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EXHIBIT 10.38
EXHIBIT B
19.9% STOCK OPTION AGREEMENT
19.9% STOCK OPTION AGREEMENT, dated as of December 3, 1998 (the
"AGREEMENT"), between FEI Company, an Oregon corporation ("PARENT"), and Micrion
Corporation, a Massachusetts corporation (the "COMPANY").
WHEREAS, Parent, MC Acquisition Corporation, an Oregon corporation and a
wholly owned subsidiary of Parent ("NEWCO"), and the Company are
contemporaneously herewith entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "MERGER AGREEMENT"), which provides, among other
things, for the merger of the Company with Newco (the "MERGER");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Newco have requested that the Company grant to Parent an
option to purchase shares of Common Stock, no par value, of the Company (the
"COMMON STOCK"), upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce Parent and Newco to enter into the Merger
Agreement, the Company is willing to grant Parent the requested option and the
Board of Directors of the Company has approved the granting of such option and
authorized the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. THE OPTION; EXERCISE; ADJUSTMENTS; PAYMENT OF SPREAD. On the terms and
subject to the conditions set forth herein, the Company hereby grants to Parent
an irrevocable option (the "OPTION") to purchase up to 810,805 shares of Common
Stock (the "SHARES") at a cash purchase price per Share equal to the value of
the Merger Consideration (as defined in the Merger Agreement), the stock
component of which will be valued as the average of the closing prices of Parent
Common Stock as quoted on the Nasdaq National Market and reported in THE WALL
STREET JOURNAL for the five consecutive trading days immediately preceding and
including the date of announcement by Parent of the execution of the Merger
Agreement (the "Purchase Price"). The Option may be exercised by Parent, in
whole or in part, at any time, or from time to time, following the occurrence of
one of the events set forth in Section 5.5.2(i) of the Merger Agreement, the
termination by Parent of the Merger Agreement pursuant to Section 5.4(a) or (d)
thereof or because of a breach of Section 3.2 by the Company, or the termination
of the Merger Agreement by the Company pursuant to Section 5.3(b) thereof, in
each case prior to the termination of the Option in accordance with the terms of
this Agreement.
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(b) In the event Parent wishes to exercise the Option, Parent shall
send a written notice to the Company (the "STOCK EXERCISE NOTICE") specifying a
date for the closing of such purchase (subject to the HSR Act (as defined below)
and obtaining other applicable regulatory approvals and the satisfaction of the
conditions set forth in Section 2 below) not earlier than two business days
following the date the Stock Exercise Notice is given. In the event of any
change in the number of issued and outstanding shares of Common Stock by reason
of any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Shares subject to this Option and the Purchase Price shall be appropriately
adjusted to restore Parent to its rights hereunder, including its right to
purchase Shares representing 19.9% of the capital stock of the Company entitled
to vote generally for the election of the directors of the Company which is
issued and outstanding immediately prior to the exercise of the Option at an
aggregate purchase price equal to the Purchase Price multiplied by 810,805.
(c) At any time after the Option is exercisable pursuant to the
terms of Section 1(a) hereof, Parent may elect, in lieu of purchasing the Shares
hereunder, to receive from the Company an amount in cash (the "CASH AMOUNT")
equal to the Spread (as hereinafter defined) multiplied by all or such portion
of the Shares subject to the Option as Parent shall specify in a written notice
to the Company (the "CASH EXERCISE NOTICE") specifying a date not later than 20
business days and not earlier than five business days following the date the
Cash Exercise Notice is given on which the Company shall pay to Parent such Cash
Amount. As used herein "SPREAD" shall mean the excess, if any, over the Purchase
Price of the higher of (x) if applicable, the highest price per share of Common
Stock (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid or proposed to be paid by any person pursuant to a Takeover
Proposal (as defined in the Merger Agreement) (the "ALTERNATIVE PURCHASE PRICE")
and (y) the closing price of the shares of Common Stock as quoted on the Nasdaq
National Market and reported in THE WALL STREET JOURNAL on the last trading day
prior to the date of the Cash Exercise Notice (the "CLOSING PRICE"). If the
Alternative Purchase Price can be calculated by reference only to a cash amount
paid or proposed to be paid for any shares of Common Stock outstanding, such
cash amount shall be deemed to be the Alternative Purchase Price; if, in the
case of clause (x) above, no shares of Common Stock will be purchased only for
cash, the Alternative Purchase Price shall be the sum of (i) the fixed cash
amount, if any, included in the Alternative Purchase Price plus (ii) the fair
market value of such property other than cash included in the Alternative
Purchase Price. If, in the case of clause (x) above, such other property
consists of securities with an existing public trading market, the average of
the closing prices (or the average of the closing bid and asked prices if
closing prices are unavailable) for such securities in their principal public
trading market on the five trading days ending one day prior to the date of the
Cash Exercise Notice shall be deemed to equal the fair market value of such
property. If such other property consists of something other than cash or
securities with an existing public trading market and, as of the payment date
for the Spread, agreement by the parties hereto on the value of such other
property has not been reached, the Alternative Purchase Price shall be deemed to
equal the Closing Price. Upon Parent's receipt of the Cash Xxxxxx,
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Parent shall not have the right to receive the Shares for which Parent shall
have elected to be paid the Spread.
2. CONDITIONS TO DELIVERY OF SHARES. The Company's obligation to deliver
Shares upon exercise of the Option is subject only to the conditions that:
(a) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the exercise of the Option and/or the delivery of the Shares
shall be in effect;
(b) Any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, (the "HSR ACT") and under
any applicable foreign pre-merger notification or similar laws shall have
expired or been terminated; and
(c) Parent or Newco has not materially breached a representation,
warranty or covenant contained in the Merger Agreement; provided that this
subsection (c) shall be a condition to the Company's obligation to deliver
the Shares upon exercise of the Option only if the Company terminated the
Merger Agreement as a result of such breach.
3. THE CLOSING. (a) Any closing hereunder shall take place on the date
specified by Parent in its Stock Exercise Notice or Cash Exercise Notice, as the
case may be, at 9:00 A.M., local time, at the offices of Stoel Rives LLP, 000 XX
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000, or, if Shares are to be
delivered and the conditions set forth in Section 2 have not then been
satisfied, on the second business day following the satisfaction of such
conditions, or at such other time and place as the parties hereto may agree in
writing (the "CLOSING DATE"). On the Closing Date, (i) in the event of a closing
pursuant to Section 1(b) hereof, the Company shall deliver to Parent a
certificate or certificates, representing the Shares in the denominations
designated by Parent in its Stock Exercise Notice and Parent shall purchase such
Shares from the Company at the Purchase Price or (ii) in the event of a closing
pursuant to Section 1(c) hereof, the Company shall deliver to Parent the Cash
Amount. Any payment made by Parent to the Company, or by the Company to Parent,
pursuant to this Agreement shall be made by certified or official bank check or
by wire transfer of federal funds to a bank designated by the party receiving
such funds.
(b) The certificates representing the Shares shall bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Parent that (a) the Company is a corporation duly organized,
validly existing and
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in good standing under the laws of the Commonwealth of Massachusetts and has the
requisite corporate power and authority to enter into and perform this
Agreement; (b) the execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and this Agreement has been
duly executed and delivered by a duly authorized officer of the Company and
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; (c)
the Company has taken all necessary corporate action to authorize and reserve
the Shares issuable upon exercise of the Option, and the Shares, when issued and
delivered by the Company upon exercise of the Option and paid for by Parent as
contemplated hereby, will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights; (d) except as otherwise may be
required by the HSR Act and other applicable foreign pre-merger or similar laws,
the execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby do not require the consent,
waiver, approval or authorization of or any filing with any person or public
authority and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of the Company's
articles of organization or bylaws, or any indenture, mortgage, lien, lease,
agreement, contract, instrument, order, law, rule, regulation, judgment,
ordinance, or decree, or restriction by which the Company or any of its
subsidiaries or any of their respective properties or assets is bound; (e) no
restrictive provision of any "fair price," "moratorium," "control share
acquisition," or other form of antitakeover statute or regulation, including,
without limitation, the provisions of Chapter 110C and Chapter 110D of the
Massachusetts Corporation-Related Laws, or similar provision contained in the
charter or bylaws of the Company, is or shall be applicable to the acquisition
of Shares by Parent pursuant to this Agreement; and (f) the Company has taken
all corporate action necessary so that the rights issuable pursuant to the
Rights Agreement (as defined in the Merger Agreement) will not separate from the
Shares or otherwise became exercisable, as a result of entering into this
Agreement, the Merger Agreement, or consummating the Merger and/or the other
transactions contemplated hereby and thereby.
5. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and warrants
to the Company that: (a) Parent is a corporation legally existing under the laws
of the State of Oregon and has the requisite corporate power and authority to
enter into and perform this Agreement; (b) the execution and delivery of this
Agreement by Parent and the consummation by it of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Parent and this
Agreement has been duly executed and delivered by a duly authorized officer of
Parent and constitutes a valid and binding obligation of Parent, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
(c) Parent is acquiring the Option and, if and when it exercises the Option,
will be acquiring the Shares issuable upon
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the exercise thereof for its own account and not with a view to distribution or
resale in any manner which would be in violation of the Securities Act or
applicable state securities laws.
6. LISTING OF SHARES; FILINGS; GOVERNMENTAL CONSENTS. Subject to applicable
law and the rules and regulations of the Nasdaq National Market, the Company
shall promptly after receipt of Stock Exercise Notice file a notification form
for listing of additional shares to list the Shares on the Nasdaq National
Market and shall use its reasonable best efforts to obtain approval of such
listing and to effect all necessary filings by the Company under the HSR Act;
PROVIDED, HOWEVER, that if the Company is unable to effect such listing on the
Nasdaq National Market by the Closing Date, the Company shall nevertheless be
obligated to deliver the Shares upon the Closing Date and to continue diligently
to pursue listing of the Shares on the Nasdaq National Market. Each of the
parties hereto shall use its reasonable best efforts to obtain consents of all
third parties and governmental authorities necessary to the consummation of the
transactions contemplated.
7. REGISTRATION RIGHTS. (a) In the event that Parent shall desire to sell
any of the Shares within three years after the purchase of such Shares pursuant
hereto, and such sale requires, in the opinion of counsel to Parent, which
opinion shall be reasonably satisfactory to the Company and its counsel,
registration of such Shares under the Securities Act, the Company shall
cooperate with Parent and any underwriters in registering such Shares for
resale, including, without limitation, promptly filing a registration statement
which complies with the requirements of applicable federal and state securities
laws, and entering into an underwriting agreement with such underwriters upon
such terms and conditions as are customarily contained in underwriting
agreements with respect to secondary distributions; provided that the Company
shall not be required to have declared effective more than two registration
statements hereunder and shall be entitled to delay the filing or effectiveness
of any registration statement for up to 60 days if the offering would, in the
judgment of the Board of Directors of the Company, require premature disclosure
of any material corporate development or material transaction involving the
Company or interfere with any pending or proposed securities offering by the
Company.
(b) If the Common Stock is registered pursuant to the provisions of
this Section 8, the Company agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as Parent may from time to time reasonably request and (ii) if any event
shall occur as a result of which it becomes necessary to amend or supplement any
registration statement or prospectus, to prepare and file under the applicable
securities laws such amendments and supplements as may be necessary to keep
available for at least 90 days a prospectus covering the Common Stock meeting
the requirements of such securities laws, and to furnish Parent such numbers of
copies of the registration statement and prospectus as amended or supplemented
as may reasonably be requested. The Company shall bear the cost of the
registration, including, but not limited to, all registration and filing fees,
printing expenses, and fees and disbursements of counsel and accountants for the
Company, except that Parent shall pay the fees and disbursements of its counsel,
and the underwriting fees and selling commissions applicable to
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the shares of Common Stock sold by Parent. Company shall indemnify and hold
harmless (i) Parent, its affiliates and its officers and directors and (ii) each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended
(collectively, the "UNDERWRITERS") ((i) and (ii) being referred to as
"INDEMNIFIED PARTIES") against any losses, claims, damages, liabilities or
expenses, to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
registration statement filed pursuant to this paragraph, 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; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any such documents in reliance upon and
in conformity with written information furnished to the Company by the
Indemnified Parties expressly for use or incorporation by reference therein; and
PROVIDED FURTHER that as to any preliminary prospectus, prospectus or any
amendment or supplement thereto, this indemnity agreement shall not inure to the
benefit of any Indemnified Party on account of any loss, claim, damage,
liability or expense arising from the fact that such Indemnified Party sold
Common Stock to a person as to whom it shall be established that there was not
sent or given, at or prior to such sale, a copy of the prospectus covering such
Common Stock, as then amended or supplemented in any case where such delivery is
required by the Securities Act and the loss, claim, damage, liability or expense
results from an untrue statement or omission of a material fact contained in
such preliminary prospectus, prospectus or amendment or supplement thereto which
was corrected in the prospectus as then amended or supplemented. As used in this
Agreement, "PERSON" shall have the meaning specified in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended. Each Indemnified
Party shall give notice to the Company promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought and shall
permit the Company to assume the defense of any such claim or litigation
resulting therefrom. If within 15 days after receipt of such notice from an
Indemnified Party the Company does not notify the Indemnified Party that the
Company will assume defense of such claim, the Indemnified Party may elect to
control the conduct and settlement of such action and all reasonable costs of
defending such action shall be indemnified under this Section 7(b). No
Indemnified Party shall consent to entry of any judgment or settle such claim or
litigation without the prior written consent of the Company, unless the Company
has failed to assume control of the conduct of such claim as described in the
foregoing sentence.
(c) Parent and the Underwriters shall indemnify and hold harmless
the Company, its affiliates and its officers and directors against any losses,
claims, damages, liabilities or expenses to which the Company, its affiliates
and its officers and directors may become subject, insofar as such losses,
claims, damages, liabilities (or actions in respect thereof) and expenses arise
out of or are based upon any untrue statement of any material fact contained or
incorporated by reference in any registration statement filed pursuant to this
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paragraph, 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, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by Parent or the Underwriters, as
applicable, specifically for use or incorporation by reference therein.
8. EXPENSES. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise specifically provided
herein.
9. SPECIFIC PERFORMANCE. The Company acknowledges that if the Company fails
to perform any of its obligations under this Agreement immediate and irreparable
harm or injury would be caused to Parent for which money damages would not be an
adequate remedy. In such event, the Company agrees that Parent shall have the
right, in addition to any other rights it may have, to specific performance of
this Agreement. Accordingly, if Parent should institute an action or proceeding
seeking specific enforcement of the provisions hereof, the Company hereby waives
the claim or defense that Parent has an adequate remedy at law and hereby agrees
not to assert in any such action or proceeding the claim or defense that such a
remedy at law exists. The Company further agrees to waive any requirements for
the securing or posting of any bond in connection with obtaining any such
equitable relief.
10. NOTICE. All notices or other communications under this Agreement shall
be in writing and shall be deemed duly given, effective (i) three business days
later, if sent by registered or certified mail, return receipt requested,
postage prepaid, (ii) when sent, if sent by telecopier or fax, provided that the
telecopy or fax is promptly confirmed by telephone confirmation thereof, (iii)
when served, if delivered personally to the intended recipient, and (iv) one
business day later, if sent by overnight delivery via a national courier
service, and in each case, addressed to the intended recipient at the address
set forth in the preamble hereof. Any party may change the address to which
notices or other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth:
If to Parent:
FEI Company
0000 XX Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (000) 000-0000
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With a copy to:
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
If to the Company:
Micrion Corporation
Xxx Xxxxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx, Hall & Xxxxxxx
Exchange Place, 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telecopy: (000) 000-0000
11. PARTIES IN INTEREST. This Agreement shall inure to the benefit of and
be binding upon the parties named herein and their respective successors and
assigns; PROVIDED, HOWEVER, that such successor in interest or assigns shall
agree to be bound by the provisions of this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the Company or Parent, or their successors or assigns, any rights or remedies
under or by reason of this Agreement.
12. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the Merger
Agreement and the other documents referred to therein, contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous agreements and understandings, oral
or written, with respect to such transactions. This Agreement may not be
changed, amended or modified orally, but may be changed only by an agreement in
writing signed by the party against whom any waiver, change, amendment,
modification or discharge may be sought.
13. ASSIGNMENT. No party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
party hereto, except that Parent may assign its rights and obligations hereunder
to any of its direct or
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indirect wholly owned subsidiaries (including Newco), but no such transfer shall
relieve Parent of its obligations hereunder if such transferee does not perform
such obligations.
14. HEADINGS. The section headings herein are for convenience only and
shall not affect the construction of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon (regardless of the laws that
might otherwise govern under applicable Oregon principles of conflicts of law).
17. TERMINATION. The right to exercise the Option granted pursuant to this
Agreement shall terminate at the earlier of (i) the Effective Time (as defined
in the Merger Agreement); (ii) upon termination of the Merger Agreement OTHER
THAN a termination of the Merger Agreement described in Section 5.2.2 of the
Merger Agreement; and (iii) 180 days after a termination of the Merger Agreement
described in Section 5.5.2 of the Merger Agreement (the date referred to in
clause (iii) being hereinafter referred to as the "OPTION TERMINATION DATE");
provided that, if the Option cannot be exercised or the Shares cannot be
delivered to Parent upon such exercise because the conditions set forth in
Section 2(a) or (b) hereof have not yet been satisfied, the Option Termination
Date shall be extended until thirty days after such impediment to exercise or
delivery has been removed.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
18. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, of the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
19. PUBLIC ANNOUNCEMENT. Parent shall consult with the Company and the
Company shall consult with Parent before issuing any press release with respect
to the initial announcement of this Agreement, the Option, the Merger Agreement
or the transactions contemplated hereby and neither party shall issue any such
press release prior to such
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consultation except as may be required by law or the applicable rules and
regulations of the Nasdaq National Market or any listing agreement with the
NASD.
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement to be
duly executed and delivered on the day and year first above written.
[SIGNATURE PAGE FOLLOWS]
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MICRION CORPORATION
__________________________________
By:
Title:
FEI COMPANY
__________________________________
By:
Title:
