STOCK OPTION AGREEMENT
THIS AGREEMENT is dated as of November 29, 1998, between Medtronic,
Inc., a Minnesota corporation ("Grantee"), and Arterial Vascular Engineering,
Inc., a Delaware corporation ("Issuer").
RECITALS
A. Grantee, Issuer, and MAV Merger Corp., a Delaware corporation and
wholly-owned subsidiary of Grantee ("Merger Subsidiary"), are entering into an
Agreement and Plan of Merger (the "Merger Agreement") which provides, among
other things, that, upon the terms and subject to the conditions thereof, Merger
Subsidiary will be merged with and into Issuer (the "Merger").
B. As a condition to its willingness to enter into the Merger
Agreement, Grantee has required that Issuer enter into this Agreement, which
provides, among other things, that Issuer grant to Grantee an option to purchase
shares of Issuer's Common Stock, $.001 par value ("Issuer Common Stock"), upon
the terms and subject to the conditions provided for herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained in this Agreement and the Merger Agreement, the parties
agree as follows:
1. Grant of Option. Subject to the terms and conditions of this
Agreement, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase 12,807,795 shares of Issuer Common Stock (the "Option Shares"), in
the manner set forth below, at an exercise price of $54.00 per share of Issuer
Common Stock, subject to adjustment as provided below (the "Option Price").
Issuer represents that the Option Shares represent at least 19.9% of the number
of shares of Issuer Common Stock outstanding on the date hereof. Capitalized
terms used herein but not defined herein shall have the meanings set forth in
the Merger Agreement.
2. Exercise of Option.
(a) Subject to the terms and conditions of this Agreement,
Grantee or its designee (which shall be a wholly-owned subsidiary of
Grantee) may, prior to the Expiration Date (as defined in Section 12
hereof), exercise the Option, in whole or in part, at any time or from
time to time on or after the occurrence of an Exercise Event (as
defined below). As used herein, an "Exercise Event" shall mean (i) the
occurrence of a termination specified in Section 7.2(a)(i) of the
Merger Agreement or (ii) the occurrence of all of the events and
circumstances specified in clauses (A), (B) and (C) of Section
7.2(a)(ii) of the Merger Agreement; provided, however, that
notwithstanding anything to the contrary contained in this Agreement,
if the Option becomes exercisable as a result of the Exercise Event
referred to in Section 2(a)(ii) hereof, Grantee shall not be entitled
to exercise the cancellation right referred to below in this Section
2(a) unless and until all of
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the events and circumstances specified in clauses (A), (B), (C) and (D)
of Section 7.2(a)(ii) of the Merger Agreement shall have occurred.
(b) In the event Grantee wishes to exercise the Option at such
time as the Option is exercisable, Grantee shall deliver written notice
(the "Exercise Notice") to Issuer exercising the Option and specifying
the total number of Option Shares it wishes to purchase, and a date and
time for the closing of such purchase (a "Closing") not less than five
nor more than 30 business days after the later of (i) the date such
Exercise Notice is given and (ii) the expiration or termination of any
applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). Subject to the
proviso at the end of Section 2(a) hereof, when this Option is
exercisable, Grantee, in lieu of exercising the Option, shall have the
right at any time thereafter prior to the Expiration Date to request in
writing that Issuer pay, and promptly (but in any event not more than
five business days) after Grantee makes such request, Issuer shall,
subject to Section 2(c) below, pay to Grantee by certified check,
official bank check or wire transfer pursuant to Grantee's
instructions, in cancellation of the Option, an amount in cash (the
"Cancellation Amount") equal to (i) the greater of
(x) the excess, if any, over the Option Price of the
greater of (A) the last sale price of a share of Issuer Common
Stock as reported on the Nasdaq National Market (or other
United State national exchange upon which Issuer's Common
Stock is traded) on the last trading day prior to the date of
the Exercise Notice, (B) the highest price per share of Issuer
Common Stock offered to be paid or paid in connection with any
Alternative Transaction occurring after the date hereof and
prior to the Expiration Date, and (C) in the case of any
Alternative Transaction structured as an asset acquisition,
the highest net consideration to be distributed to the
stockholders of the Company in any such transaction or
proposed transaction occurring after the date hereof and prior
to the Expiration Date after, among any other payments and
deductions, payment of all indebtedness of the Company not
being assumed, divided by the number of shares of Issuer
Common Stock outstanding on a fully diluted basis, and
(y) $150,000,000 divided by the initial number of
Option Shares covered by the Option,
multiplied by (ii) the number of Option Shares then covered by the
Option; provided, however, that the Cancellation Amount shall be
reduced (but not below zero) to the extent necessary so that the sum of
the termination fee described in Section 7.2(a) of the Merger Agreement
(the "Termination Fee") paid to Grantee, the Option Share Profit (as
defined below) not remitted to Issuer pursuant to Section 2(c) hereof,
the Section 5 Repurchase Consideration (as defined below) paid to
Grantee and the Cancellation Amount shall not exceed $150,000,000. If
all or a portion of the price per share of Issuer Common Stock offered,
paid, or payable or the aggregate consideration offered, paid, or
payable for the assets of Issuer, each as contemplated by the preceding
sentence, consists of noncash consideration, such price or aggregate
consideration shall be the cash
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consideration, if any, plus the fair market value of the noncash
consideration as mutually determined by the investment bankers of
Issuer and the investment bankers of Grantee. In no event shall (i) the
Cancellation Amount exceed $150,000,000 or (ii) the sum of the
Termination Fee paid, the Option Share Profit not remitted to Issuer
pursuant to Section 2(c) hereof, the Section 5 Repurchase Consideration
paid and the Cancellation Amount paid exceed $150,000,000.
(c) In the event that Grantee at any time sells, pledges, or
otherwise disposes of (including, without limitation, by merger or
exchange) any of the Option Shares (a "Sale"), or in the event that any
Cancellation Amount or Section 5 Repurchase Consideration is paid to
Grantee or any Option Share Profit is received by Grantee (and not
required to be remitted to Issuer pursuant to this Section 2(c)), then
any Termination Fee due and payable by Issuer shall be reduced to the
extent necessary so that the sum of
(v) the Termination Fee;
(w) any Cancellation Amount paid to Grantee;
(x) any Section 5 Repurchase Consideration paid to
Grantee;
(y) the amount received (whether in cash, loan
proceeds, securities, or otherwise) by Grantee in such Sale
less the exercise price of such Option Shares sold in the Sale
(the "Option Share Profit") and not remitted to Issuer
pursuant to this Section 2(c); and
(z) Option Share Profit received in connection with
any prior sales of Option Shares and not remitted to Issuer
pursuant to this Section 2(c),
shall not exceed $150,000,000. Grantee shall remit to Issuer, within
ten business days after completion of any Sale, the amount, if any, by
which the Option Share Profit from such Sale which, when added to the
Termination Fee previously paid, the Cancellation Amount previously
paid, the Section 5 Repurchase Consideration previously paid and the
Option Share Profit from prior sales of Option Shares not remitted to
Issuer pursuant to this Section 2(c), exceeds $150,000,000.
3. Payment of Option Price and Delivery of Certificate. Any Closings
under Section 2 hereof shall be held at the principal executive offices of
Issuer, or at such other place as Issuer and Grantee may agree. At any Closing
hereunder, (a) Grantee or its designee will make payment to Issuer of the
aggregate price for the Option Shares being so purchased by delivery of a
certified check, official bank check, or wire transfer of funds pursuant to
Issuer's instructions payable to Issuer in an amount equal to the product
obtained by multiplying the Option Price by the number of Option Shares to be
purchased, and (b) upon receipt of such payment (and the satisfaction or waiver
of the conditions set forth in Section 10 hereof) Issuer will deliver to Grantee
or its designee (which shall be a wholly-owned subsidiary of Grantee) a
certificate or certificates representing the number of validly issued, fully
paid, and nonassessable Option
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Shares so purchased, in the denominations and registered in such names (which
shall be Grantee or a wholly-owned subsidiary of Grantee) designated in writing
to Issuer by Grantee.
4. Registration and Listing of Option Shares.
(a) Issuer agrees to use commercially reasonable efforts to
(i) effect as promptly as possible upon the request of Grantee and (ii)
cause to become and remain effective for a period of not less than six
months (or such shorter period as may be necessary to effect the
distribution of any Option Shares specified in such request) the
registration under the 1933 Act, and any applicable state securities
laws, of the resale of all or any part of the Option Shares as may be
specified in such request; provided, however, that (A) Grantee shall
have the right to select the managing underwriter for any such offering
after consultation with Issuer, which managing underwriter shall be
reasonably acceptable to Issuer, (B) Grantee shall not be entitled to
more than two effective registration statements hereunder, and (C)
Grantee shall not be entitled to request such a registration statement
within a period of one year after the effective date of a registration
statement in which Grantee included or was entitled to include all or a
portion of the Option Shares. The obligations of Issuer hereunder to
file a registration statement and to maintain its effectiveness may be
suspended for one or more periods of time not exceeding 90 days in the
aggregate in any one year period if the Board of Directors of Issuer
shall have determined in good faith that the filing of such
registration or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect Issuer. Upon receipt of notice of the happening of any event as
a result of which any registration statement, prospectus, prospectus
supplement, or any document incorporated by reference in any of the
foregoing, contains any untrue statements of material fact or fails or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, Grantee shall forthwith
discontinue the disposition of any shares under such registration
statement, prospectus or prospectus supplement until Grantee receives
from Issuer copies (which subject to the limitations on suspension set
forth above shall promptly be made available by Issuer) of an amended
or supplemented registration statement, prospectus or supplement so
that, as thereafter delivered to purchases of such shares, such
registration statement, prospectus or prospectus supplement shall not
contain any untrue statement of material fact or fail or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
are made, not misleading.
(b) In addition to such demand registrations, if Issuer
proposes to effect a registration of Issuer Common Stock for its own
account or for the account of any other stockholder of Issuer (other
than in connection with (i) employee stock option plans or other
employee or consultant benefit arrangements or (ii) corporate or
business acquisitions), Issuer will give prompt written notice to
Grantee of its intention to do so and shall use commercially reasonable
efforts to include therein all Option Shares
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requested by Grantee to be so included; provided, however, that, if the
managing underwriter of the offering covered by such registration
advises Issuer that in its opinion the number of Option Shares
requested to be included in such registration exceeds the number that
can be sold in such offering, Issuer shall, after fully including
therein all securities to be sold by Issuer, include the shares
requested to be included therein by Grantee pro rata (based on the
number of shares intended to be included therein) with the shares
intended to be included therein by persons other than Issuer. In
connection with any offering, sale and delivery of Option Shares
pursuant to a registration statement effected pursuant to this Section
4(b), Grantee shall provide Issuer and each underwriter of the offering
with customary representations, warranties and covenants. No
registration effected under this Section 4(b) shall relieve Issuer of
its obligations to effect demand registrations under Section 4(a)
hereof.
(c) Registrations effected under this Section 4 shall be
effected at Issuer's expense, including the fees and expenses of
counsel to Grantee, but excluding underwriting discounts and
commissions to brokers or dealers. In connection with each registration
under this Section 4, Issuer shall indemnify and hold Grantee, its
underwriters, and each of their respective affiliates harmless against
any and all losses, claims, damage, liabilities, and expenses
(including, without limitation, investigation expenses and fees and
disbursements of counsel and accountants), joint or several, to which
Grantee, its underwriters, and each of their respective affiliates may
become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, liabilities, or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
registration statement (including any prospectus therein), or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, other than such losses, claims, damages, liabilities, or
expenses (or actions in respect thereof) that arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in written information furnished by Grantee to Issuer
expressly for use in such registration statement.
(d) In connection with any registration statement pursuant to
this Section 4, Grantee agrees to furnish Issuer with such information
concerning itself and the proposed sale or distribution as shall
reasonably be required in order to ensure compliance with the
requirements of the 1933 Act. In addition, Grantee shall indemnify and
hold Issuer, its underwriters and each of their respective affiliates
harmless against any and all losses, claims, damages, liabilities, and
expenses (including, without limitation, investigation expenses and
fees and disbursements of counsel and accountants), joint or several,
to which Issuer, its underwriters, and each of their respective
affiliates may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages, liabilities, or expenses (or actions
in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in written
information furnished by Grantee to Issuer expressly for use in such
registration statement.
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(e) Upon the issuance of Option Shares hereunder, Issuer will
use commercially reasonable efforts promptly to cause such Option
Shares to be quoted on Nasdaq or on such national or other exchange on
which the shares of Issuer Common Stock are at the time listed or
quoted.
5. Repurchase at the Option of Issuer.
(a) At the request of Issuer at any time during the 180-day
period commencing on the 180th day after the date on which the Option
was first exercised in whole or in part (the "Call Period"), Issuer may
repurchase from Grantee, and Grantee shall sell to Issuer, up to 95% of
the shares of Issuer Common Stock acquired by Grantee pursuant hereto
and with respect to which Grantee has beneficial ownership at the time
of such repurchase at a price per share equal to the Repurchase Price
(defined below) per share in respect of the shares so acquired (such
price per share multiplied by the number of shares of Issuer Common
Stock to be repurchased pursuant to this Section 5 being herein called
the "Section 5 Repurchase Consideration"). The date on which Issuer
exercises its rights under this Section 5 by delivering its request to
Grantee is referred to as the "Issuer Request Date." Issuer's rights
under this Section 5 shall be suspended (and the Call Period shall be
extended accordingly) during any period when the exercise of such
rights would subject Grantee to liability pursuant to Section 16(b) of
the Exchange Act by reason of the issuance of the Option, any
adjustment pursuant to Section 11 hereof, or the Grantee's purchase of
any Option Shares hereunder. "Repurchase Price" per share shall be the
sum of (i) the Option Price plus (ii) the amount that results from
dividing (A) $150,000,000 minus the sum of (I) any Termination Fee paid
to Grantee, (II) any Option Share Profit not remitted to Issuer
pursuant to Section 2(c) hereof, (III) any Section 5 Repurchase
Consideration paid to Grantee pursuant to this Section 5 plus (IV) any
Cancellation Amount paid to Grantee by (B) the initial number of Option
Shares covered by the Option, provided, however, that notwithstanding
anything to the contrary contained in this Agreement, if the Option
becomes exercisable as a result of the Exercise Event referred to in
Section 2(a)(ii) hereof, the Repurchase Price shall be equal to the
Option Price if the repurchase of shares pursuant to this Section 5 is
completed before the occurrence of the event specified in clause (D) of
Section 7.2(a)(ii) of the Merger Agreement.
(b) The Section 5 Repurchase Consideration to be paid in
connection with any repurchase request shall be reduced to the extent
necessary so that the sum of
(v) the Section 5 Repurchase Consideration to be paid
in the repurchase which is the subject of Issuer's repurchase
request at issue;
(w) any Section 5 Repurchase Consideration previously
paid;
(x) any Cancellation Amount paid to Grantee;
(y) any Termination Fee paid to Grantee; and
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(z) any Option Share Profit not remitted to Issuer
pursuant to Section 2(c),
shall not exceed $150,000,000.
(c) If Issuer exercises its rights under this Section 5,
Issuer shall, within five business days after the Issuer Request Date,
pay the Section 5 Repurchase Consideration, subject to reduction as
provided in Section 5(b) above, in immediately available funds, and
Grantee shall surrender to Issuer certificates evidencing the shares of
Issuer Common Stock purchased hereunder, and Grantee shall warrant to
Issuer that, immediately prior to the repurchase thereof pursuant to
this Section 5, Grantee had sole record and beneficial ownership of
such shares and that such shares were then held free and clear of all
Encumbrances.
6. Representations and Warranties of Issuer. Issuer hereby represents
and warrants to Grantee as follows:
(a) Issuer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to enter into and perform
this Agreement.
(b) The execution and delivery of this Agreement by Issuer and
the consummation by Issuer of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of Issuer,
and except to the extent of any Nasdaq requirements, no other corporate
proceedings on the part of Issuer are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. The
Board of Directors of Issuer has duly approved the issuance and sale of
the Option Shares, upon the terms and subject to the conditions
contained in this Agreement, and the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by Issuer and, assuming this Agreement has been duly and
validly authorized, executed, and delivered by Grantee, constitutes a
valid and binding obligation of Issuer enforceable against Issuer in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting or relating
to creditors, rights generally; the availability of injunctive relief
and other equitable remedies and general principles of equity; and
limitations imposed by law on indemnification for liability under
federal securities laws.
(c) Except as may be required in accordance with Nasdaq
requirements, Issuer has taken all necessary action to authorize and
reserve for issuance and to permit it to issue, and at all times from
the date of this Agreement through the date of expiration of the Option
will have reserved for issuance upon exercise of the Option, such
number of authorized shares of Issuer Common Stock as is equal to the
number of Option Shares (or such other amount as may be required
pursuant to Section 11 hereof), each of which, upon issuance pursuant
to this Agreement and when paid for as provided herein, will be
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validly issued, fully paid, and nonassessable, and shall be delivered
free and clear of all claims, liens, charges, encumbrances, and
security interests and not subject to any preemptive rights
(collectively, "Encumbrances").
(d) Except as may be required in accordance with Nasdaq
requirements, the execution, delivery, and performance of this
Agreement by Issuer and the consummation by it of the transactions
contemplated hereby except as required by the HSR Act (if applicable),
and, with respect to Section 4, compliance with the provisions of the
1933 Act and any applicable state securities laws, do not require the
consent, waiver, approval, license, or authorization of or result in
the acceleration of any obligation under, or constitute a default
under, any term, condition, or provision of any charter or bylaw, or
any indenture, mortgage, lien, lease, agreement, contract, instrument,
order, judgment, ordinance, regulation, or decree or any restriction to
which Issuer or any property of Issuer or its subsidiaries is bound,
except where the failure to obtain such consents, waivers, approvals,
licenses, or authorizations or where such acceleration or defaults
could not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(e) The Company has taken all action and completed all
amendments, if any, necessary or appropriate so that (i) the Rights
Agreement dated as of February 26, 1997, as amended, between the
Company and BankBoston, N.A. (the "Company Rights Agreement"), is
inapplicable to the transactions contemplated by this Agreement, the
Agreements to Facilitate Merger, and the Merger Agreement, and (ii) the
execution of this Agreement, the Agreements to Facilitate Merger, and
the Merger Agreement, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (w) result in
Grantee being an "Acquiring Person" (as such term is defined in the
Company Rights Agreement), (x) result in the ability of any person to
exercise any Rights under the Company Rights Agreement, (y) enable or
require the Rights to separate from the shares of Company Common Stock
to which they are attached or to be triggered or become exercisable, or
(z) otherwise result in the occurrence of a "Distribution Date" or
"Shares Acquisition Date" (as such terms are defined in the Company
Rights Agreement).
7. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Minnesota and has
all requisite corporate power and authority to enter into and perform
this Agreement.
(b) The execution and delivery of this Agreement by Grantee
and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Grantee, and
no other corporate proceedings on the part of Grantee are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed
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and delivered by Grantee and, assuming this Agreement has been duly
executed and delivered by Issuer, constitutes a valid and binding
obligation of Grantee enforceable against Grantee in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting or relating to creditors'
rights generally; the availability of injunctive relief and other
equitable remedies; and limitations imposed by law on indemnification
for liability under federal securities laws.
(c) Grantee or its designee is acquiring the Option and it
will acquire the Option Shares issuable upon the exercise thereof for
its own account and not with a view to the distribution or resale
thereof in any manner not in accordance with applicable law.
8. Covenants of Grantee. Grantee agrees not to transfer or otherwise
dispose of the Option or the Option Shares, or any interest therein, except in
compliance with the 1933 Act and any applicable state securities law. Grantee
further agrees to the placement of the following legend on the certificates
representing the Option Shares (in addition to any legend required under
applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER EITHER (1) THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR (2) ANY APPLICABLE STATE LAW GOVERNING
THE OFFER AND SALE OF SECURITIES. NO TRANSFER OR OTHER
DISPOSITION OF THESE SHARES, OR OF ANY INTEREST THEREIN, MAY
BE MADE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND SUCH OTHER STATE LAWS OR PURSUANT TO
EXEMPTIONS FROM REGISTRATION UNDER THE ACT, SUCH OTHER STATE
LAWS, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER."
9. Commercially Reasonable Efforts. Grantee and Issuer shall take, or
cause to be taken, all reasonable action to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
commercially reasonable efforts to obtain any necessary consents of third
parties and governmental agencies (including, without limitation, compliance
with any Nasdaq approvals or requirements) and the filing by Grantee and Issuer
promptly after the date hereof of any required HSR Act notification forms and
the documents required to comply with the HSR Act.
10. Certain Conditions. The obligation of Issuer to issue Option Shares
at a Closing under this Agreement after exercise of the Option shall be subject
to the satisfaction or waiver of the following conditions:
(a) any waiting periods applicable to the acquisition of the
Option Shares by Grantee pursuant to this Agreement under the HSR Act
shall have expired or been terminated;
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(b) the representations and warranties of Grantee made in
Section 6 of this Agreement shall be true and correct in all material
respects as of the date of the Closing for the issuance of such Option
Shares;
(c) no order, decree, or injunction entered by any court of
competent jurisdiction or governmental, regulatory, or administrative
agency or commission in the United States shall be in effect that
prohibits the exercise of the option or acquisition of Option Shares
pursuant to this Agreement; and
(d) compliance with any Nasdaq approvals or requirements.
11. Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Issuer Common Stock by
reason of any stock dividend, stock split, recapitalization, merger, rights
offering, share exchange, or other change in the corporate or capital structure
of Issuer, Grantee shall receive, upon exercise of the Option, the stock or
other securities, cash, or property to which Grantee would have been entitled if
Grantee had exercised the Option and had been a holder of record of shares of
Issuer Common Stock on the record date fixed for determination of holders of
shares of Issuer Common Stock entitled to receive such stock or other
securities, cash, or property at the same aggregate price as the aggregate
Option Price of the Option Shares.
12. Expiration. The Option shall expire at the earlier of (a) the
Effective Time (as defined in the Merger Agreement), (b) one year after the
termination of the Merger Agreement in accordance with the terms thereof in the
event Section 7.2(a)(i) of the Merger Agreement applies, or one year after the
event specified in Section 7.2(a)(ii)(D) of the Merger Agreement occurs in the
event such Section 7.2(a)(ii) applies, or (c) termination of the Merger
Agreement in accordance with the terms thereof in circumstances under which the
fee specified in Section 7.2 thereof cannot in any circumstances become payable
(such expiration date is referred to as the "Expiration Date").
13. General Provisions.
(a) Survival. All of the representations, warranties, and
covenants contained herein shall survive each Closing and shall be
deemed to have been made as of the date hereof and as of the date of
each Closing.
(b) Further Assurances. If Grantee exercises the Option, or
any portion thereof, in accordance with the terms of this Agreement,
Issuer and Grantee will execute and deliver all such further documents
and instruments and use commercially reasonable efforts to take all
such further action as may be necessary in order to consummate the
transactions contemplated thereby.
(c) Severability. It is the desire and intent of the parties
that the provisions of this Agreement be enforced to the fullest extent
permissible under the law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, in the
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event that any provision of this Agreement would be held in any
jurisdiction to be invalid, prohibited, or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not be invalid, prohibited, or unenforceable
in such jurisdiction, it shall, as to such jurisdiction, be so narrowly
drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any
other jurisdiction.
(d) Assignment. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that Issuer shall not be entitled to
assign or otherwise transfer any of its rights or obligations
hereunder, and Grantee shall not be entitled to assign or otherwise
transfer the Option or any of its rights or obligations hereunder.
(e) Specific Performance. The parties agree and acknowledge
that in the event of a breach of any provision of this Agreement, the
aggrieved party would be without an adequate remedy at law. The parties
therefore agree that in the event of a breach of any provision of this
Agreement, the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of such provision, as
well as to obtain damages for breach of this Agreement. By seeking or
obtaining any such relief, the aggrieved party will not be precluded
from seeking or obtaining any other relief to which it may be entitled.
(f) Amendments. This Agreement may not be modified, amended,
altered, or supplemented except upon the execution and delivery of a
written agreement executed by Grantee and Issuer.
(g) Notices. All notices, requests, claims, demands, and other
communications hereunder shall be in writing and shall be deemed to be
sufficient if contained in a written instrument and shall be deemed
given if delivered personally, telecopied, sent by
nationally-recognized overnight courier or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the
other party at the following addresses (or such other address for a
party as shall be specified by like notice):
If to Grantee:
Medtronic, Inc.
0000 Xxxxxxx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000
with separate copies thereof addressed to
Attention: General Counsel
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FAX: (000) 000-0000
and
Attention: Vice President and Chief Development
Officer
FAX: (000) 000-0000
If to Issuer:
Arterial Vascular Engineering, Inc.
0000 Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
FAX: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
FAX: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq. and
Xxxxxxx X. Xxxxxx, Esq.
(h) Headings. 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.
(i) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
(j) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed therein.
(k) Entire Agreement. This Agreement, the Confidentiality
Agreement, and the Merger Agreement and any documents and instruments
referred to herein and therein constitute the entire agreement between
the parties hereto and thereto with respect to the subject matter
hereof and thereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect
to the subject matter hereof and thereof. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the
successors and permitted assigns of the parties hereto. Nothing in this
Agreement shall be construed to give any person other than the parties
to this
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Agreement or their respective successors or permitted assigns any legal
or equitable right, remedy, or claim under or in respect of this
Agreement or any provision contained herein.
(l) Expenses. Except as otherwise provided in this Agreement
or the Merger Agreement, each party shall pay its own expenses incurred
in connection with this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Stock Option Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.
MEDTRONIC, INC.
By: ____________________________________
Its: ___________________________________
ARTERIAL VASCULAR ENGINEERING, INC.
By: ____________________________________
Its: ___________________________________
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