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Exhibit 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of February 21, 1999, among LSI Logic Corporation, a Delaware corporation
("Parent"), and SEEQ Technology Incorporated, a Delaware corporation (the
"Company"). Capitalized terms used but not otherwise defined herein will have
the meanings ascribed to them in the Reorganization Agreement (as defined
below).
RECITALS
A. The Company, Merger Sub (as defined below) and Parent have entered
into an Agreement and Plan of Reorganization and Merger (the "Reorganization
Agreement") which provides for the merger (the "Merger") of a wholly-owned
subsidiary of Parent ("Merger Sub") with and into the Company. Pursuant to the
Merger, all outstanding capital stock of the Company will be converted into the
right to receive Common Stock of Parent.
B. As a condition to Parent's willingness to enter into the
Reorganization Agreement, Parent has requested that Company agree, and Company
has so agreed, to grant to Parent an option to acquire shares of Company's
Series B Preferred Stock, par value $0.01 per share (the "Company Preferred
Shares"), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Reorganization Agreement
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Parent an irrevocable
option (the "Option") to acquire up to a number of Company Preferred Shares (the
"Option Shares") that represent 19.9% of the voting power of the issued and
outstanding shares of Company's capital stock (and that, if converted into
shares of Company Common Stock, par value $0.01 per share ("Company Common
Stock"), in accordance with its terms would equal 19.9% of the issued and
outstanding Company Common Stock) as of the first date, if any, upon which an
Exercise Event (as defined in Section 2(a) below) will occur, in the manner set
forth below (i) by paying cash at a price of $300 per share (the "Exercise
Price") and/or, at Parent's election, (ii) by exchanging therefor shares of the
Common Stock, $0.01 par value, of Parent ("Parent Shares") at a rate (the
"Exercise Ratio"), for each Option Share, of a number of Parent Shares equal to
the Exercise Price divided by the closing sale price of Parent Shares on the New
York
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Stock Exchange for the trading day immediately preceding the date of the Closing
(as defined below) of the particular Option exercise.
2. Exercise of Option; Maximum Proceeds.
(a) The Option may be exercised by Parent, in whole or in part, at
any time or from time to time, (i) upon termination of the Reorganization
Agreement pursuant to Section 7.1(e) thereof, or (ii) if the Reorganization
Agreement is terminated pursuant to Section 7.1(b) or 7.1(d) thereof upon the
earlier of (x) the occurrence of an event causing the Termination Fee to become
payable pursuant to Section 7.3(b)(ii) of the Reorganization Agreement or (y)
immediately prior to the consummation of a tender or exchange offer for a
Company Acquisition (any of the events specified in clauses (i) or (ii), of this
sentence being referred to herein as an "Exercise Event"). In the event Parent
wishes to exercise the Option, Parent will deliver to the Company a written
notice (each an "Exercise Notice") specifying the total number of Option Shares
it wishes to acquire and the form of consideration to be paid. Each closing of a
purchase of Option Shares (a "Closing") will occur on a date and at a time prior
to the termination of the Option designated by Parent in an Exercise Notice
delivered at least two business days prior to the date of such Closing, which
Closing will be held at the principal offices of the Company.
(b) The Option will terminate upon the earliest of (i) the Effective
Time, (ii) nine (9) months following the date on which the Reorganization
Agreement is terminated pursuant to Section 7.1(b) or 7.1(d) thereof, if no
event causing the Termination Fee to become payable pursuant to Section
7.3(b)(ii) of the Reorganization Agreement has occurred, (iii)12 months
following the date on which the Reorganization Agreement is terminated pursuant
to Section 7.1(e) thereof, (iv) in the event the Reorganization Agreement has
been terminated pursuant to Section 7.1(b) or 7.1(d) thereof and the Termination
Fee became payable pursuant to Section 7.3(b)(ii) thereof, 12 months after
payment of the Termination Fee; and (v) the date on which the Reorganization
Agreement is terminated if neither a Triggering Event nor the announcement of an
Acquisition Proposal by a third party will have occurred on or prior to the date
of such termination; provided, however, that if the Option cannot be exercised
by reason of any applicable government order or because the waiting period
related to the issuance of the Option Shares under the HSR Act will not have
expired or been terminated, then the Option will not terminate until the tenth
business day after such impediment to exercise will have been removed or will
have become final and not subject to appeal.
(c) If Parent receives in the aggregate pursuant to Section 7.3(b) of
the Reorganization Agreement together with proceeds in connection with any sales
or other dispositions of Option Shares and any dividends received by Parent
declared on Option Shares, more than the sum of (x) $2,000,000 plus (y) the
Exercise Price multiplied by the number of Company Preferred Shares purchased by
Parent pursuant to the Option, then all proceeds to Parent in excess of such sum
will be remitted by Parent to Company.
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3. Conditions to Closing. The obligation of Company to issue Option
Shares to Parent hereunder is subject to the conditions that (a) any waiting
period under the HSR Act applicable to the issuance of the Option Shares
hereunder will have expired or been terminated; (b) all material consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, any Federal, state or local administrative agency or commission or
other Federal state or local governmental authority or instrumentality, if any,
required in connection with the issuance of the Option Shares hereunder will
have been obtained or made, as the case may be; and (c) no preliminary or
permanent injunction or other order by any court of competent jurisdiction
prohibiting or otherwise restraining such issuance will be in effect. It is
understood and agreed that at any time during which the Option is exercisable,
the parties will use their respective best efforts to satisfy all conditions to
Closing, so that a Closing may take place as promptly as practicable.
4. Closing. At any Closing, (a) the Company will deliver to Parent a
single certificate in definitive form representing the number of Option Shares
designated by Parent in its Exercise Notice, such certificate to be registered
in the name of Parent and to bear the legend set forth in Section 9 hereof,
against delivery of (b) payment by Parent to the Company of the aggregate
purchase price for the Option Shares so designated and being purchased by
delivery of (i) a certified check or bank check and/or, at Parent's election,
(ii) a single certificate in definitive form representing the number of Parent
Shares being issued by Parent in consideration therefor (based on the Exercise
Ratio), such certificate to be registered in the name of the Company and to bear
the legend set forth in Section 9 hereof.
5. Representations and Warranties of the Company. Company represents and
warrants to Parent that (a) Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder; (b) the execution and delivery of this Agreement by
the Company and consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or any of the transactions contemplated
hereby; (c) this Agreement has been duly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company and,
assuming this Agreement constitutes a legal, valid and binding obligation of
Parent, is enforceable against the Company in accordance with its terms, except
as enforceability may be limited by bankruptcy and other laws affecting the
rights and remedies of creditors generally and general principles of equity; (d)
except for any filings required under the HSR Act, the Company has taken all
necessary corporate and other action to authorize and reserve for issuance and
to permit it to issue upon exercise of the Option, and at all times from the
date hereof until the termination of the Option will have reserved for issuance,
a sufficient number of unissued Company Preferred Shares for Parent to exercise
the Option in full and will take all necessary corporate or other action to
authorize and reserve for issuance all additional Company Preferred Shares,
Company
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Common Stock issuable upon conversion of such Company Preferred Shares or other
securities which may be issuable pursuant to Section 8(a) upon exercise of the
Option, all of which, upon their issuance and delivery in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable;
(e) upon delivery of the Company Preferred Shares and any other securities to
Parent upon exercise of the Option, Parent will acquire such Company Preferred
Shares or other securities free and clear of all material claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever,
excluding those imposed by Parent; (f) the designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of the Company
Preferred Shares are as set forth in the Certificate of Designation attached
hereto as Annex 1 (the "Certificate of Designations"); (g) the execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, (i) conflict with or violate the Certificate
of Incorporation or Bylaws or equivalent organizational documents of the Company
or any of its subsidiaries, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair the Company's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties are bound or affected; (h) the execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization
or permit of, or filing with, or notification to, any Governmental Entity except
pursuant to the HSR Act; and (i) any Parent Shares acquired pursuant to this
Agreement will not be acquired by the Company with a view to the public
distribution thereof and the Company will not sell or otherwise dispose of such
shares in violation of applicable law or this Agreement.
6. Certain Rights.
(a) Parent Put. At the request of and upon notice by Parent (the "Put
Notice"), at any time during the period during which the Option is exercisable
pursuant to Section 2 (the "Purchase Period"), the Company (or any successor
entity thereof) will purchase from Parent (in each case as limited by
subparagraph (iii) below): (1) the Option, to the extent not previously
exercised, at the price set forth in subparagraph (i) below; and (2) the Option
Shares, if any, acquired by Parent pursuant thereto, at the price set forth in
subparagraph (ii) below:
(i) The difference between the "Market/Tender Offer Price"
for the Company Common Stock as of the date Parent gives notice
of its intent to
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exercise its rights under this Section 6(a) (defined as the
higher of (A) the highest price per share of Company Common Stock
offered as of such date pursuant to any Acquisition Proposal
which was made prior to such date and (B) the highest closing
sale price of one share of Company Common Stock on the Nasdaq
National Market during the 20 trading days ending on the trading
day immediately preceding such date) and the Equivalent Exercise
Price (as defined below), multiplied by the product of the number
of Company Preferred Shares purchasable pursuant to the Option
multiplied by one hundred, but only if the Market/Tender Offer
Price is greater than the Equivalent Exercise Price (as defined
below). For purposes of this Agreement, "Equivalent Exercise
Price" will mean the price determined by dividing the Exercise
Price by one hundred. For purposes of determining the highest
price offered pursuant to any Acquisition Proposal which involves
consideration other than cash, the value of such consideration
will be equal to the higher of (x) if securities of the same
class of the proponent as such consideration are traded on any
national securities exchange or by any registered securities
association, a value based on the closing sale price or asked
price for such securities on their principal trading market on
such date and (y) the value ascribed to such consideration by the
proponent of such Acquisition Proposal, or if no such value is
ascribed, a value determined in good faith by the Board of
Directors of the Company.
(ii) (x) The Exercise Price paid by Parent for the Company
Preferred Shares acquired pursuant to this Option plus (y) (1)
the difference between the Market/Tender Offer Price and the
Equivalent Exercise Price (but only if the Market/Tender Offer
Price is greater than the Equivalent Exercise Price), multiplied
by (2) one hundred, multiplied by (3) the number of Company
Preferred Shares so purchased. If Parent issued Parent Shares in
connection with any exercise of the Option, the Exercise Price
and the Equivalent Exercise Price each will be calculated as set
forth in the last sentence of Section 4 as if Parent had
exercised its right to pay cash instead of issuing Parent Shares.
(iii) Notwithstanding subparagraphs (i) and (ii) above,
pursuant to this Section 6 Company will not be required to pay
Parent in excess of an aggregate of (x) $2,000,000 plus (y) the
Exercise Price paid by Parent for Company Preferred Shares
acquired pursuant to the Option minus (z) any amounts paid to
Parent by the Company pursuant to Section 7.3(b) of the
Reorganization Agreement.
(b) Redelivery of Parent Shares. If Parent has acquired Option
Shares pursuant to exercise of the Option by the issuance and delivery of Parent
Shares, then Company will, if so requested by Parent, in fulfillment of its
obligation pursuant to the first clause of Section 6(a)(ii) with respect to the
Exercise Price paid in the form of Parent Shares only, redeliver the
certificate(s) for such Parent Shares to Parent, free and clear of all claims,
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liens, charges, encumbrances and security interests of any kind or nature
whatsoever, other than those imposed by Parent.
(c) Payment and Redelivery of Option or Shares. In the event
Parent exercises its rights under Sections 6(a) or (b), the Company will, within
ten business days after Parent delivers notice pursuant to Section 6(a), pay the
required amount to Parent in immediately available funds (and Parent Shares, if
applicable) and Parent will surrender to the Company the Option and the
certificates evidencing the Option Shares purchased by Parent pursuant thereto,
and Parent will represent and warrant that such shares are then free and clear
of all claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever, other than those imposed by the Company.
(d) Restrictions on Transfer. Until the expiration of the
Purchase Period, the Company will not sell, transfer or otherwise dispose of any
Parent Shares acquired by it pursuant to this Agreement.
7. Registration Rights
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(a) Following the termination of the Reorganization Agreement,
Parent (sometimes referred to herein as the "Holder") may by written notice (a
"Registration Notice") to the Company (the "Registrant") request the Registrant
to register under the Securities Act all or any part of the shares acquired by
the Holder pursuant to this Agreement (such shares requested to be registered,
the "Registrable Securities") in order to permit the sale or other disposition
of such shares pursuant to a bona fide firm commitment underwritten public
offering in which the Holder and the underwriters will effect as wide a
distribution of such Registrable Securities as is reasonably practicable and
will use reasonable efforts to prevent any person or group from purchasing
through such offering shares representing more than 2% of the voting power of or
2% of the outstanding shares of Common Stock of the Registrant on a fully
diluted basis (a "Permitted Offering"); provided, however, that any such
Registration Notice must relate to a number of shares equal to at least 2% of
the voting power of or 2% of the outstanding shares of Common Stock of the
Registrant on a fully diluted basis and that any rights to require registration
hereunder will terminate with respect to any shares that may be sold pursuant to
Rule 144(k) under the Securities Act. The Registration Notice will include a
certificate executed by the Holder and its proposed managing underwriter, which
underwriter will be an investment banking firm of nationally recognized standing
(the "Manager"), stating that (i) the Holder and the Manager have a good faith
intention to commence a Permitted Offering and (ii) the Manager in good faith
believes that, based on the then prevailing market conditions, it will be able
to sell the Registrable Securities at a per share price equal to at least 80% of
the per share average of the closing sale prices of the Registrant's Common
Stock on the Nasdaq National Market for the twenty trading days immediately
preceding the date of the Registration Notice. The Registrant will thereupon
have the option exercisable by written notice delivered to the Holder within ten
business days after the receipt of the Registration Notice, irrevocably to agree
to purchase all or any part of the Registrable Securities for cash at a price
(the "Option Price") equal to the product of (i) the number of Registrable
Securities so purchased and (ii) (x) if such Registrable Securities are Company
Common Stock the per share average of the closing sale prices of the
Registrant's Common Stock on the Nasdaq National Market for the twenty trading
days immediately preceding the date of the Registration Notice and (y) if such
shares are Company Series B Preferred Stock at a price equal to one hundred
multiplied by the price obtained in subsection (x). Any such purchase of
Registrable Securities by the Registrant hereunder will take place at a closing
to be held at the principle executive offices of the Registrant or its counsel
at any reasonable date and time designated by the Registrant in such notice
within ten business days after delivery of such notice. The payment for the
shares to be purchased will be made by delivery at the time of such closing of
the Option Price in immediately available funds.
(b) If the Registrant does not elect to exercise its option to
purchase pursuant to Section 7(a) with respect to all Registrable Securities,
the Registrant will use all reasonable efforts to effect, as promptly as
practicable, the registration under the Securities Act and the listing on the
exchange or market where the Company's Common Stock is then trading of the
unpurchased Registrable Securities requested to be registered in the
Registration Notice; provided, however, that (i) the Holder will not be entitled
to more than an aggregate of four
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effective registration statements hereunder and (ii) the Registrant will not be
required to file any such registration statement during any period of time (not
to exceed 40 days after a Registration Notice in the case of clause (A) below or
90 days after a Registration Notice in the case of clauses (B) and (C) below)
when (A) the Registrant is in possession of material non-public information
which it reasonably believes would be detrimental to be disclosed at such time
and, in the opinion of counsel to such Registrant, such information would have
to be disclosed if a registration statement were filed at that time; (B) the
Registrant is required under the Securities Act to include audited financial
statements for any period in such registration statement and such financial
statements are not yet available for inclusion in such registration statement;
or (C) such Registrant determines, in its reasonable judgment, that such
registration would interfere with any financing, acquisition or other material
transaction involving the Registrant. If consummation of the sale of any
Registrable Securities pursuant to a registration hereunder does not occur
within 180 days after the filing with the SEC of the initial registration
statement therefor, the provisions of this Section 7 will again be applicable to
any proposed registration. The Registrant will use all reasonable efforts to
cause any Registrable Securities registered pursuant to this Section 7 to be
qualified for sale under the securities or blue sky laws of such jurisdictions
as the Holder may reasonably request and will continue such registration or
qualification in effect in such jurisdictions; provided, however, that the
Registrant will not be required to qualify to do business in, or consent to
general service of process in, any jurisdiction by reason of this provision.
(c) The registration rights set forth in this Section 7 are
subject to the condition that the Holder will provide the Registrant with such
information with respect to the Holder's Registrable Securities, the plan for
distribution thereof, and such other information with respect to the Holder as,
in the reasonable judgment of counsel for the Registrant, is necessary to enable
the Registrant to include in a registration statement all material facts
required to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 7 will be effected
at the Registrant's expense, except for underwriting discounts and commissions
and the fees and expenses of counsel to the Holder, and the Registrant will
provide to the underwriters such documentation (including certificates, opinions
of counsel and "comfort" letters from auditors) as are customary in connection
with underwritten public offerings and as such underwriters may reasonably
require. In connection with any registration, the Holder and the Registrant
agree to enter into an underwriting agreement reasonably acceptable to each such
party, in form and substance customary for transactions of this type with the
underwriters participating in such offering.
(e) Indemnification.
(i) The Registrant will indemnify the Holder, each of its
directors and officers and each person who controls the Holder within the
meaning of Section 15 of the Securities Act, and each underwriter of the
Registrant's securities, with respect to any
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registration, qualification or compliance which has been effected pursuant to
this Agreement, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Registrant of any rule
or regulation promulgated under the Securities Act applicable to the Registrant
in connection with any such registration, qualification or compliance, and the
Registrant will reimburse the Holder and, each of its directors and officers and
each person who controls the Holder within the meaning of Section 15 of the
Securities Act, and each underwriter for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action; provided, that the Registrant
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Registrant by such
Holder or director or officer or controlling person or underwriter seeking
indemnification.
(ii) The Holder will indemnify the Registrant, each of its
directors and officers and each underwriter of the Registrant's securities
covered by such registration statement and each person who controls the
Registrant within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Holder of any rule or regulation promulgated under the Securities Act
applicable to the Holder in connection with any such registration, qualification
or compliance, and will reimburse the Registrant, such directors, officers or
control persons or underwriters for any legal or any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Registrant by the Holder
for use therein; provided, that in no event will any indemnity under this
Section 7(e) exceed the net proceeds of the offering received by the Holder.
(iii) Each party entitled to indemnification under this
Section 7(e) (the "Indemnified Party") will give notice to the party required to
provide indemnification (the
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"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and will permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided, that counsel for the Indemnifying Party, who will
conduct the defense of such claim or litigation, will be approved by the
Indemnified Party (whose approval will not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party will pay such expense if
representation of the Indemnified Party by counsel retained by the Indemnifying
Party would be inappropriate due to actual or potential differing interests
between the Indemnified Party and any other party represented by such counsel in
such proceeding, and provided further, however, that the failure of any
Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its obligations under this Section 7(e) unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action. No Indemnifying Party, in the defense of any such claim
or litigation will, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party will be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which will not be unreasonably withheld).
8. Adjustment Upon Changes in Capitalization; Rights Plans.
(a) In the event of any change in the Company Preferred Shares by
reason of stock dividends, stock splits, reverse stock splits, mergers (other
than the Merger), recapitalizations, combinations, exchanges of shares and the
like (including without limitation any conversion of the Company Preferred
Shares into shares of Company Common Stock), the type and number of shares or
securities subject to the Option, the Exercise Ratio, the Exercise Price and the
other numbers herein requiring adjustment will be adjusted appropriately, and
proper provision will be made in the agreements governing such transaction so
that Parent will receive, upon exercise of the Option, the number and class of
shares or other securities or property that Parent would have received in
respect of the Company Preferred Shares if the Option had been exercised
immediately prior to such event or the record date therefor, as applicable.
(b) At any time during which the Option is exercisable, and at any
time after the Option is exercised (in whole or in part, if at all), the Company
will not amend (nor permit the amendment of) the Company Rights Plan nor adopt
(nor permit the adoption of) a new stockholders rights plan, that contains
provisions for the distribution or exercise of rights thereunder as a result of
Parent or any affiliate or transferee being the beneficial owner of shares of
the Company by virtue of the Option being exercisable or having been exercised
(or as a result of beneficially owning shares issuable in respect of any Option
Shares).
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9. Restrictive Legends. Each certificate representing Option Shares
issued to Parent hereunder, and each certificate representing Parent Shares
delivered to the Company at a Closing, will include a legend in substantially
the following form:
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 FEBRUARY 21, 1999, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER.
10. Listing and HSR Filing. The Company, upon the request of Parent,
will promptly file an application to list the Option Shares to be acquired upon
exercise of the Option for quotation on the Nasdaq National Market and will use
its best efforts to obtain approval of such listing as soon as practicable.
Parent, upon the request of the Company, will promptly file an application to
list the Parent Shares issued and delivered to the Company pursuant to Section 4
on the New York Stock Exchange and will use its best efforts to obtain approval
of such listing as soon as practicable. Promptly after the date hereof, each of
the parties hereto will promptly file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice all required
premerger notification and report forms and other documents and exhibits
required to be filed under the HSR Act to permit the acquisition of the Option
Shares subject to the Option at the earliest possible date.
11. Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto and their respective
successors and permitted assigns any rights or remedies of any nature whatsoever
by reason of this Agreement. Any shares sold by a party in compliance with the
provisions of Section 7 will, upon consummation of such sale, be free of the
restrictions imposed with respect to such shares by this Agreement and any
transferee of such shares will not be entitled to the rights of such party.
Certificates representing shares sold in a registered public offering pursuant
to Section 7 will not be required to bear the legend set forth in Section 9.
12. Specific Performance. The parties hereto recognize and agree that if
for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party hereto agrees that in addition to
other remedies the other party hereto will be entitled to an injunction
restraining any violation or threatened violation of the provisions of this
Agreement or the right to enforce any of the covenants or agreements set forth
herein by specific
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performance. In the event that any action will be brought in equity to enforce
the provisions of the Agreement, neither party hereto will allege, and each
party hereto hereby waives the defense, that there is an adequate remedy at law.
13. Entire Agreement. This Agreement and the Reorganization Agreement
(including the appendices thereto) constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof.
14. Further Assurances. Each party hereto will execute and deliver all
such further documents and instruments and take all such further action as may
be necessary in order to consummate the transactions contemplated hereby.
15. Validity. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of the other
provisions of this Agreement, which will remain in full force and effect. In the
event any Governmental Entity of competent jurisdiction holds any provision of
this Agreement to be null, void or unenforceable, the parties hereto will
negotiate in good faith and will execute and deliver an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the extent
permitted by law, the intent of the parties hereto with respect to such
provision.
16. Notices. All notices and other communications hereunder will be in
writing and will be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as will be specified by like notice):
(1) if to Parent, to:
LSI Logic Corporation
0000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President and General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
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Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(2) if to the Company, to:
SEEQ Technology Incorporated
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
17. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State.
18. Expenses. Except as otherwise expressly provided herein or in the
Reorganization Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement will be paid by the party incurring
such expenses.
19. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
20. Assignment. Neither of the parties hereto may sell, transfer, assign
or otherwise dispose of any of its rights or obligations under this Agreement or
the Option created hereunder to any other person, without the express written
consent of the other party, except that the rights and obligations hereunder
will inure to the benefit of and be binding upon any successor of a party
hereto.
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21. Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed to be an original, but both of which, taken together,
will constitute one and the same instrument.
22. Company Covenant. Promptly upon the request of Parent, Company will
take all action necessary in accordance with Delaware Law and its Certificate of
Incorporation and Bylaws to convene a meeting of its stockholders to be held as
promptly as practicable after the date of such request, for the purpose of
considering a proposal to increase the authorized capital stock of the Company
sufficient to allow the Company to reserve for issuance a sufficient number of
shares of its Common Stock to permit the conversion in full of the Company
Preferred Shares into Common Stock as provided for in the Certificate of
Designations. The Board of Directors of the Company will recommend that the
stockholders of the Company vote in favor of such proposal. Until the earlier of
such time as Parent has fully exercised this Option or the termination of this
Option in accordance with its terms, Company will not amend the Certificate of
Designations without the prior written consent of Parent.
23. Parent Covenant. Parent hereby covenants and agrees that at any
meeting of stockholders held to consider a proposal to increase the authorized
capital stock of the Company (or any written consent solicited therefor), Parent
will vote all of the Company's shares held by it in favor of such proposal if
the Company's board of directors recommends that stockholders vote in favor of
such proposal.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
LSI LOGIC CORPORATION
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
--------------------------------------
Title: Executive Vice President
------------------------------------
SEEQ TECHNOLOGY INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
[SIGNATURE PAGE TO STOCK OPTION AGREEMENT]
