EXHIBIT (2)(c)
CONFORMED COPY
STOCKHOLDER AGREEMENT AND PROXY (this
"Agreement"), dated as of March 1, 1999, by and among
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GEC Incorporated, a Delaware corporation ("Parent"),
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▇▇▇▇▇▇ Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent, organized under the
laws of Delaware ("Acquisition Sub"), and the limited
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partnerships affiliated with KKR Associates, L.P. whose
names are set forth on the signature pages hereof
(each, a "Stockholder");
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WHEREAS each Stockholder has beneficial ownership of the number of
shares of common stock, $0.01 par value, of Reltec Corporation, a Delaware
corporation (the "Company"), set forth opposite the name of such Stockholder on
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Schedule A (such class of stock sometimes referred to herein as the "Company
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Common Stock", and the shares of Company Common Stock, including such shares
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that are acquired as a result of a stock dividend, stock split,
recapitalization, combination, reclassification, exchange, or change of such
shares, that are, from time to time, beneficially owned by each Stockholder
sometimes referred to herein as "such Stockholder's Shares");
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WHEREAS, simultaneously with the execution and delivery hereof,
Parent, Acquisition Sub and the Company have entered into an Agreement and Plan
of Merger (the "Merger Agreement"), dated as of the date hereof, which Merger
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Agreement has been unanimously approved by the Board of Directors of the
Company, and has been approved by the Board of Directors of Parent and
Acquisition Sub. The directors of the Company unanimously voted in favor of the
adoption of the Merger Agreement and the recommendation that stockholders of the
Company approve the merger (the "Merger") contemplated by the Merger Agreement
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and tender their shares of Company Common Stock pursuant to the Offer (as
defined below) to be commenced by Acquisition Sub pursuant to the Merger
Agreement;
WHEREAS, pursuant to the Merger Agreement, Acquisition Sub, or other
wholly owned subsidiary of Parent will commence an offer (the "Offer") for all,
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but not less than a majority on a fully-diluted basis, of the shares of
outstanding Company Common Stock at the Per Share Amount (as defined in the
Merger Agreement) in cash; and
WHEREAS, as a condition to entering into the Merger Agreement and
commencing the Offer, Parent and Acquisition Sub have required that each of the
Stockholders enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, each of the Stockholders, severally, agrees with
Parent and Acquisition Sub as follows:
Section 1. Capitalized Terms. Capitalized terms used but not defined
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herein shall have the meanings assigned to such terms in the Merger Agreement.
Section 2. Representations and Warranties of Stockholders. Each
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Stockholder represents and warrants to Parent and Acquisition Sub as follows:
(a) Such Stockholder is a limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction under
which it is organized.
(b) Such Stockholder has all necessary partnership power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by such Stockholder, and no other partnership
proceedings on the part of such Stockholder are necessary to authorize this
Agreement or to consummate the transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered
by such Stockholder and, assuming this Agreement constitutes a valid and
binding obligation of each of Parent and Acquisition Sub, constitutes a
legal, valid and binding agreement of such Stockholder enforceable against
such Stockholder in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
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(e) The execution, delivery and performance by such Stockholder of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) contravene or conflict with its partnership
agreement or certificate of limited partnership, (ii) assuming that all
consents, authorizations and approvals contemplated by subsection (f) below
have been obtained and all filings described therein have been made,
contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to such Stockholder or any of its properties; (iii) conflict
with, or result in the breach or termination of or constitute a default
(with or without the giving of notice or the lapse of time or both) under,
or give rise to any right of termination, cancellation, or loss of any
benefit to which such Stockholder is entitled under any provision of any
agreement, contract, license or other instrument binding upon such
Stockholder or any of its properties, or allow the acceleration of the
performance of any obligation of such Stockholder under any indenture,
mortgage, deed of trust, lease, license, contract, instrument or other
agreement to which such Stockholder is a party or by which such Stockholder
its assets or properties is subject or bound; or (iv) result in the
creation or imposition of any Lien on any asset of such Stockholder, except
in the case of clauses (ii), (iii) and (iv) for any such contraventions,
conflicts, violations, breaches, terminations, defaults, cancellations,
losses, accelerations and Liens which would not individually or in the
aggregate be reasonably expected to prevent, materially delay or materially
impair the consummation by such Stockholder of the transactions
contemplated by this Agreement.
(f) The execution, delivery and performance by such Stockholder of
this Agreement and the consummation of the transactions contemplated hereby
by such Stockholder require no filings, notices, declarations, consents or
other actions to be made by such Stockholder with, nor are any approvals or
other confirmations or consents required to be obtained by such Stockholder
from any Governmental Entity (except those the failure of which to make,
give or obtain, individually or in the aggregate, would not reasonably be
expected to prevent or materially delay such Stockholder's ability to
consummate the transactions contemplated hereby), other than filings,
notices, approvals, confirmations, consents, declarations or decisions (i)
required by the HSR Act; (ii) required by
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the Exchange Act and state securities, takeover and Blue Sky laws; (iii)
required by the Canadian Competition Act; (iv) from the Italian Autorita
Garante della Concorrenza e del Mercato that it does not intend to initiate
a second stage investigation of the transactions contemplated hereby
(including the Merger) or any matters arising therefrom under Article 16 of
Law no.287 of October 10, 1990; (v) from the German Federal Cartel Office,
during the one month time limit referred to in Section 40 paragraph 1 of
the Act against Restraints on Competition, that the conditions for a
prohibition in Section 36 paragraph 1 of the Act against Restraints on
Competition are not fulfilled, or, if no such confirmation is received,
this one month time limit having expired without the parties having been
notified by the Federal Cartel Office that it has entered into the
examination of the proposed concentration; and (vi) from the U.K. Office of
Fair Trading that it is not the intention of the U.K. Secretary of State to
refer the transactions contemplated hereby or any matters arising therefrom
to the MMC (clauses (i) through (vi) are referred to herein as the
"Stockholder Governmental Approvals").
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(g) As of the date hereof, there is no action, suit, claim,
investigation or proceeding pending against, or to the knowledge of such
Stockholder, threatened against any Stockholder or properties before any
court or arbitrator or any administrative, regulatory or governmental body,
or any agency or official which challenges or seeks to prevent, enjoin,
alter or delay the Offer or the Merger or any of the other transactions
contemplated hereby or by the Merger Agreement. As of the date hereof,
such Stockholder is not and none of its properties is subject to any order,
writ, judgment, injunction, decree, determination or award which would
prevent or delay the consummation of the transactions contemplated hereby.
(h) Such Stockholder has, and at any Closing (as defined below)
hereunder such Stockholder will have, good and valid title to such
Stockholder's Shares, free and clear of, except as set forth in Schedule
2(1), any Liens, proxies, voting trusts or agreements, understandings or
arrangements, except for any Liens or proxies arising hereunder.
(i) Except as set forth in Schedule 2(1), there are no options or
rights to acquire, or any agreements to which such Stockholder is a party
relating to such Stockholder's Shares, other than this Agreement.
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(j) The transfer of such Stockholder's Shares hereunder will transfer
to Acquisition Sub good and valid title to such Stockholder's Shares, free
and clear of any Liens, proxies, voting trusts or agreements,
understandings or arrangements, except for any Liens or proxies arising
hereunder.
(k) Such Stockholders' Shares described in Schedule A represent all
of the Shares beneficially owned (within the meaning of Rule 13d-3 under
the Exchange Act) by such Stockholder.
(l) Schedule 2(1) sets forth a complete and correct list of all
contracts, agreements and commitments (oral or written), together with a
description of monetary obligations thereof, between the Company or any of
its subsidiaries, on the one hand, and such Stockholder, on the other hand.
(m) Such Stockholder is not a "foreign person" as defined in Section
1445(f)(3) of the Code.
(n) Such Stockholder understands and acknowledges that Parent is
entering into, and causing Acquisition Sub to enter into, the Merger
Agreement in reliance upon such Stockholder's execution and delivery of
this Agreement.
Section 3. Representations and Warranties of Parent and Acquisition
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Sub. Each of Parent and Acquisition Sub represents and warrants to the
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Stockholders as follows:
(a) Each of Parent and Acquisition Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Each of Parent and Acquisition Sub has all necessary corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of Parent and
Acquisition Sub, and no other corporate proceedings on the part of Parent
or Acquisition Sub are necessary to authorize this Agreement or to
consummate the transactions so contemplated.
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(d) This Agreement has been duly and validly executed and delivered
by each of Parent and Acquisition Sub and, assuming this Agreement
constitutes a valid and binding obligation of each Stockholder, constitutes
a legal and binding agreement of each of Parent and Acquisition Sub
enforceable against each of Parent and Acquisition Sub in accordance with
its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(e) The execution, delivery and performance by each of Parent and
Acquisition Sub of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
constitutional documents of Parent or Acquisition Sub, (ii) assuming that
all consents, authorizations and approvals contemplated by subsection (f)
below have been obtained and all filings described therein have been made,
contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to Parent or Acquisition Sub or, any of their respective
subsidiaries or properties; (iii) conflict with, or result in the breach or
termination of any provision of or constitute a default (with or without
the giving of notice or the lapse of time or both) under, or give rise to
any right of termination, cancellation, or loss of any benefit to which
Parent or Acquisition Sub or any of their respective subsidiaries is
entitled under any provision of any agreement, contract, license or other
instrument binding upon Parent or Acquisition Sub, any of their respective
subsidiaries or any of their respective properties, or allow the
acceleration of the performance of any obligation of Parent or Acquisition
Sub or any of their respective subsidiaries under any indenture, mortgage,
deed of trust, lease, license, contract, instrument or other agreement to
which Parent or Acquisition Sub or any of their respective subsidiaries is
a party or by which Parent or Acquisition Sub or any of their respective
subsidiaries or any of their respective assets or properties is subject or
bound; or (iv) result in the creation or imposition of any Lien on any
asset of Parent or Acquisition Sub or any of their respective
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subsidiaries, except in the case of clauses (iii) and (iv) for any such
contraventions, conflicts, violations, breaches, terminations, defaults,
cancellations, losses, accelerations and Liens which would not individually
or in the aggregate be reasonably expected to prevent, materially delay or
materially impair the consummation by such Stockholder of the transactions
contemplated by this Agreement.
(f) The execution, delivery and performance by Parent and Acquisition
Sub of this Agreement and the consummation of the transactions contemplated
hereby by Parent and Acquisition Sub require no filings, notices,
declarations, consents or other actions to be made by Parent or Acquisition
Sub with, nor are any approvals or other confirmations or consents required
to be obtained by Parent or Acquisition Sub from, any Governmental Entity
(except those the failure of which to make, give or obtain, individually or
in the aggregate, would not reasonably be expected to prevent or materially
delay Parent's or Acquisition Sub's ability to consummate the transactions
contemplated hereby), other than filings, notices, approvals,
confirmations, consents, declarations or decisions (i) required by the HSR
Act; (ii) required by the Exchange Act and state securities, takeover and
Blue Sky laws; (iii) required by the Canadian Competition Act; (iv) from
the Italian Autorita Garante della Concorrenza e del Mercato that it does
not intend to initiate a second stage investigation of the transactions
contemplated hereby (including the Merger) or any matters arising therefrom
under Article 16 of Law no.287 of October 10, 1990; (v) from the German
Federal Cartel Office, during the one month time limit referred to in
Section 40 paragraph 1 of the Act against Restraints on Competition, that
the conditions for a prohibition in Section 36 paragraph 1 of the Act
against Restraints on Competition are not fulfilled, or, if no such
confirmation is received, this one month time limit having expired without
the parties having been notified by the Federal Cartel Office that it has
entered into the examination of the proposed concentration; and (vi) from
the U.K. Office of Fair Trading that it is not the intention of the U.K.
Secretary of State to refer the transactions contemplated hereby or any
matters arising therefrom to the MMC (clauses (i) through (vi) are referred
to herein as "Parent Governmental Approvals").
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Section 4. Agreement to Tender. (a) Each Stockholder agrees that,
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promptly after receipt of the Offer
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Documents, such Stockholder will tender all of such Stockholder's Shares
pursuant to the Offer and will not withdraw such Shares prior to the termination
withdrawal or expiration date of the Offer (or any extension thereof) (it being
understood that the obligation contained in this section is unconditional,
subject to Section 17).
(b) Each Stockholder will receive the same Per Share Amount received
by other stockholders of the Company in the Offer with respect to the Shares
tendered by it in the Offer. On the business day after the date the Shares are
accepted for payment and purchased by Acquisition Sub pursuant to the Offer,
Acquisition Sub or Parent, as the case may be, shall make payment by wire
transfer of immediately available funds to each Stockholder of the purchase
price for such Stockholder's Shares to an account designated by such
Stockholder.
Section 5. Agreement to Vote; Proxy. (a) Each Stockholder agrees, to
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the extent such Stockholder continues to own, or have legal rights in respect
of, its Shares, with, and covenants to, Parent and Acquisition Sub as follows:
(i) At any meeting of stockholders of the Company called to vote upon
the Merger, the Merger Agreement or the other transactions contemplated by
the Merger Agreement or upon which a vote, consent or other approval with
respect to the Merger, the Merger Agreement or the other transactions
contemplated by the Merger Agreement is sought, such Stockholder shall vote
(or cause to be voted) or shall consent, execute a consent or cause to be
executed a consent in respect of such Stockholder's Shares in favor of the
Merger, the execution and delivery 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.
(ii) 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, such Stockholder shall vote (or cause
to be voted) such Stockholder's Shares against (x) any Acquisition Proposal
or any action which is a component of any Acquisition Proposal or would be
a component of an Acquisition Proposal if it were contained in a proposal,
(y) any merger agreement or merger (other than the Merger Agreement and the
Merger), reorganization, recapitalization, dissolution, liquidation or
winding up of or by the Company or
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(z) any amendment of the Company's Certificate of Incorporation or By-laws
which amendment would in any manner partially or wholly prevent or
materially impede, interfere with or delay the Merger, the Merger Agreement
or any of the other transactions contemplated by the Merger Agreement (each
of the foregoing in clause (x), (y) or (z) above, a "Competing
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Transaction").
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(iii) In furtherance and not in derogation of the foregoing, such
Stockholder agrees with, and covenants to, Parent and Acquisition Sub that,
at the request of Parent, such Stockholder shall use all reasonable
efforts, and shall cooperate in all respects with Parent, Acquisition Sub
and the Company, (i) to satisfy any legal, regulatory or other stock
exchange requirements that apply to approving the Merger, the Merger
Agreement and the other transactions contemplated by the Merger Agreement
by written consent pursuant to Section 228 of the Delaware Law and (ii)
subject to satisfaction of the foregoing, to effect a written consent
satisfying the requirements of Section 228 of the Delaware Law in favor of
the adoption and approval for purposes of Section 251 of the Delaware Law
of the Merger, the Merger Agreement and each of the other transactions
contemplated by the Merger Agreement.
(b) Each Stockholder hereby grants to, and appoints, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇ and any other individual who is designated by Parent, until the
termination of this Agreement pursuant to Section 17, an irrevocable proxy,
coupled with an interest, and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Stockholder, with
respect to all such Stockholder's Shares, to vote such Stockholder's Shares, or
grant or execute a consent or approval, in the complete discretion of Parent or
Acquisition Sub, as the case may be, 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 (i) in favor of the Merger and
any transactions contemplated by, or necessary or desirable to consummate the
transactions contemplated by, the Merger Agreement and the adoption of the
Merger Agreement and (ii) against any Competing Transaction. Such irrevocable
proxy is executed and intended to be irrevocable in accordance with the
provisions of Section 212(e) of the Delaware Law. Each Stockholder agrees that
this Agreement, including the provisions of this Section 5 will be recorded in
the books and records of the Company.
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Section 6. Purchaser's Option. The parties further agree as follows:
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(a) Each Stockholder does hereby grant to Acquisition Sub an
irrevocable option (collectively, with respect to all the Stockholders'
Shares the "Option") to purchase all, but not less than all, such
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Stockholder's Shares, subject to the terms and conditions of this Section
and Section 17.
(b) The exercise price for each Share of Stockholders Shares shall be
the Per Share Amount.
(c) In the event of any change in the number or kind of such
Stockholder's Shares by reason of stock dividends, stock splits,
recapitalizations, combinations, reclassifications, exchanges or changes of
shares, then the exercise price for such Stockholder's Shares shall be
adjusted appropriately so that the total amount to be paid upon exercise in
whole of the Option with respect to such Stockholder's Shares would remain
unchanged.
(d) The Option may be exercised prior to the termination of this
Agreement specified in Section 17 in the event that the Offer has expired
or has otherwise been terminated and any Stockholder has failed to tender
all of its Shares in accordance with Section 4 or has withdrawn any of its
Shares tendered in the Offer prior to such expiration or termination.
(e) In the event Acquisition Sub wishes to exercise the Option,
Acquisition Sub shall send a written notice (the "Notice") to each
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Stockholder specifying a date (not sooner than two nor later than ten
business days from the date the Notice is given) for the closing of such
purchase of all of such Stockholder's Shares (the "Closing"). The Closing
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will take place at such location in New York, New York, as Acquisition Sub
shall specify in the Notice. At the Closing, payment for such Stockholder's
Shares then being purchased shall be made to such Stockholder by wire
transfer in immediately available funds in the amount of the aggregate
exercise price, against delivery to Acquisition Sub of (i) a certificate or
certificates registered in its name evidencing such Shares duly endorsed
for transfer and (ii) an affidavit of such Stockholder that is not a
"foreign person" as defined in Section 1445(f)(3) of the Code. Such Shares
will be imprinted with any legends required by applicable securities laws.
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(f) Parent and Acquisition Sub agree that, in the event that the
Option is exercised, Acquisition Sub will agree to purchase from any holder
of Shares with tag-along or similar rights granted by any Stockholder that
wishes to sell its shares of Company Common Stock to Acquisition Sub of all
shares of Company Common Stock of such holder on the same terms of the
purchase pursuant to the exercise of the Option.
(g) The obligations of such Stockholder to deliver, and Acquisition
Sub to purchase and pay for, such Stockholder's Shares, or any portion
thereof, upon exercise of the Option are subject to the conditions that (i)
no preliminary or permanent injunction or other order prohibiting the
delivery of such Stockholder's Shares issued by a court of competent
jurisdiction shall be in effect and (ii) any waiting period applicable to
the Merger under the HSR Act shall have terminated or expired and the other
Company Governmental Approvals and Parent Governmental Approvals, the
failure of which to obtain would be reasonably expected to have a Material
Adverse Effect or a Parent Material Adverse Effect ("Required Approvals"),
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shall have been obtained or satisfied, as the case may be, on terms
satisfactory to Parent in its reasonable discretion; provided that this
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condition may not be asserted by any Stockholder with respect to any
Required Approval if the potential penalty for any failure to receive such
Required Approval will be borne only by Parent or Acquisition Sub. In the
event that any of the aforesaid conditions has not been satisfied at or
prior to the scheduled time of Closing, the Closing shall be delayed for
such period as shall be necessary in order for such conditions to be
satisfied, but in no event shall the Closing be delayed by more than 60
days. If the Closing does not occur within such period, the Option and the
exercise of the Option shall terminate and be void. Termination of this
Agreement after a Notice has been properly delivered under this Agreement
will not terminate or otherwise affect the parties' obligations hereunder
as to the exercise of the Option pursuant to such Notice.
(h) The obligation of Acquisition Sub to purchase and pay for such
Stockholder's Shares, or any portion thereof, upon exercise of the Option
is also subject to the fulfillment, or waiver by Acquisition Sub, of the
conditions (which may be waived by Acquisition Sub in its sole discretion)
that (i) such Stockholder's representations and warranties contained in
this Agreement, and the Company's representations and
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warranties contained in the Merger Agreement shall be true and correct on
and as of the date of the Closing, as though such representations and
warranties were made on such date, (ii) such Stockholder shall have
performed in all material respects all of its covenants and agreements
under this Agreement required to be performed at or prior to the Closing or
the Company shall have performed in all material respects all of its
covenants and agreements under the Merger Agreement required to be
performed at or prior to the Closing hereunder, and (iii) such Stockholder
shall have delivered to Parent and Acquisition Sub on the date of the
Closing a certificate to such effect, and the Company shall have delivered
to Parent and Acquisition Sub on the date of the Closing a certificate to
such effect executed by the Chief Executive Officer of the Company.
(i) Notwithstanding anything to the contrary, Parent and Acquisition
Sub agree that, upon completion of the purchase of each Stockholder's
Shares pursuant to the Option, there shall be no conditions to effect the
Merger under the Merger Agreement or otherwise, except for the conditions
set forth in Section 7.1(a) and (c) of the Merger Agreement.
(j) Parent and Acquisition Sub agree not to terminate the Offer prior
to its scheduled expiration date (determined in the manner provided in the
Merger Agreement) if at such time, any Stockholder has failed to tender all
of its Shares in accordance with Section 4 unless Parent or Acquisition Sub
has first provided the Stockholders with one business days' prior written
notice of its intent to terminate the Offer.
Section 7. Additional Covenants. Except pursuant to this Agreement,
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no Stockholder shall, without the prior written consent of Parent, directly or
indirectly (i) during the term of this Agreement grant any proxies or enter into
any voting trust, power of attorney or other agreement or arrangement with
respect to the voting of such Stockholder's Shares, (ii) acquire, sell, assign,
transfer, encumber or otherwise dispose of, or enter into any contract, option
or other arrangement or understanding with respect to the direct or indirect
acquisition or sale, assignment, transfer, encumbrance or other disposition of
any of such Stockholder's Shares during the term of this Agreement 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. Each Stockholder agrees not to seek or solicit any such
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acquisition or sale, assignment, transfer, encumbrance or other disposition or
any such contract, option or other arrangement or assignment or understanding
and agrees to notify Parent promptly and to provide all details requested by
Parent if such Stockholder shall be approached or solicited, directly or
indirectly, by any Person with respect to any of the foregoing. Each Stockholder
agrees to use its reasonable best endeavors to cause the Company to perform its
obligations under the Merger Agreement. Each Seller agrees (i) promptly to
exercise any "drag-along" or other rights that permit it to require any other
person to sell its Shares upon a sale by such Seller of its Shares ("Drag-Along
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Rights") to cause the person subject to such Drag-Along Rights to tender in the
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Offer, and not withdraw, any shares held by such person and (ii) promptly to use
its reasonable best efforts to cause each of its affiliates to exercise any
Drag-Along Rights held by such affiliate to cause the person subject to such
Drag-Along Rights to tender in the Offer, and not withdraw, any shares held by
such person.
Section 8. No Solicitations. Each Stockholder and its affiliates
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(other than the Company and its subsidiaries will immediately cease any existing
discussions or negotiations with any third parties conducted prior to the date
hereof with respect to any Acquisition Proposal. Each Stockholder agrees that it
will not, and will use its best efforts to cause such affiliates not to,
directly or indirectly, solicit, initiate or knowingly encourage inquiries or
proposals that constitute, or could reasonably be expected to lead to an
Acquisition Proposal or engage in negotiations or discussions concerning to, or
provide any confidential information relating to, any Acquisition Proposal or
agree to approve or recommend or participate in any Acquisition Proposal or
sell, transfer or otherwise dispose of any Shares or participation in any
Acquisition Proposal (other than pursuant to this Agreement or the Merger
Agreement). Each Stockholder agrees that it or any of such affiliates will
promptly advise Parent of, and communicate to Parent the terms of, any such
inquiry or proposal it or any of such affiliates may receive, and will promptly
advise Parent if it or any of such affiliates provides any such information to
any such person. 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 any Stockholder shall be deemed to be a violation of
this Section 8 by such Stockholder. In addition, during the period from the
date of this Agreement through the Effective Time, the Stockholders shall not
terminate, amend, modify or
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waive any provision of any confidentiality or standstill agreement relating to
the Company to which it or any of its affiliates is a party. During such period,
the Stockholders shall, and shall cause the Company to enforce, to the fullest
extent permitted under applicable law, the provisions of any such agreement,
including by seeking to obtain injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any
court of the United States of America or of any state having jurisdiction.
Section 9. Actions by Board. No action taken by the Board shall
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modify, alter, change or otherwise affect the obligations of the Stockholders
hereunder.
Section 10. Governing Law. This Agreement shall be governed by the
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internal laws of the State of Delaware without regard to the principles of
conflicts of law. Each of the parties hereto irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the States of
Delaware and of the United States of America located in the State of Delaware or
any appellate court thereof (the "Delaware Courts") for any litigation arising
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out of or relation to this agreement and the transactions contemplated hereby
(and agrees not to commence any litigation relating thereto except in such
Delaware Courts), waives any objection to the laying of venue of any such
litigation in the Delaware Court that such litigation brought therein has been
brought in an inconvenient forum. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 11. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (ii) IT
-14-
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES
SUCH WAIVERS VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.
Section 11. Notices. Notices under this Agreement shall be deemed to
-------
be duly given when delivered in person, by cable, telegram, telex or facsimile,
by overnight courier or by registered or certified mail (postage prepaid, return
receipt requested) in writing as follows:
If to Parent or Acquisition Sub, to:
GEC Incorporated and
▇▇▇▇▇▇ Acquisition Corp.
c/o Videojet Systems International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Street
London, EC4N 8EL, ENGLAND
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: 011-44-171-329-4455
and
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Stockholder, to such
Stockholder at the address set
forth on Schedule A hereto
Section 12. Entire Agreement; Amendments. This Agreement
-----------------------------------------
constitutes the entire understanding of the parties with respect to the subject
matter hereof. There are
-15-
no restrictions, agreements, promises, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter and is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder. This Agreement may be amended only by a written instrument
duly executed by Acquisition Sub and the holders of all the Stockholder's
Shares.
Section 13. Assignment. Notwithstanding any other provision of this
----------
Agreement, this Agreement shall not be assignable by any party hereto except by
Parent or Acquisition Sub to any direct or indirect wholly owned subsidiary of
The General Electric Company, p.l.c.; provided, however, that no such assignment
-------- -------
shall relieve either Parent or Acquisition Sub from its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable against, (i) as to each Stockholder, such
Stockholder and such Stockholder's beneficiaries and representatives, and (ii)
Parent and Acquisition Sub and their successors and permitted 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.
Section 14. Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity 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 and
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities 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.
Section 15. Stop Transfer Order. In furtherance of this Agreement,
-------------------
concurrently herewith each Stockholder shall and hereby does authorize Parent
and Acquisition Sub to notify the Company's transfer agent that there is a stop
transfer order with respect to all of such Stockholder's
-16-
Shares subject to the terms of this Agreement (and that this Agreement places
limits on the voting and transfer of such Shares). The Stockholders further
agree to cause the Company not to register the transfer of any certificate
representing any Stockholder's Shares unless such transfer is made in accordance
with the terms of this Agreement.
Section 16. Further Action. From time to time, at the request of
--------------
Parent or Acquisition Sub and without further consideration, each Stockholder
shall execute and deliver to Parent and Acquisition Sub such documents and take
such action as Parent or Acquisition Sub may reasonably request in order to
consummate the transactions contemplated hereby, including vesting in
Acquisition Sub good and valid title to such Stockholder's Shares.
Section 17. Termination. This Agreement, including the Option, shall
-----------
terminate and be of no further force and effect upon the earliest to occur of
(a) the Effective Time, (b) a date selected by Parent, at its option, by written
notice to the Stockholders, (c) the termination of the Merger Agreement pursuant
to its terms or (d) the Termination Date, as it may be extended under the Merger
Agreement; provided, however, that if Acquisition Sub exercises the Option by
-------- -------
sending a Notice on or prior to the date on which this Agreement would terminate
pursuant to this Section 17, but the Closing with respect to such Notice does
not occur on or before such date, whether due to the failure of a condition set
forth in Section 6(g) or otherwise, then the termination date shall be
postponed, and this Agreement shall terminate on the earlier to occur of (i) the
first day following such Closing and (ii) 60 days after the exercise of the
Option, at which time this Agreement, the Option and the exercise thereof shall
terminate and be void. Notwithstanding the foregoing, this Agreement will not
terminate pursuant to clause (d) of the prior sentence if at the Termination
Date the Company cannot otherwise terminate the Merger Agreement under Section
8.1 of the Merger Agreement unless Parent or Acquisition Sub terminates the
Merger Agreement.
Section 18. Survival. None of the representations, warranties,
--------
covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such representations and warranties (other than those made in Section 2(j)),
covenants and other agreements, shall survive the Effective Time, except for
those covenants and agreements contained herein and therein that by their terms
apply or are to be performed in whole or in part after the Effective Time, and
this Section 18 and Sections 10, 11, 13, 15, 16, 21 and 22. Each party hereto
agrees that, except for the representations and warranties contained in this
Agreement, (i) none of the Stockholders, Parent or Acquisition Sub or any of
their respective officers, directors, employees, affiliates, agents, financial
or legal
-17-
advisors or other representatives makes any other representations or warranties,
whatsoever, oral or written, express or implied, and each hereby disclaims any
other representations and warranties made by itself or any of its officers,
directors, employees, affiliates, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing, and (ii)
none of the parties hereto is relying on any disclosure, statement,
representation or warranty, oral or written, express or implied, made by any
other party hereto or such party's officers, directors, employees, affiliates,
agents, financial or legal advisors or other representatives.
Section 19. Counterparts. This Agreement may be executed in one or
------------
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been signed
by each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.
Section 20. Announcements. So long as this Agreement is in effect,
-------------
except as required by applicable law or applicable SEC, stock exchange or the
National Association of Securities Dealers, Inc. requirements, the parties
hereto and their representatives shall not issue or cause the publication of any
press release, public announcement or other public statement, with respect to
the transactions contemplated by this Agreement without the prior consent of the
other parties hereto, which consent shall not be unreasonably withheld.
Section 21. Specific Performance. The Stockholders, Parent and
--------------------
Acquisition Sub acknowledge that this Agreement and such Stockholders' Shares
are unique and that no party will have an adequate remedy at law if any other
party breaches any covenant herein or fails to perform its obligations
hereunder. Accordingly, the Stockholders, Parent and Acquisition Sub agree that
the others shall have the right, in addition to any other rights which it may
have, to specific performance and equitable injunctive relief if any party shall
fail or threaten to fail to perform any of its obligations under this Agreement.
Section 22. Expenses. Whether or not the Option is exercised, all
--------
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense, except that the costs and expenses of the Stockholders shall be paid by
the Company.
-18-
Section 23. Limited Liability of Partners. Notwithstanding any other
------------------------------
provision of this Agreement, no general partner or limited partner, nor any
future general or limited partner of any Stockholder, shall have any personal
monetary liability for performance of any obligation of such Stockholder under
this Agreement. Any monetary liability of the Stockholder under this Agreement
shall be satisfied solely out of the assets of the Stockholder.
Section 24. Stockholder Capacity. Each Stockholder signs solely in
--------------------
its capacity as the record holder and beneficial owner of the Shares and nothing
herein shall limit or affect any actions taken by any officer or director of the
Company or its subsidiaries in his or her capacity as an officer or director of
the Company to the extent permitted by the Merger Agreement (including causing
its representatives to take actions permitted by the Merger Agreement).
Section 25. Parent Actions. Parent shall cause Acquisition Sub to
---------------
perform each of its obligations hereunder.
-19-
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its representatives thereunto duly authorized, all
as of the day and year first above written.
GEC INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
▇▇▇▇▇▇ ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
CMT ASSOCIATES, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇, ▇▇.
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇, ▇▇.
Title: Attorney-In-Fact
KKR PARTNERS II, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇, ▇▇.
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇, ▇▇.
Title: Attorney-In-Fact
KKR ASSOCIATES, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇, ▇▇.
-------------------
Name: ▇▇▇▇ ▇▇▇▇▇, ▇▇.
Title: Attorney-In-Fact
-20-
Schedule 2(1)
1. Securities Purchase Agreements between the Company and the Stockholders.
The Company may owe the Stockholders certain amounts pursuant to the
expense reimbursement provisions contained in such agreements.
2. Registration Rights Agreements between the Company and the Stockholders.
3. Stockholder Agreements between the Company, the Stockholders and certain
stockholders of the Company.
Schedule A
TO THE
STOCK PURCHASE AGREEMENT
Capitalized terms used in this Schedule A and not otherwise, defined in
this Schedule A have the respective meanings assigned to such terms in the
attached Stockholders Agreement.
Name and address of each Stockholder Number of Shares
------------------------------------ ----------------
CMT Associates, L.P. 45,042,183 Shares
c/o Kohlberg Kravis ▇▇▇▇▇▇▇ & Co., L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
KKR Partners II, L.P. 392,600 Shares
c/o Kohlberg Kravis ▇▇▇▇▇▇▇ & Co., L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
KKR Associates, L.P. 396,500 Shares
c/o Kohlberg Kravis ▇▇▇▇▇▇▇ & Co., L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Total
----------
45,831,283 Shares