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EXHIBIT 14
STOCK TENDER AND VOTING AGREEMENT
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of July 6,
1999 by and among Xxxxxx Xxxxxx ("Stockholder"), Saturn Electronics &
Engineering, Inc., a Michigan corporation ("Saturn"), and SSI Acquisition Corp.,
a Delaware corporation and a wholly-owned subsidiary of Saturn ("Merger Sub").
RECITALS
A. Concurrently herewith Saturn, Merger Sub and Smartflex Systems, Inc.,
a Delaware corporation ("Smartflex"), are entering into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), pursuant to which Merger
Sub agrees to make a tender offer (the "Offer") for all of the outstanding
shares of common stock, $.0025 par value (the "Common Stock") of Smartflex, at a
price of $10.50 per share (the "Offer Price"), in cash, following which
Smartflex will be merged with and into Merger Sub, with Smartflex as the
Surviving Corporation (the "Merger").
B. Stockholder beneficially owns (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as
of the date hereof, 3,500 shares of Common Stock (the "Existing Shares",
together with any shares of Common Stock beneficial ownership of which is
acquired by Stockholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares").
C. As a condition to their willingness to enter into the Merger
Agreement, Saturn and Merger Sub have requested that Stockholder agree, and
Stockholder has agreed, to enter into this Agreement.
D. Saturn and Merger Sub have entered into the Merger Agreement in
reliance on Stockholder's representations, warranties, covenants and agreement
hereunder.
THEREFORE, the parties agree as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
1.1 Tender. Stockholder agrees to validly tender all Shares
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (including Shares acquired after the date
hereof) pursuant to the Offer would subject Stockholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Stockholder hereby agrees that, during the time this
Agreement is in effect, at any meeting of the stockholders of Smartflex,
however called, and in any action by consent of the stockholders of
Smartflex, Stockholder will: (a) vote all Shares beneficially owned by it
in favor of the Merger; (b) vote all Shares beneficially owned by it
against any action or agreement that would result in a breach of any
covenant or any representation or warranty or any other obligation or
agreement of Smartflex under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against
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any action or agreement that would impede, interfere with, delay, postpone
or attempt to discourage, the Merger or the Offer including, but not
limited to, (i) any corporate transaction not entered into in the ordinary
course of business (other than the Merger), including, but not limited to,
a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Smartflex, (ii) a
sale or transfer of a material amount of assets of Smartflex or any of its
subsidiaries, (iii) any change in the board of directors of Smartflex, (iv)
any material change in the capitalization of Smartflex, (v) any change in
the charter, by-laws or other organizational or constitutive documents of
Smartflex, or (vi) any other material change in the corporate structure or
business of Smartflex; and (d) without limiting the foregoing, consult with
Saturn and vote all Shares beneficially owned by it in such manner as is
determined by Saturn to be in compliance with the provisions of this
Section 1.2. Stockholder acknowledges receipt and review of a copy of the
Merger Agreement. Notwithstanding the foregoing, Stockholder may take any
action in his or her role as a director or officer of Smartflex as
permitted under Sections 6.04 and 8.01(e) of the Merger Agreement. This
Agreement is intended to bind Stockholder only with respect to the specific
matters set forth herein and shall not prohibit the Stockholder from acting
in accordance with his or her fiduciary duties to Smartflex.
1.3. Irrevocable Proxy. Contemporaneously with the execution of this
Agreement: (i) Stockholder will deliver to Saturn a proxy in the form
attached hereto as Exhibit A, which will be irrevocable to the fullest
extent permitted by law (the "Proxy"), with respect to all Shares owned of
record by Stockholder; and (ii) Stockholder will cause to be delivered to
Saturn additional Proxies executed on behalf of each record owner of any
Shares owned beneficially (but not owned of record) by Stockholder.
2. Representations and Warranties of Stockholder. Stockholder represents
and warrants to Saturn and Merger Sub as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
all of the Shares currently beneficially owned by Stockholder. On the Closing
Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Stockholder. Stockholder does not have any rights to acquire any
additional shares of Common Stock other than pursuant to options issued under
the Stock Option Plans (as defined in the Merger Agreement), Stockholder
currently has with respect to the Existing Shares, and at Closing will have with
respect to the Shares, good, valid and marketable title, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable, Federal and State securities laws).
2.2 Power; Binding Agreement. Stockholder has the full legal capacity,
right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any agreement, contract or arrangement to which
Stockholder is a party or is bound, including, without limitation, any voting
agreement, stockholders agreement or voting trust. This Agreement has been duly
executed and delivered by Stockholder and constitutes a legal, valid and binding
agreement of Stockholder, enforceable in accordance with its terms. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the
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transactions contemplated hereby will (a) other than filings required under the
federal or state securities laws, require any consent or approval of or filing
with any Governmental or other regulatory body, or (b) constitute a violation
of, conflict with or constitute, a default under (i) any law, rule or regulation
applicable to Stockholder, or (ii) any order, judgment or decree by which
Stockholder is bound.
2.3. Finder's Fees. No person is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Saturn and Merger Sub. Saturn and
Merger Sub, jointly and severally, represent and warrant to Stockholder as
follows:
3.1 Authority. Each of Saturn and Merger Sub has full legal right,
power and authority to enter into and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement by Saturn and Merger Sub
will not violate the charter, bylaws or other organizational or constitutive
documents of Saturn or Merger Sub, or any other agreement, contract or
arrangement to which Saturn or Merger Sub is a party or is bound. This Agreement
has been duly executed and delivered by each of Saturn and Merger Sub and
constitutes a legal, valid and binding agreement of Saturn and Merger Sub,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Saturn or Merger Sub of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Saturn or Merger Sub, or (ii) any order, judgment or decree to
which Saturn or Merger Sub is bound.
3.2. Finder's Fees. No person is, or will be, entitled to any
commission or finder's fee from Saturn or Merger Sub in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of Sections
5, 6 and 19 which will survive any termination of this Agreement), will
terminate on the earliest to occur of (a) the date on which Merger Sub accepts
for payment the Shares tendered in the Offer, so long as the Shares are so
tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) simultaneously with the termination of the Merger Agreement
in accordance with its terms.
5. Expenses. Except as provided in Section 19, each party hereto will pay
all of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers. The provisions of this Section 5 will survive the Closing
hereunder.
6. Confidentiality. Stockholder recognizes that successful consummation
of the transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to these matters. In this connection, pending
public disclosure, Stockholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal
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counsel and advisors of Stockholder or Smartflex, if any) not a party to this
Agreement, without prior written consent of Saturn, except as provided herein or
in the Merger Agreement and except for filings required pursuant to the Exchange
Act, and the rules and regulations thereunder or disclosures Stockholder's legal
counsel advises in writing are necessary in order to fulfill Stockholder's
obligations imposed by law, in which event Stockholder will give prompt prior
notice of such disclosure to Saturn and cooperate with Saturn in obtaining a
protective order or in limiting such disclosure.
7. Certain Covenants of Stockholder.
7.1 Except in accordance with the provisions of this Agreement,
Stockholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting trust or
enter into a voting agreement with respect to any Shares; or
(c) solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Saturn or Merger Sub) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in (other than pursuant to the exercise of options
outstanding on the date hereof), Smartflex or any subsidiary of Smartflex, or
any merger, consolidation, business combination, reorganization,
recapitalization or similar transaction involving Smartflex or any subsidiary of
Smartflex (each a "Competing Transaction"), or participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise, cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any person (other than
Saturn and Merger Sub) to do or seek any of the foregoing, Stockholder will
cease and cause to be terminated any existing activities, discussions or
negotiations by or on its behalf with any person (other than Saturn and Merger
Sub) conducted heretofore with respect to any Competing Transaction and will
promptly notify Saturn following receipt of any request by any person (other
than Saturn or Merger Sub) relating to any possible Competing Transaction or
information concerning Smartflex. Nothing contained herein will prohibit
Stockholder, solely in his capacity as an officer or as a member of the board of
directors of Smartflex (the "Board"), from furnishing information to, or
entering into discussions or negotiations with, any person (other than Saturn
and Merger Sub) in connection with an unsolicited proposal involving a
fully-financed (as represented by such person) Competing Transaction which is
made in writing by such person (other than Saturn and Merger Sub) and which, if
consummated, would provide consideration per share, of Common Stock to the
stockholders of Smartflex in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the advice of XX
Xxxxx Securities Corporation and the written advice of Xxxxxxxxx Xxxxx Xxxxxxx &
Xxxxx, that such action is required for the Board to comply with its fiduciary
duties to stockholders under Delaware law.
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7.2 Stockholder agrees, while this Agreement is in effect, to notify
Saturn promptly of the number of any shares of Common Stock beneficial ownership
of which is acquired by Stockholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the execution
of this Agreement (and from time to time prior to the termination of this
Agreement), Stockholder will cause Smartflex to provide for each certificate
representing Shares beneficially owned by Stockholder to bear a legend in the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED
OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
TERMS AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT AND ARE
SUBJECT TO THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF
JULY 6, 1999, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Stockholder will cause Smartflex to
require the transfer agent for its Common Stock to make a notation in its
records prohibiting the transfer of any of the Shares, except in accordance with
the terms and conditions of this Agreement.
9. Survival of Representation and Warranties. Except as expressly set
forth herein, none of the representations, warranties, covenants and agreements
made by Stockholder, Saturn or Merger Sub in this Agreement will survive the
Closing hereunder.
10. Notices. All notices or other communication required or permitted
hereunder will be in writing, will be given by hand delivery, U.S. Express Mail
(return receipt requested), overnight courier guaranteeing next business day
delivery, or facsimile, and will be deemed duly given when received, addressed
as follows,
If to Saturn or Merger Sub:
Saturn Electronics & Engineering, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., President,
Chief Executive Officer and Chairman of the Board
Facsimile: (000) 000-0000
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With copies to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
2290 First National Building
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to Stockholder:
Xxxxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
With copies to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
11. Entire Agreement; Amendment. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by the party against
whom such modification, amendment, alteration or supplement is sought to be
enforced.
12. Assigns. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto without the
prior written consent of the other parties, except that Merger Sub may assign
any or all of its rights and obligations hereunder to Saturn or any direct or
indirect wholly-owned subsidiary of Saturn without the consent of Stockholder or
Company, but no such transfer will relieve Merger Sub of its obligations under
this Agreement if such subsidiary does not perform the obligations of Merger Sub
hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
expressly set forth below, this Agreement will 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 conflicts of laws thereof.
In addition, each of Stockholder, Merger Sub and Saturn hereby agrees that any
dispute arising out of this Agreement will be heard in the United States
District Court for the Central District of California and, in connection
therewith, each party to
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this Agreement hereby consents to the jurisdiction of such courts and agrees
that any service of process in connection with any dispute arising out of this
Agreement or the Merger may be given to any other party hereto by certified
mail, return receipt requested, at the respective addresses set forth in Section
10 above.
14. Injunctive Relief. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may 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 will be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be executed in
any number of counterparts (including by facsimile signature), each of which
will be deemed to be an original and all of which together will constitute one
and the same document.
16. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision will be interpreted
to be only so broad as is enforceable.
17. Further Assurances. Each party hereto will execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, will be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced by any
party to this Agreement to enforce or recover damages for any breach of the
provisions hereof, the prevailing party in such legal proceeding will be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this Section
19 will survive the Closing hereunder.
20. Amendment and Modification. This Agreement may be amended, modified
and supplemented only by a written document executed by Saturn, Merger Sub and
Stockholder.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Saturn and Merger Sub have caused this Agreement to be
executed by their duly authorized officers, and Stockholder has duly executed
this Agreement, as of the date and year first above written.
"SATURN"
SATURN ELECTRONICS &
ENGINEERING, INC.
By: /s/ X. Xxxxx
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Name: Xxxxxxx X. Xxxxx, Xx.
Its: President,
Chief Executive Officer and
Chairman of the Board
"MERGER SUB"
SSI ACQUISITION CORP.
By: /s/ X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Its: President
"STOCKHOLDER"
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
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EXHIBIT A
Form Of Irrevocable Proxy
The undersigned stockholder of Smartflex Systems, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Xxxxxxx X. Xxxxx, Xx., Xxxxxx Xxxxxxx and
Saturn Electronics & Engineering, Inc. ("Saturn"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
(i) the issued and outstanding shares of capital stock of Smartflex owned of
record by the undersigned as of the date of this proxy, which shares are
specified on the final page of this proxy and (ii) any and all other shares of
capital stock of Smartflex which the undersigned may acquire after the date
hereof (the shares of the capital stock of Smartflex referred to in (clauses (i)
and (ii) of the immediately preceding sentence are collectively referred to as
the "Shares"). Upon the execution hereof all prior proxies given by the
undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted in
connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, among Saturn, SSI Acquisition Corp. and the undersigned (the "Stock
Tender Agreement"), and is granted in consideration of Saturn entering into the
Agreement and Plan of Merger, dated as of the date hereof, among Saturn, SSI
Acquisition Corp. and Smartflex (the "Merger Agreement"). Capitalized terms used
but not otherwise defined in this proxy have the meanings ascribed to such terms
in the Merger Agreement.
The attorneys and proxies named above will be empowered, and may exercise
this proxy, to vote the Shares at any time until the earlier to occur of the
valid termination of the Merger Agreement pursuant to Section 8.01 thereof or
the Effective Time at any meeting of the stockholders of Smartflex, however
called, or in any written action by consent of stockholders of Smartflex: (a) in
favor of the Merger; (b) against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of Smartflex under or pursuant to the Merger Agreement; or (c)
against any action or agreement that would impede, interfere with, delay,
postpone, or attempt to discourage the Merger or the Offer including, but not
limited to, (i) any corporate transaction not entered into in the ordinary
course of business (other than the Merger), including, but not limited to, a
merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Smartflex, (ii) a sale or
transfer of a material amount of assets of Smartflex or any of its subsidiaries,
(iii) any change in the board of directors of Smartflex, (iv) any material
change in the capitalization of Smartflex, (v) any change in the charter,
by-laws or other organizational or constitutive documents of Smartflex, or (v)
any other material change in the corporate structure or business of Smartflex.
This proxy will be binding upon the heirs, successors and assigns of the
undersigned (including any transferee of any of the Shares).
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Any term or provision of this proxy which is invalid or unenforceable, in
any jurisdiction will, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this proxy or affecting the validity or
enforceability of any of the terms or provisions of this proxy in any other
jurisdiction. If any provision of this proxy is so broad as to be unenforceable,
the provision will be interpreted to be only so broad as is enforceable.
This proxy will terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: July 6, 1999
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Name: Xxxxxx Xxxxxx
Number of shares of Common Stock owned of record as of the date of this proxy: 0
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