognized exchange or trading system (assuming no discount for minority
interest, illiquidity or restrictions on transfer). That portion of the Option
so surrendered under this Section 1.3(b) shall be canceled and shall thereafter
be of no further force and effect.
(c) Certificates for the Option Shares delivered at an Option Closing
will have typed or printed thereon a restrictive legend which will read
substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION
AGREEMENT DATED AS OF JANUARY 28, 2001, A COPY OF WHICH MAY BE OBTAINED
FROM THE SECRETARY OF STAR CORPORATION AT ITS PRINCIPAL EXECUTIVE
OFFICES."
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend will be removed by delivery of substitute
certificate(s) without such reference if such Option Shares have been registered
pursuant to the Securities Act, such Option Shares have been sold in reliance on
and in accordance with Rule 144 under the Securities Act or Grantee has
delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion
of counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act and (ii) the reference to restrictions pursuant to this Agreement
in the above legend will be removed by delivery of substitute certificate(s)
without such reference if the Option Shares evidenced by certificate(s)
containing such reference have been sold or transferred in compliance with the
provisions of this Agreement under circumstances that do not require the
retention of such reference.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that any Option Shares or other securities
acquired by Grantee upon exercise of the Option will not be taken with a view to
the public distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration under
the Securities Act.
2.2 Representations and Warranties of Issuer. Issuer hereby represents
and warrants to Grantee as follows:
(a) Option Shares. Issuer has taken all necessary corporate and other
action to authorize and reserve for issuance, and, subject to receipt of any
Approvals, to permit it to issue, the Option Shares and all additional shares or
other securities that may be issued pursuant to Section 3.1 upon exercise of the
Option, and, at all times from the date hereof until such time as the obligation
to deliver Option Shares hereunder terminates, will have reserved for issuance
upon exercise of the Option the Option Shares and such other additional shares
or securities, if any. All of the Option Shares and all additional shares or
other securities or property that may be issuable pursuant to Section 3.1, upon
exercise of the Option and issuance pursuant hereto, shall be duly authorized,
validly issued, fully paid and nonassessable, shall be delivered free and clear
of all Liens of any nature whatsoever, and shall not be subject to any
preemptive or similar right of any Person.
(b) No Restrictions. No Delaware law or other takeover statute or
similar Law and no provision of the Restated Certificate of Incorporation or
Bylaws of Issuer or any agreement to which Issuer is a party (i) would or would
purport to impose restrictions that might adversely affect or delay the
consummation of the transactions contemplated by this Agreement, or (ii) as a
result of the consummation of the transactions contemplated by this Agreement,
(x) would or would purport to restrict or impair the ability of Grantee to vote
or otherwise exercise the rights of a stockholder with respect to securities of
Issuer or any of its Subsidiaries that may be acquired or controlled by Grantee,
or (y) would or would purport to entitle any Person to acquire securities of
Issuer.
ARTICLE III
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
3.1 In addition to the adjustment in the number of shares of Issuer
Common Stock that may be purchased upon exercise of the Option pursuant to
Section 1.1, the number of shares of Issuer Common Stock that may be purchased
upon the exercise of the Option and the Exercise Price shall be subject to
adjustment from time to time as provided in this Section 3.1. In the event of
any change in the number of issued and outstanding shares of Issuer Common Stock
by reason of any stock dividend, split-up, merger, recapitalization,
combination, conversion, exchange of shares, spin-off or other change in the
corporate or capital structure of Issuer that would have the effect of diluting
or otherwise diminishing Grantee's rights hereunder, the number and kind of
Option Shares or other securities subject to the Option and the Exercise Price
therefor shall be appropriately adjusted so that Grantee shall receive upon
exercise of the Option (or, if such a change occurs between exercise and the
Option Closing, upon the Option Closing) the number and kind of shares or other
securities or property that Grantee would have received in respect of the Option
Shares that Grantee is entitled to purchase upon exercise of the Option if the
Option had been exercised (or the purchase thereunder had been consummated, as
the case may be) immediately prior to such event or the record date for such
event, as applicable. The rights of Grantee under this Article III shall be in
addition to, and shall in no way limit, its rights against Issuer for breach of
or the failure to perform any provision of the Merger Agreement.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Registration of Option Shares Under the Securities Act.
(a) If requested by Grantee at any time and from time to time within
two years after receipt by Grantee of Option Shares (the "Registration Period"),
Issuer shall use its reasonable best efforts, as promptly as practicable, to
effect the registration under the Securities Act and any applicable state law (a
"Demand Registration") of such number of Option Shares or such other Issuer
securities owned by or issuable to Grantee in accordance with the method of sale
or other disposition contemplated by Grantee, including a "shelf" registration
statement under Rule 415 of the Securities Act or any successor provision, and
to obtain all consents or waivers of other parties that are required therefor.
Except with respect to such a "shelf" registration, Issuer shall keep such
Demand Registration effective for a period of not less than 180 days, unless, in
the written opinion of counsel to Issuer, which opinion shall be delivered to
Grantee and which shall be reasonably satisfactory in form and substance to
Grantee and its counsel, such registration under the Securities Act is not
required in order to lawfully sell and distribute such Option Shares or other
Issuer securities in the manner contemplated by Grantee. Issuer shall only have
the obligation to effect three Demand Registrations pursuant to this Section
4.1; provided, however, that only requests relating to a registration statement
that has become effective under the Securities Act shall be counted for purposes
of determining the number of Demand Registrations made. Issuer shall be entitled
to postpone for up to 90 days from receipt of Grantee's request for a Demand
Registration the filing of any registration statement in connection therewith if
the Board of Directors of Issuer determines in its good faith reasonable
judgment that such registration would materially interfere with any material
event involving the Issuer or require premature disclosure of any material
non-public information, the disclosure of which would materially and adversely
affect the Issuer; provided, however, that Issuer shall not have postponed any
Demand Registration pursuant to this sentence during the twelve month period
immediately preceding the date of delivery of Grantee's request for a Demand
Registration.
(b) If Issuer effects a registration under the Securities Act of
Issuer Common Stock for its own account or for any other stockholders of Issuer
(other than on Form S-4 or Form S-8, or any successor form), Grantee shall have
the right to participate in such registration and include in such registration
the number of shares of Issuer Common Stock or such other Issuer securities as
Grantee shall designate by notice to Issuer (an "Incidental Registration" and,
together with a Demand Registration, a "Registration"); provided, however, that,
if the Incidental Registration is in connection with an underwritten public
offering, the managing underwriters of such offering advise Issuer in writing
that, in their opinion, the number of shares of Issuer Common Stock or other
Issuer securities requested to be included in such Incidental Registration
exceeds the number which can be sold in such offering, Issuer shall include
therein (i) first, all shares proposed to be included therein by Issuer, (ii)
second, subject to the rights of any other holders of registration rights in
effect as of the date hereof, the shares requested to be included therein by
Grantee, and (iii) third, shares proposed to be included therein by any other
stockholder of Issuer. Participation by Grantee in any Incidental Registration
shall not affect the obligation of Issuer to effect Demand Registrations under
this Section 4.1. Issuer may withdraw any registration under the Securities Act
that gives rise to an Incidental Registration without the consent of Grantee.
(c) In connection with any Registration pursuant to this Section 4.1
that is an underwritten public offering, (i) Issuer and Grantee shall provide
each other and any underwriter of the offering with customary representations,
warranties, covenants, indemnification and contribution obligations in
connection with such Registration, (ii) Issuer shall use reasonable best efforts
to cause any Option Shares included in such Registration to be approved for
listing on the NYSE or any other nationally recognized exchange or trading
system upon which Issuer's securities are then listed, subject to official
notice of issuance, which notice shall be given by Issuer upon issuance, and
(iii) Grantee shall provide all information reasonably requested by Issuer that
is required for inclusion in any registration statement covering the Option
Shares. Grantee will provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. The costs and
expenses incurred by Issuer in connection with any Registration pursuant to this
Section 4.1 (including any fees related to qualifications under Blue Sky Laws
and SEC filing fees) (the "Registration Expenses") shall be borne by Issuer,
excluding legal fees of Grantee's counsel and underwriting discounts or
commissions with respect to Option Shares to be sold by Grantee included in a
Registration.
4.2 Transfers of Option Shares.
(a) The Option Shares may not be sold, assigned, transferred, or
otherwise disposed of except (i) as provided in Section 4.1 or (ii) other than
in accordance with Section 5.3 hereof, to any purchaser or transferee who would
not, to the knowledge of Grantee after reasonable inquiry, immediately following
such sale, assignment, transfer or disposal beneficially own more than five
percent (5%) of the then-outstanding voting power of the Issuer; provided,
however, that Grantee shall be permitted to sell any Option Shares if such sale
is made pursuant to a tender or exchange offer that has been approved or
recommended by a majority of the members of the Board of Directors of Issuer
(which majority shall include a majority of directors who were directors as of
the date hereof).
ARTICLE V
REPURCHASE RIGHTS; SUBSTITUTE OPTION; FIRST REFUSAL
5.1 Repurchase Rights.
(a) At any time on or after the Exercise Date and prior to the
Expiration Date, Grantee shall have the right (the "Repurchase Right") to
require Issuer to repurchase from Grantee (i) the Option or any part thereof as
Grantee shall designate at a price (the "Option Repurchase Price") equal to the
amount by which (A) the Market/Offer Price (as defined below) exceeds (B) the
Exercise Price, multiplied by the number of Option Shares as to which the Option
is to be repurchased, and (ii) such number of Option Shares as Grantee shall
designate at a price (the "Option Share Repurchase Price") equal to the
Market/Offer Price multiplied by the number of Option Shares so designated. The
term "Market/Offer Price" shall mean the highest of (x) the highest price per
share of Issuer Common Stock offered or paid in any Acquisition Proposal (as
defined in the Merger Agreement), or (y) the highest closing price for shares of
Issuer Common Stock during the six-month period immediately preceding the date
Grantee gives the Repurchase Notice (as hereinafter defined). In determining the
Market/Offer Price, the value of consideration other than cash shall be
determined by a nationally recognized investment banking firm selected by
Grantee and reasonably acceptable to Issuer, which determination, absent
manifest error, shall be conclusive for all purposes of this Agreement.
(b) Grantee shall exercise its Repurchase Right by delivering to
Issuer written notice (a "Repurchase Notice") stating that Grantee elects to
require Issuer to repurchase all or a portion of the Option and/or the Option
Shares as specified therein. The closing of the Repurchase Right (the
"Repurchase Closing") shall take place in the United States at the place, time
and date specified in the Repurchase Notice, which date shall not be less than
two Business Days nor more than ten Business Days from the date on which the
Repurchase Notice is delivered. At the Repurchase Closing, subject to the
receipt of a writing evidencing the surrender of the Option and/or certificates
representing Option Shares, as the case may be, Issuer shall deliver to Grantee
the Option Repurchase Price therefor or the Option Share Repurchase Price
therefor, as the case may be, or the portion thereof that Issuer is not then
prohibited under applicable Law from so delivering. At the Repurchase Closing,
(i) Issuer shall pay to Grantee the Option Repurchase Price for the portion of
the Option that is to be repurchased or the Option Shares Repurchase Price for
the number of Option Shares to be repurchased, as the case may be, by wire
transfer of immediately available funds to an account specified by Grantee at
least 24 hours prior to the Repurchase Closing, and (ii) if the Option is
repurchased only in part, Issuer and Grantee shall execute and deliver an
amendment to this Agreement reflecting the Option Shares for which the Option is
not being repurchased.
(c) To the extent that Issuer is prohibited under applicable Law from
repurchasing the portion of the Option or the Option Shares designated in such
Repurchase Notice, Issuer shall immediately so notify Grantee and thereafter
deliver, from time to time, to Grantee the portion of the Option Repurchase
Price and the Option Share Repurchase Price, respectively, that it is no longer
prohibited from delivering, within five Business Days after the date on which
Issuer is no longer so prohibited; provided, however, that if Issuer at any time
after delivery of a Repurchase Notice is prohibited under applicable Law from
delivering to Grantee the full amount of the Option Repurchase Price and the
Option Share Repurchase Price for the Option or Option Shares to be repurchased,
respectively, Grantee may rescind the exercise of the Repurchase Right, whether
in whole, in part or to the extent of the prohibition, and, to the extent
rescinded, no part of the amounts, terms or the rights with respect to the
Option or Repurchase Right shall be changed or affected as if such Repurchase
Right were not exercised. Issuer shall use its reasonable best efforts to obtain
all required regulatory and legal approvals and to file any required notices to
permit Grantee to exercise its Repurchase Right and shall use its reasonable
best efforts to avoid or cause to be rescinded or rendered inapplicable any
prohibition on Issuer's repurchase of the Option or the Option Shares.
5.2 Substitute Option.
(a) In the event that Issuer enters into an agreement (i) to
consolidate with or merge into any Person, other than Grantee or any Subsidiary
of Grantee (each an "Excluded Person"), and Issuer is not the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
Person, other than an Excluded Person, to merge into Issuer and Issuer shall be
the continuing or surviving or acquiring corporation, but, in connection with
such merger, the then outstanding shares of Issuer 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 Issuer Common Stock shall
after such merger represent less than 50% of the outstanding voting securities
of the merged or acquiring company, or (iii) to sell or otherwise transfer all
or substantially all of its assets to any Person, other than an Excluded Person,
then, and in each such case, the agreement governing such transaction shall make
proper provision so that, unless earlier exercised by Grantee, 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 with identical
terms appropriately adjusted to acquire the number and class of shares or other
securities or property that Grantee would have received in respect of Issuer
Common Stock if the Option had been exercised immediately prior to such
consolidation, merger, sale, or transfer, or the record date therefor, as
applicable and make any other necessary adjustments; provided, however, that if
such a conversion or exchange cannot, because of applicable Law be the same as
the Option, such terms shall be as similar as possible and in no event less
advantageous to Grantee than the Option.
(b) In addition to any other restrictions or covenants, Issuer agrees that it
shall not enter or agree to enter into any transaction described in Section
5.2(a) unless the Acquiring Corporation (as hereinafter defined) and any Person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and agree for the benefit of Grantee to comply with this
Article V.
(c) For purposes of this Section 5.2, the term "Acquiring Corporation" shall
mean (i) the continuing or surviving Person of a consolidation or merger with
Issuer (if other than Issuer), (ii) Issuer in a consolidation or merger in which
Issuer is the continuing or surviving or acquiring Person, and (iii) the
transferee of all or substantially all of Issuer's assets.
5.3 First Refusal.
(a) If Grantee desires to sell, assign, transfer or otherwise dispose
of all or any of the shares of Issuer Common Stock or other securities acquired
by it pursuant to the exercise of the Option, it will give Issuer written notice
of the proposed transaction (the "Offeror's Notice"), identifying the proposed
transferee, the proposed purchase price and the terms of such proposed
transaction. For ten business days following receipt of such notice, Issuer
shall have the option to elect by written notice to purchase all, but not less
than all, of the Issuer Common Stock or other securities specified in Offeror's
Notice at the price and upon the terms set froth in such notice.
(b) The closing of any repurchase of Option Shares pursuant to this
Section 5.3 shall take place within ten business days of Issuer's election to
purchase such Option Shares. On such closing date, Issuer shall pay the purchase
price to Grantee in immediately available funds, and Grantee shall thereupon
surrender to Issuer the certificate or certificates evidencing the shares of
Issuer Common Stock or other securities repurchased by the Issuer pursuant to
this Section 5.3.
(c) If Issuer does not elect to purchase the shares of Issuer Common
Stock or other securities designated in the Offeror's Notice, Grantee may,
within 60 days from the date of the Offeror's Notice, sell such shares of Issuer
Common Stock or other securities to the proposed transferee at no less than the
price specified and on terms not more favorable to the transferee than those set
forth in the Offeror's Notice; provided, however, that the provisions of this
Section 5.3(c) will not limit the rights Grantee many otherwise have if Issuer
has elected to purchase such shares of Issuer Common Stock or other securities
and wrongfully refuses to complete such purchase.
(d) The requirements of this Section 5.3 will not apply to (i) any
sale, assignment, transfer or disposition to an affiliate of Grantee; provided,
however, that such affiliate agrees to be bound by the terms hereof, (ii) any
sale, assignment, transfer or disposition as a result of which the proposed
transferee would own beneficially not more than 5% of the outstanding voting
power of the Issuer, or (iii) any sales or transfers by Grantee in a registered
underwritten offering.
ARTICLE VI
MISCELLANEOUS
6.1 Total Profit.
(a) Notwithstanding any other provision of this Agreement, in no event
shall Grantee's Total Profit (as hereinafter defined) plus any termination fees
paid by Issuer pursuant to Section 7.3(b) of the Merger Agreement (such fees,
collectively, the "Total Issuer Fees") exceed in the aggregate an amount (the
"Limitation Amount") equal to $75,000,000, and, if the total amount that would
otherwise be received by Grantee otherwise would exceed such amount, Grantee, at
its sole election, shall either (i) reduce the number of shares of Issuer Common
Stock subject to this Option, (ii) deliver to Issuer for cancellation Option
Shares previously purchased by Grantee, (iii) reduce the amount of the Option
Repurchase Price or the Option Share Repurchase Price, (iv) pay cash to Issuer,
or (v) any combination thereof, so that Grantee's actually realized Total
Profit, when aggregated with the Total Issuer Fees so paid to Grantee, shall not
exceed the Limitation Amount after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the Option
may not be exercised for a number of Option Shares as would, as of the date of
exercise, result in a Notional Total Profit (as defined below) which, together
with the Total Issuer Fees theretofore paid to Grantee, would exceed the
Limitation Amount; provided, however, that nothing in this sentence shall
restrict any exercise of the Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by Grantee
pursuant to Issuer's repurchase of the Option (or any portion thereof) pursuant
to Section 5.1, (ii) (x) the amount received by Grantee pursuant to Issuer's
repurchase or purchase of Option Shares pursuant to Section 5.1 or Section 5.3,
as the case may be, less (y) Grantee's purchase price for such Option Shares,
and (iii) (x) the net cash amounts or the fair market value of any property
received by Grantee pursuant to any consummated arm's-length sales of Option
Shares (or any other securities into which such Option Shares are converted or
exchanged) to any unaffiliated party, less (y) Grantee's purchase price of such
Option Shares.
(d) As used herein, the term "Notional Total Profit" with respect to
any number of Option Shares as to which Grantee may propose to exercise the
Option shall be the Total Profit determined as of the date of such proposal
assuming that the Option was exercised on such date for such number of Option
Shares and assuming that such Option Shares, together with all other Option
Shares held by Grantee and its affiliates as of such date, were sold for cash at
the closing market price (less customary brokerage commissions) for shares of
Issuer Common Stock on the preceding trading day on the NASDAQ National Market
System (or on any other nationally recognized exchange or trading system on
which shares of Issuer Common Stock are then so listed or traded).
6.2 Further Assurances; Listing.
(a) From time to time, at the other party's request and without
further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Grantee good and marketable title,
free and clear of all Liens, to any Option Shares purchased hereunder. Issuer
agrees not to avoid or seek to avoid (whether by charter amendment or through
reorganization, consolidation, merger, issuance of rights or securities, the
Company Rights Agreement or similar agreement, dissolution or sale of assets, or
by any other voluntary act) the observance or performance of any of the
covenants, agreements or conditions to be observed or performed hereunder by it.
(b) If the Issuer Common Stock or any other securities to be acquired
upon exercise of the Option are then listed on the NYSE (or any other national
securities exchange or trading system), Issuer, upon the request of Grantee,
will promptly file an application to list the shares of Issuer Common Stock or
such other securities to be acquired upon exercise of the Option on the NYSE
(and any other national securities exchange or trading system) and will use
reasonable best efforts to obtain approval of such listing as promptly as
practicable.
6.3 Division of Option; Lost Options. The 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
Issuer, for other agreements providing for Options of different denominations
entitling Grantee to purchase, on the same terms and subject to the same
conditions as are set forth herein, in the aggregate the same number of Option
Shares purchasable hereunder. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft or 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, Issuer will execute and deliver a new agreement of like
tenor and date.
6.4 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
6.5 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the tenth Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(a) if to Grantee to:
Maxim Integrated Products
000 Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
(b) if to Issuer to:
Dallas Semiconductor Corporation
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxx, President
with a copy to:
Jenkens & Xxxxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
6.6 Interpretation. When a reference is made in this Agreement to
Articles, Sections, Exhibits or Schedules, such reference shall be to an Article
or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
6.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
6.8 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement and the other agreements of the parties referred to
herein constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
6.9 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to contracts
executed and to be performed entirely within that State.
6.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
6.11 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
6.12 Submission to Jurisdiction; Waivers. Each of Grantee and Issuer
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by the other party hereto or its successors or assigns may be brought
and determined in the Chancery or other Courts of the State of Delaware, and
each of Grantee and Issuer hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each
of Grantee and Issuer hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process, (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper, and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts, and (d) any right to a trial by jury.
6.13 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
6.14 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
will impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor will any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive to, and not exclusive of, any
rights or remedies otherwise available.
IN WITNESS WHEREOF, Grantee and Issuer have caused this Stock Option
Agreement to be duly executed as of the date first above written.
GRANTEE: MAXIM INTEGRATED PRODUCTS, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ISSUER: DALLAS SEMICONDUCTOR CORPORATION
By: /s/ Xxxx X. Xxx
--------------------------------
Name: Xxxx X. Xxx
Title: President
