EXHIBIT 15
LIVENT INC.
June 12, 1998
The Ovitz Family Limited Partnership
c/x Xxxxxx, Xxxxxxx & Associates
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Dear Optionee:
RE: GRANT OF OPTION
This letter agreement sets forth the terms and conditions
pursuant to which the Corporation has granted to you (the "Optionee"),
effective as of April 9, 1998 (the "Date of Grant"), an option to purchase
common shares of Livent Inc.
1. DEFINED TERMS
Where used herein, the following terms shall have the following
meanings, respectively:
(a) "Board" shall mean the board of directors of the Corporation;
(b) "Change in Control shall mean the occurrence of any of the following
events:
(i) any "person" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended from time to time (the
"Act")) is or becomes the beneficial owner within the meaning of Rule
13d-3 under the Act (a "Beneficial Owner"), directly or indirectly, of
securities of the Corporation (not including in the securities
beneficially owned by such person any securities acquired from the
Corporation or its affiliates) representing 50% or more of the
combined voting power of the Corporation's then outstanding
securities, excluding the Investor (as defined in the Investment
Agreement) and any person who becomes such a Beneficial Owner in
connection with a transaction described in clause (A) of paragraph
(iii) below: or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, as
of the Effective Time, constitute the Board and any new director
(other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of
directors of the Corporation) whose appointment or election by the
Board or nomination for election by the Corporation's stockholders was
approved or recommended by a vote of at least a majority of the
directors then still in office who either were directors as of the
Effective Time or whose appointment, election or nomination for
election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Corporation or any direct or indirect wholly-owned subsidiary of the
Corporation with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the
Corporation outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity
or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any subsidiary of the Corporation,
more than 50% of the combined voting power of the securities of the
Corporation or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no person other than the
Investor is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Corporation representing 50% or more of the
combined voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is consummated
an agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets, other than a sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets to an entity, more than 50% of the combined
voting power of the voting securities of which are owned by
stockholders of the Corporation in substantially the same proportions
as their ownership of the Corporation immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of (i) the consummation of the
transactions contemplated by the Investment Agreement or (ii) the
consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of
the Corporation immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the
assets of the Corporation immediately following such transaction or
series of transactions;
(c) "Common Shares" shall mean the common shares of the Corporation, or,
in the event of an adjustment contemplated by Section 8 hereof, such
other shares or securities to which the Optionee may be entitled upon
the exercise of an Option as a result of such adjustment;
(d) "Corporation" shall mean Livent Inc., and includes any successor
corporation thereto;
(e) "Effective Time" shall mean the effective time of the consummation of
the transactions contemplated by the Investment Agreement;
(f) "Expiration Time" shall mean 5:00 p.m. (Toronto time) on April 9,
2008;
(g) "Investment Agreement" shall mean the Investment Agreement entered
into between the Corporation and Lynx Ventures L.P., dated as of April
13, 1998;
(h) "Option" shall mean the option to purchase Common Shares granted
hereunder;
(i) "Option Price" shall mean the price per share specified in Section 3
below at which Common Shares may be purchased under the Option, as the
same may be adjusted from time to time in accordance with Section 8
hereof;
(j) "Subsidiary" shall have the meaning ascribed to such term in the
Business Corporation Act (Ontario); and
(k) "Take-Over Bid" shall mean a bona fide offer to acquire Common Shares
that is a "take-over bid" as such term is defined in the Securities
Act (Ontario), as such statute is amended, varied or re-enacted from
time to time, provided that (i) such offer is made to all or
substantially all of the holders of Common Shares, (ii) such offer is
made to acquire all or substantially all of the Common Shares
outstanding on the date of such offer and (iii) the Board issues a
recommendation that holders of Common Shares accept such offer.
2. GRANT OF OPTION
The Corporation hereby grants to the Optionee, on the terms and
subject to the conditions set forth in this agreement, an irrevocable
option (the "Option") to purchase 990,000 Common Shares (the "Optioned
Shares"), subject to any adjustment of such shares or of the number of such
shares in accordance with Section 8 below. The Options will be granted in
four equal series, designated "Series A," "Series B," "Series C" and
"Series D," each of which will entitle the Optionee to purchase 247,500
Optioned Shares.
3. OPTION PRICE
Subject to any adjustments in accordance with Section 8 hereof,
the Option Price at which each Optioned Share may be purchased upon
exercise of the Option at any time and from time to time shall be
U.S.$8.00.
4. VESTING PERIODS
(a) Subject to the terms and conditions set forth herein, the
Optionee shall have a vested and nonforfeitable right in the Option during
the periods and in the amounts specified below:
(i) as to all of the Series A Optioned Shares and Series B
Optioned Shares, on or after the first anniversary of the
Effective Time until the Expiration Time; and
(ii) as to all of the Series C Optioned Shares and Series D
Optioned Shares, on or after the second anniversary of the
Effective Time until the Expiration Time.
(b) Subject to the terms and conditions set forth herein, the
Optionee shall have the right to take up and purchase the Optioned Shares,
at any time and from time to time, during the periods and in the amounts
specified below:
(i) as to the Series A Optioned Shares, after they have become
vested pursuant to Section 4(a) above;
(ii) as to the Series B Optioned Shares, after the later of (A)
the time that they have become vested pursuant to Section
4(a) above and (B) the first date after the Date of Grant
on which the twenty trading day trailing average closing
price on NASDAQ exceeds U.S. $8.80;
(iii) as to the Series C Optioned Shares, after the later of
(A) the time that they have become vested pursuant to
Section 4(a) above and (B) the first date after the
Date of Grant on which the twenty trading day trailing
average closing price on NASDAQ exceeds U.S. $10.40;
and
(iv) as to the Series D Optioned Shares, after the later of (A)
the time that they have become vested pursuant to Section
4(a) above and (B) the first date after the Date of Grant
on which the twenty trading day trailing average closing
price on NASDAQ exceeds U.S. $12.00.
5. TERMINATION
The Option shall expire and terminate and be of no further force
or effect whatsoever as to the Optioned Shares in respect of which the
Option has not been exercised as of the earlier to occur of (a) the
Expiration Time or (b) termination of the Investment Agreement prior to
consummation of the transactions contemplated thereby.
6. CHANGE IN CONTROL
In the event of a Take-Over Bid or a Change in Control, the
Optionee, at any time while the Take-Over Bid is open for acceptance, and
at any time following a Change in Control, and notwithstanding any
conditions to the contrary regarding exercise otherwise attaching to such
Option (whether pursuant to Section 4 above or otherwise), may take up and
purchase any or all of the Optioned Shares covered by such Option.
7. EXERCISE OF OPTIONS
(a) An Option may be exercised from time to time by delivery to the
Corporation at its registered office of a written notice of exercise
addressed to the Secretary of the Corporation specifying the number of
Common Shares with respect to which the Option is being exercised and
accompanied by payment in full of the Option Price of the Common Shares to
be purchased. Certificates for such Common Shares shall be issued and
delivered to the Optionee as soon as practicable following the receipt of
such notice and payment. Payment of the Option Price may be made (i) in
cash, (ii) by cheque or money order, or (iii) by a combination of the
foregoing methods.
(b) Notwithstanding any other provision hereof, the Corporation's
obligation to issue Common Shares to an Optionee pursuant to the exercise
of an Option shall be subject to:
(i) completion of such registration or other qualification of such
Common Shares or obtaining approval of such governmental
authority as the Corporation shall determine to be necessary or
advisable in connection with the authorization, issuance or
sale thereof;
(ii) the admission of such Common Shares to listing on any stock
exchange on which the Common Shares are then listed; and
(iii) the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings
in such Common Shares, as the Corporation or its counsel
determines to be necessary or advisable in order to
safeguard against the violation of the securities laws of
any jurisdiction.
In this connection the Corporation shall, to the extent necessary, take all
reasonable steps to obtain such approvals, registrations and qualifications
as may be necessary for the issuance of such Common Shares in compliance
with applicable laws and for the listing of such Common Shares on any stock
exchange on which the Common Shares are then listed.
8. CERTAIN ADJUSTMENTS
Appropriate adjustments in the number and kind of Common Shares
or other property issuable upon exercise of the Option and in the Option
Price shall be made by the Board to give effect to changes in the Common
Shares of the Corporation resulting from subdivisions, consolidations or
reclassification of the Common Shares of the Corporation, the payment of
dividends or other distributions by the Corporation (other than dividends
or other distributions determined by the Board to be in the ordinary
course), mergers, consolidations, combinations or similar transactions or
other relevant changes in the capital of the Corporation.
9. REGISTRATION AND POSSESSION OF OPTION SHARES
Upon each exercise of the Option in accordance with Section 7
hereof, the Corporation shall cause the transfer agent of the Common Shares
forthwith to register in the name of the Optionee, or in such other name as
the Optionee may direct, the Optioned Shares paid for by the Optionee in
connection with that exercise of the Option (the "Purchased Shares") and to
prepare and deliver to the Optionee a definitive certificate in the name of
the Optionee, or in such other name as the Optionee may direct,
representing such Purchased Shares.
10. TERMINATION OF OPTION BY OPTIONEE
The Optionee may at any time terminate the Option by written
notice given to the Corporation at its registered address, and, forthwith
upon the receipt by the Corporation of any such notice in writing, the
Option shall expire and terminate as to the Optioned Shares in respect of
which the Option has not been exercised.
11. OPTIONEE NOT REQUIRED TO EXERCISE OPTION
The Optionee shall have no obligation to purchase and/or pay for,
and the Corporation shall have no obligation to issue, any Optioned Shares
except those Optioned Shares in respect of which the Optionee shall have
exercised the Option in accordance with the terms and conditions of this
agreement.
12. REPRESENTATION AND WARRANTY BY OPTIONEE
The Optionee represents and warrants to the Corporation, as a
continuing representation and warranty which shall be true and correct on
the date of this agreement and on each date that the Optionee exercises the
Option as if made and given on and as of each such date, that the Optionee
is acquiring the Option and will acquire the Purchased Shares as principal
and not as agent, nominee or trustee on behalf of any other party.
13. GENERAL
(a) Time shall be of the essence of this agreement.
(b) All dollar amounts referred to in this agreement are in U.S.
funds.
(c) The division of this agreement into articles, sections,
paragraphs, subparagraphs and other subdivisions and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this
agreement.
(d) In the event that any day on or before which any action is to be
taken under this agreement is not a business day in the place
where the action is to be taken, then such action shall be
required to be taken on or before the requisite time on the next
succeeding day that is a business day in such place.
(e) This agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the Province of Ontario
and the federal laws of Canada applicable therein, and each party
hereby irrevocably and unconditionally agrees to the non-
exclusive jurisdiction of the courts of such Province.
(f) This agreement shall enure to the benefit of and be binding upon
the parties to this agreement and the successors and assigns of
the Corporation and legal personal representatives of the
Optionee.
(g) This agreement and the Option granted to the Optionee is non-
assignable and non-transferable otherwise than, to the extent
permitted by applicable law, by will or pursuant to the laws of
succession or descent and distribution and, during the lifetime
of the Optionee, the Option shall be exercisable only by the
Optionee, provided however that the Company shall not be required
to file a prospectus or otherwise be required to take any action
or incur any expense in connection with any proposed transfer by
will or pursuant to the laws of succession or descent and
distribution. Subject to applicable law, but notwithstanding
anything in this letter agreement to the contrary, the Optionee
may, at any time in its sole and absolute discretion, assign any
or all of its rights and obligations under this letter agreement
and the Option to Xxxxxxx X. Xxxxx (the "Executive") or to any
corporation, partnership or other entity controlled directly or
indirectly by the Executive. The Optionee shall notify the
Company in writing of any such assignment and such assignment
shall be effective at any time specified by the Optionee in such
notice. Any person or entity to whom the rights and obligations
under this letter agreement have been assigned in accordance with
this Section 13(g) may further assign such rights and
obligations, provided that such further assignment also satisfies
the requirements of this Section 13(g). This Agreement shall
inure to the benefit of and be enforceable by the Optionee's
legal representatives and successors and any person or entity to
whom this letter agreement and the Option are assigned pursuant
to this Section 13(g).
(h) This agreement may be executed by the parties in counterparts
and, when so executed, such counterparts shall constitute a
single agreement.
(i) The provisions of this agreement may not be modified, waived or
discharged without obtaining the consent of applicable securities
regulatory authorities and unless such waiver, modification or
discharge is agreed to in writing by the parties hereto.
(j) No portion of the Option may be exercised unless and until the
granting of the Option hereunder is approved by the shareholders
of the Corporation to be given by a resolution passed at a
meeting of the shareholders of the Corporation and accepted by
The Toronto Stock Exchange.
(k) The Optionee shall not have any rights as a shareholder of the
Corporation with respect to any of the Common Shares covered by
the Option until the Optionee shall have exercised the Option in
accordance with the terms hereof (including tendering payment in
full of the Option Price of the Common Shares in respect of which
the Option is being exercised) and the Corporation shall have
issued such Common Shares to the Optionee in accordance with the
terms hereof.
If the terms and conditions of this agreement are acceptable to
you, please indicate your acceptance by signing this letter and printing
your name and address where indicated below.
Yours truly,
LIVENT INC.
By: /s/ Xxxxx X. Xxxxxxxxx
___________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and
Chief Executive Officer
The undersigned Optionee has reviewed, and hereby accepts and
agrees to, the provisions of this letter agreement.
THE OVITZ FAMILY
LIMITED PARTNERSHIP
By: The Xxxxxxx and Xxxx
Xxxxx Revocable Trust,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
_________________________
Name: Xxxxxxx X. Xxxxx
Title: Trustee
Address:
c/x Xxxxxx, Xxxxxxx &
Associates
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
SCHEDULE A
NOTICE OF EXERCISE OF OPTION
TO: LIVENT INC.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Secretary
Name of Optionee: _____________________
Address of Optionee: _____________________
_____________________
Date of Option Agreement _____________________
Number of Optioned Shares
in respect of which Option
is being exercised: _____________________
Aggregate Option Price: $ _____________________
The undersigned hereby notifies Livent Inc. (the "Corporation")
of the undersigned's exercise, as detailed above, of the option granted by
the Corporation pursuant to the above-referenced Option Agreement.
THE OVITZ FAMILY
LIMITED PARTNERSHIP
By: The Xxxxxxx and Xxxx
Xxxxx Revocable Trust,
its General Partner
By:________________________
Name: Xxxxxxx X. Xxxxx
Title: Trustee
