EXHIBIT 2
STOCKHOLDER AGREEMENT, dated as of April 21,
1998, among GEC INCORPORATED, a Delaware corporation
("Parent"), GEC ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of Parent
("Purchaser"), and the persons listed on Schedule A
hereto (each a "Stockholder" and, collectively, the
"Stockholders").
WHEREAS, Parent, Purchaser and Tracor, Inc., a Delaware corporation
(the "Company"), propose to enter into an Agreement and Plan of Merger dated as
of the date hereof (as the same may be amended or supplemented, the "Merger
Agreement") providing for the making of a cash tender offer (as such offer may
be amended from time to time as permitted under the Merger Agreement, the
"Offer") by Purchaser for shares of Common Stock, par value $.01 per share, of
the Company (the "Common Stock") and the merger of the Company and Purchaser
(the "Merger");
WHEREAS, each Stockholder is the beneficial owner of the shares of
Common Stock set forth opposite such Stockholder's name on Schedule A hereto;
such shares of Common Stock, as such shares may be adjusted by stock dividend,
stock split, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or other change or transaction of or by the
Company, together with shares of Common Stock that may be acquired after the
date hereof by such Stockholder, including shares of Common Stock issuable upon
the exercise of options or warrants to purchase Common Stock (as the same may be
adjusted as aforesaid), being collectively referred to herein as the "Shares" of
such Stockholder; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that the Stockholders enter into
this Agreement;
NOW, THEREFORE, to induce Parent and Purchaser to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. Grant of Purchase Option.
(a) Each Stockholder hereby severally and not jointly agrees that it
shall tender the Shares it owns as of the date hereof and any Shares it may
acquire
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prior to the expiration of the Offer and that it shall not withdraw any
Shares so tendered (it being understood that the obligation contained in
this sentence is unconditional, subject to Section 8). In addition, each
Stockholder hereby severally and not jointly grants to Purchaser an
irrevocable option (as to each Stockholder, the "Option") to purchase any
of or all the Shares owned by such Stockholder and any of or all the Shares
for which any stock options and warrants owned by such Stockholder are then
exercisable on the date the Option is exercised by Purchaser (on any date,
the "Vested Options and Warrants") in each case at a price per Share equal
to $40.00 (the "Original Offer Price"). Subject to Section 8, the Option
may be exercised at any time and from time to time after the date hereof,
in whole or in part. If Purchaser shall for any reason have increased the
price per share payable in the Offer over the Original Offer Price (and
Purchaser accepts Shares for payment pursuant to the Offer), then,
immediately following Purchaser's payment for the Shares pursuant to the
Offer, each Stockholder shall pay to Purchaser on demand an amount in cash
equal to the product of (x) the number of such Stockholder's Shares
purchased pursuant to the Offer and (y) the excess of (A) the per share
cash consideration received by the Stockholder as a result of the Offer, as
amended, over (B) the Original Offer Price.
(b) In the event that Purchaser wishes to exercise the Option as to a
Stockholder, Purchaser shall give written notice (the date of such notice
being called the "Notice Date") to such Stockholder and to the Company
specifying the number (if less than all) of such Stockholder's Shares,
including shares of Common Stock underlying Vested Options and Warrants,
and a place, time and date not later than 10 Business Days (as defined in
the Merger Agreement) from the Notice Date for the closing of such
purchase. Prior to the closing, such Stockholder will take all action
necessary to exercise the Vested Options and Warrants and obtain possession
of the underlying Shares.
2. Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
and Purchaser as follows:
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(a) Authority. The Stockholder has all requisite power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Stockholder. This Agreement has been duly
executed and delivered by the Stockholder and constitutes a valid and
binding obligation of the Stockholder enforceable against the Stockholder
in accordance with its terms, except as the same may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar Laws (as defined in the Merger Agreement) relating to
creditors' rights generally and (b) legal principles of general
applicability governing the application and availability of equitable
remedies. Except for the expiration or termination of any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), neither the execution, delivery or
performance of this Agreement by the Stockholder nor the consummation by
the Stockholder of the transactions contemplated hereby will (i) require
any filing with, or permit, authorization, consent or approval of, any
Governmental Authority (as defined in the Merger Agreement), (ii) result in
a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default under, or give rise to any right of
termination, amendment, cancelation or acceleration under, or result in the
creation of any Lien (as defined in the Merger Agreement) other than a
Permitted Encumbrance (as defined in the Merger Agreement) upon any of the
properties or assets of the Stockholder under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license,
permit, concession, franchise, contract, agreement or other instrument or
obligation (a "Contract") to which the Stockholder is a party or by which
the Stockholder or any of the Stockholder's properties or assets, including
the Stockholder's Shares, may be bound or (iii) violate any Order (as
defined in the Merger Agreement) or any Law applicable to the Stockholder
or any of the Stockholder's properties or assets, including the
Stockholder's Shares, other than, in the case of clause (ii) above, such
items that, individually or in the aggregate, have not and could not
reasonably be expected to have a material adverse
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effect on the ability of the Stockholder to perform its
obligations under this Agreement.
(b) The Shares. The Stockholder's Shares and the certificates
representing such Shares are now, and at all times during the term hereof
will be, held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, and the Stockholder has good and marketable
title to such Shares, free and clear of any Liens, proxies, voting trusts
or agreements, understandings or arrangements, except for any such Liens or
proxies arising hereunder.
(c) Brokers. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of the Stockholder.
(d) Merger Agreement. The Stockholder understands and acknowledges
that Parent is entering into, and causing Purchaser to enter into, the
Merger Agreement in reliance upon the Stockholder's execution and delivery
of this Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
and Purchaser hereby represent and warrant to the Stockholders as follows:
(a) Authority. Each of Parent and Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by Parent and Purchaser and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and
Purchaser. This Agreement has been duly executed and delivered by Parent
and Purchaser and constitutes a valid and binding obligation of Parent and
Purchaser enforceable in accordance with its terms, except as the same may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar Laws relating to creditors' rights
generally and (b) legal principles of general applicability governing the
application and availability of equitable remedies.
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(b) Securities Act. The Shares will be acquired in compliance with,
and Purchaser will not offer to sell or otherwise dispose of any Shares so
acquired by it in violation of the registration requirements of, the
Securities Act of 1933, as amended.
4. Covenants of the Stockholders. Each Stockholder, severally and
not jointly, agrees as follows:
(a) The Stockholder shall not, except as contemplated by the terms of
this Agreement, (i) sell, transfer, pledge, assign or otherwise dispose of,
or enter into any Contract, option or other arrangement (including any
profit sharing arrangement) or understanding with respect to the sale,
transfer, pledge, assignment or other disposition of, the Shares to any
person other than Purchaser or Purchaser's designee, (ii) enter into any
voting arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney or otherwise, with respect to the Shares or (iii) take
any other action that would in any way restrict, limit or interfere with
the performance of its obligations hereunder or the transactions
contemplated hereby.
(b) Subject to Section 11 hereof, until the Merger is consummated or
the Merger Agreement is terminated, the Stockholder shall not, nor shall
the Stockholder permit any investment banker, financial adviser, attorney,
accountant or other representative or agent of the Stockholder to, directly
or indirectly (i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action designed or reasonably
likely to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal (as defined in the Merger Agreement) or (ii) participate in any
discussions or negotiations regarding any Acquisition Proposal. Without
limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by an investment banker,
financial advisor, attorney, accountant or other representative or agent of
the Stockholder shall be deemed to be a violation of this Section 4(b) by
the Stockholder.
(c) At any meeting of stockholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other
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circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) the Stockholder's
Shares in favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the other transactions contemplated by the
Merger Agreement. At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
shall vote (or cause to be voted) the Stockholder's Shares against (i) any
merger agreement or merger (other than the Merger Agreement and the
Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Acquisition Proposal (collectively,
"Alternative Transactions") or (ii) any amendment of the Company's
certificate of incorporation or bylaws or other proposal or transaction
involving the Company or any of its subsidiaries, which amendment or other
proposal or transaction would in any manner impede, frustrate, prevent or
nullify the Offer, the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement (collectively,
"Frustrating Transactions").
5. Grant of Irrevocable Proxy; Appointment of Proxy. (a) Each
Stockholder hereby irrevocably grants to, and appoints, Xxxx Xxxxxx and Xxxx
Xxxxxxx and any other individual who shall hereafter be designated by Parent,
and each of them, such Stockholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of such Stockholder, to
vote such Stockholder's Shares, or grant a consent or approval in respect of
such Shares, at any meeting of stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement and against any Alternative
Transaction or Frustrating Transaction.
(b) Each Stockholder represents that any proxies heretofore given in
respect of such Stockholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
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(c) Each Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 5 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of such Stockholder under this Agreement. Such Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked, subject to Section 8. Such Stockholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done by virtue hereof. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of the General
Corporation Law of the State of Delaware. Such irrevocable proxy shall be valid
until the earlier of (i) December 31, 1998 or (ii) the termination of this
Agreement pursuant to Section 8.
6. Further Assurances. Each Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Purchaser may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement and to vest the
power to vote such Stockholder's Shares as contemplated by Section 5. Parent and
Purchaser jointly and severally agree to use reasonable efforts to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements that may be imposed with respect to the transactions contemplated
by this Agreement (including any applicable legal requirements of the HSR Act).
7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Purchaser
may assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. 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. Each Stockholder agrees that this
Agreement and the obligations of such Stockholder hereunder shall attach to such
Stockholder's Shares and shall be binding upon any person or entity to which
legal or beneficial ownership of such Shares shall pass, whether by operation of
law or otherwise, including such Stockholder's heirs, guardians, administrators
or successors.
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8. Termination. This Agreement, and all rights and obligations of
the parties hereunder, shall terminate upon the earlier of (a) the date upon
which the Merger Agreement is terminated pursuant to Section 9.1(a) or (f)
thereof or pursuant to Section 9.1(d)(i) thereof under circumstances when Parent
did not have the right to terminate the Merger Agreement pursuant to Section
9.1(e)(iv) thereof and (b) December 31, 1998; provided, however, that Sections
1, 4(a), 6, 7, 10 and 13 hereof and this Section 8 shall survive any termination
until the date that is 75 days after the date of termination of the Merger
Agreement (other than any termination referred to in clause (a) above).
9. Stop Transfer. The Company agrees with, and covenants to, Parent
and Purchaser that the Company shall not register the transfer of any
certificate representing any Stockholder's Shares unless such transfer is made
in accordance with the terms of this Agreement.
10. General Provisions.
(a) Payments. All payments required to be made to any party to this
Agreement shall be made by wire transfer of immediately available funds to
an account designated by such party at least one trading day prior to such
payment.
(b) Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense.
(c) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(d) Notice. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt
requested) to the parties at the
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following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Parent or Purchaser, to:
GEC Incorporated and
GEC Acquisition Corp.
c/o GEC Marconi N.A., Inc.
Mail Stop 11 CO1
000 Xxxxxx Xxxx
Xxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No: (000) 000-0000
and
(ii) if to a Stockholder, to the address set forth under the name of
such Stockholder on Schedule A hereto
with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telecopier No.: (000) 000-0000
(e) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of 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. Wherever the words "include", "includes"
or "including"
10
are used in this Agreement, they shall be deemed to be followed by the
words "without limitation". Words in the singular include the plural, and
words in the plural include the singular.
(f) Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
(h) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Delaware, regardless
of the Laws that might otherwise govern under applicable principles of
conflict of Law.
(i) Publicity. Except as otherwise required by Law, court process or
the rules of a national securities exchange or the Nasdaq National Market
or as contemplated or provided in the Merger Agreement, for so long as this
Agreement is in effect, no Stockholder shall issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement or the Merger Agreement without
the consent of Parent, which consent shall not be unreasonably withheld.
11. Stockholder Capacity. No person executing this Agreement makes
any agreement or understanding herein in his or her capacity as a director or
officer of the Company or any subsidiary of the Company. Each Stockholder signs
solely in his or her capacity as the beneficial owner of such Stockholder's
Shares and nothing herein shall limit or affect any actions taken by a
Stockholder in its capacity as an officer or director of the Company or any
subsidiary of the Company to the extent specifically permitted by the Merger
Agreement.
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12. Performance by Purchaser. Parent covenants and agrees for the
benefit of the Stockholders that it shall cause Purchaser to perform in full
each obligation of Purchaser set forth in this Agreement.
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 or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in the
State of Delaware or in any Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court located in the state
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby. The parties
irrevocably and unconditionally waive 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 courts of the State of Delaware or of the United
States of America located in the State of Delaware, and hereby further
irrevocably and unconditionally waive and agree 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 inconvenient forum.
IN WITNESS WHEREOF, each of Parent and Purchaser has caused this
Agreement to be signed by its officer or director thereunto duly authorized and
each Stockholder has signed this Agreement, all as of the date first written
above.
GEC INCORPORATED
By /s/ XXXXXXX XXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
GEC ACQUISITION CORP.
By /s/ XXXX XXXXXXX
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
and Secretary
STOCKHOLDERS
/s/ XXXXX X. XXXXXX
---------------------------------------
Xxxxx X. Xxxxxx
/s/ XXXXXXX X. XXXXXX, XX.
---------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ XXXXXX XXXXXXXX
---------------------------------------
Xxxxxx Xxxxxxxx
/s/ XXXXXXX XXXXXX
---------------------------------------
Xxxxxxx Xxxxxx
/s/ XXX XXXXXX
---------------------------------------
Xxx Xxxxxx
/s/ XXXXX X. XXXXX
---------------------------------------
Xxxxx X. Xxxxx
/s/ XXXXXX X. XXXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ K. XXXXX XXXXXXXX
---------------------------------------
K. Xxxxx Xxxxxxxx
/s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
/s/ XXXXXX X. XXXXXX
---------------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
ACKNOWLEDGED AND AGREED
TO AS TO SECTION 9:
TRACOR, INC.
By /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and
Chief Executive
Officer
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Schedule A
-----------
Total number Total number Total number
of shares of shares of shares
underlying underlying
stock options warrants
------------ ------------- ------------
Xxxxx X. Xxxxxx 43,364 663,700 4,000
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 15,046 6,000 N/A
The Carlyle Group
Suite 220 South
0000 Xxxxxxxxxxxx Xxx, X.X.
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 3,000 6,000 N/A
Davidson Enterprises
000 Xxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxx 13,000 6,000 X/X
Xxxxxxxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Xxx Xxxxxx 27,500 6,000 N/A
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Xxxxx X. Xxxxx 7,000 6,000 N/A
Xxxxx Best
0000 Xxx Xxxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx 7,000 6,000 N/A
Xxxxxxxx, Xxxxx and Xxxxxx, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
K. Xxxxx Xxxxxxxx 0 98,000 N/A
Tracor Systems Technologies, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx 1,887 99,000 N/A
Tracor Systems Technologies, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 12,600 119,400 N/A
Tracor Aerospace, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxx X. Xxxxxxxx 176,331 82,000 2,000
GDE System, Inc.
00000 X. Xxxxxxxx Xx.
Xxx Xxxxx, XX 00000
