EXHIBIT 99.1
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT (the "Agreement") is made and entered into as
of February 23, 2007, by and between InFocus Corporation, an Oregon
corporation ("InFocus" or the "Company"), and Caxton Associates, L.L.C.,
a Delaware limited liability company ("Caxton"), Caxton International
Limited, a British Virgin Islands corporation ("Caxton International"),
and GDK Inc., a British Virgin Islands corporation (together with Caxton
and Caxton International, the "Caxton Entities").
RECITALS
WHEREAS, InFocus has announced that its board of directors (the "Board")
and the Company's financial advisor are conducting an evaluation of
strategic alternatives for the Company; and
WHEREAS, one of those strategic alternatives may involve a sale of the
Company or a merger or other business combination involving the Company
(a "Transaction"); and
WHEREAS, Caxton International intends to demand a special meeting of the
shareholders of InFocus (the "Special Meeting") and to solicit proxies
from InFocus' shareholders (the "Special Meeting Solicitation") to (i)
remove a majority of the members of the Board at the Special Meeting and
(ii) nominate certain individuals to be elected at the Special Meeting
to fill the resulting vacancies on the Board; and
WHEREAS, among other things, InFocus is willing under certain
circumstances to add to the Board two individuals selected by Caxton
(whom Caxton believes in good faith to be qualified to serve on the Board),
and Caxton is willing to terminate the Special Meeting Solicitation;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I.
AGREEMENTS
Section 1.1. Abandonment of Special Meeting Solicitation.
Neither the Caxton Entities nor any of their Affiliates will, directly or
indirectly, (a) demand, or encourage any other shareholder of the Company
to demand, pursuant to the Company's Bylaws or the Oregon Business
Corporation Act, at any time prior to the Company's 2007 Annual Meeting of
shareholders (the "2007 Annual Meeting"), that the Company call a special
meeting of its shareholders or (b) with respect to any special meeting of
shareholders held prior to the 2007 Annual Meeting (an "Interim Special
Meeting"), solicit proxies or consents for the purpose of removing
directors or increasing the authorized number of directors of the Company
or otherwise become a "participant," directly or indirectly, in any
"solicitation" of "proxies" or consents for such purpose (such quoted
terms being defined in Regulation 14A under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")); provided that, with the
exception of the foregoing prohibitions with respect to calling an Interim
Special Meeting and the removal of directors or increasing the authorized
number of directors at an Interim Special Meeting, nothing herein
contained shall affect or limit Caxton's ability to act with respect to any
annual or special meeting of the Company's shareholders. For purposes of
this Agreement, "Affiliate" means any person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Caxton Entities.
Section 1.2. Option for Board Representation.
(a) At any time on or after April 13, 2007, Caxton may deliver to the
Company written notice (the "Notice") demanding that the Company add to its
Board up to two (2) designees named by Caxton in the Notice (the "Caxton
Designees") whom Caxton believes in good faith to be qualified to serve on
the Board. As promptly as practicable, and in any event within five (5)
business days after the date of receipt of the Notice by the Company, the
Company shall take all action necessary (including the calling of a special
meeting of the Board to approve such actions) to increase the authorized
number of directors of the Company from five (5) to seven (7) members and
to cause the directors then on the Board (the "Incumbent Directors") to
nominate and elect the Caxton Designees to fill such newly created
directorships to serve until the next election of directors of the Company
or until the earlier resignation or removal of such directors.
Notwithstanding the foregoing, Caxton shall not be entitled to deliver the
Notice and the Company shall not be required to add any Caxton Designees
to the Board if prior to the time the Notice is given, or prior to the
time the Company otherwise would be required to add Caxton Designees to
the Board, as the case may be, InFocus shall have publicly announced that
it has entered into a definitive agreement for a Transaction.
(b) Should any Caxton Designee resign from the Board or decide not to
seek appointment or election to the Board, pursuant to Section 1.2(c),
Caxton shall be entitled to designate a replacement for such Caxton
Designee as a member of the Board (such replacement being a person whom
Caxton believes in good faith to be qualified to serve on the Board), and
InFocus shall take all necessary action to replace the resigning Caxton
Designee with such designated replacement as promptly as practicable.
Any such designated replacement who becomes a Board member shall be deemed
to be a Caxton Designee for all purposes under this Agreement.
(c) The Board or a nominating committee of the Board shall nominate for
election to the Board at the 2007 Annual Meeting a slate of individuals
selected by it in its sole discretion. For the avoidance of doubt,
Incumbent Directors shall have no obligation to nominate and recommend
Caxton Designees to shareholders for election at any subsequent annual or
special meeting of shareholders.
(d) Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not be required to cause the Board (or the
nominating committee thereof) to nominate the Caxton Designees unless on
the date the Notice is received by the Company the Caxton Entities and
their Affiliates maintain an aggregate beneficial ownership of at least
ten (10) percent of the total number of shares of common stock of the
Company outstanding on the date of this Agreement, adjusted proportionately
in all cases to reflect any stock dividend or distribution, stock split,
reverse stock split, combination, recapitalization reclassification or
similar transaction affecting the outstanding shares of common stock of the
Company after the date of this Agreement.
(e) In the event one or more Caxton Designees become a director of the
Company, such Caxton Designees shall each be subject to the Company's
xxxxxxx xxxxxxx guidelines and other policies governing members of the Board
to the same extent as any other member of the Board.
Section 1.3. Annual Meeting.
Except as otherwise expressly agreed to in writing by Caxton, InFocus shall
hold the 2007 Annual Meeting no later than July 31, 2007 (the "Annual
Meeting Deadline"), and shall give notice of the date of that meeting no
later than 30 days prior to the date of the 2007 Annual Meeting; provided,
however, if the Company has (i) publicly announced a Transaction prior to
Xxxxx 00, 0000, (xx) filed a preliminary proxy statement in connection with
the Transaction with the Securities and Exchange Commission and (iii) is
pursuing in good faith a special meeting of shareholders to vote on such
Transaction, then the Annual Meeting Deadline shall be extended until
August 31, 2007.
Section 1.4. Publicity.
Promptly following the execution of this Agreement, InFocus and the Caxton
Entities shall prepare and issue a joint press release in the form attached
hereto as Annex A. Thereafter, InFocus and the Caxton Entities shall use
their reasonable efforts to consult with each other before issuing any
press release or otherwise making any public statement about the execution
or terms of this Agreement.
ARTICLE II.
MISCELLANEOUS PROVISIONS
Section 2.1. Representations and Warranties.
(a) Each of the parties hereto represents and warrants to the other
party that:
(i) such party has all requisite authority and power to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby,
(ii) the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all required action on the part of such party and no other
proceedings on the part of such party are necessary to authorize the
execution and delivery of this Agreement or to consummate the transactions
contemplated hereby,
(iii) the Agreement has been duly and validly executed and delivered by
such party and constitutes the valid and binding obligation of such party
enforceable against such party in accordance with their respective terms,
and
(iv) this Agreement will not result in a violation of any terms or
provisions of any agreements to which such person is a party or by which
such party may otherwise be bound or of any law, rule, license, regulation,
judgment, order or decree governing or affecting such party.
(b) The parties hereto acknowledge, warrant and represent that they
have carefully read this Agreement, understand it, have consulted with and
received the advice of counsel regarding this Agreement, agree with its
terms, are duly authorized to execute it and freely, voluntarily and
knowingly execute it.
Section 2.2. General.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and the respective successors,
personal representatives and assigns of the parties hereto.
(b) This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and thereof and supersedes all
prior and contemplated arrangements and understandings with respect
thereto.
(c) This Agreement may be signed in counterparts, each of which shall
constitute an original and all of which together shall constitute one and
the same Agreement.
(d) All notices and other communications required or permitted
hereunder shall be effective upon receipt and shall be in writing and may
be delivered in person, by telecopy, electronic mail, express delivery
service or U.S. mail, in which event it may be mailed by first-class,
certified or registered, postage prepaid, addressed to the party to be
notified at the respective addresses set forth below, or at such other
addresses which may hereinafter be designated in writing:
If to InFocus:
InFocus Corporation
00000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx, Secretary
Fax No.: (000) 000-0000
Email: Xxxxx.Xxxx@xxxxxxx.xxx
with a copy to:
Xxxxxx Xxxxxxxx Xxxx
11th Floor
000 X.X. Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
Email: xxxxxxxxxx@xxxxxx.xxx
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Fax No.: (000) 000-0000
Email: xxxxxx@xxxxxx.xxx
If to Caxton:
Caxton Associates, L.L.C.
000 Xxxxxxxxx Xxxx, Xxxxxxxx 0
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
Email: xxxxxxxxx@xxxxxx.xxx
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxx@xxxxxxx.xxx
(e) This Agreement and the legal relations hereunder between the parties
hereto shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and performed therein,
without giving effect to the principles of conflicts of law thereof.
(f) Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid, but if any provision
of this Agreement is held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not render invalid or unenforceable any
other provision of this Agreement.
(g) It is hereby agreed and acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the
event of any such failure, an aggrieved person will be irreparably damaged
and will not have an adequate remedy at law. Any such person, therefore,
shall be entitled to injunctive relief, including specific performance, to
enforce such obligations, without the posting of any bond, and, if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.
(h) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(i) Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State
of New York and of the United States of America, in each case located in the
County of New York, for any action, proceeding or investigation in any court
or before any governmental authority arising out of or relating to this
Agreement and thetransactions contemplated hereby (and agrees not to commence
any action, proceeding or investigation relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by registered mail to its respective address set forth in this
Agreement shall be effective service of process for any action, proceeding or
investigation brought against it in any such court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the
laying of venue of any action, proceeding or investigation arising out of this
Agreement or the transactions contemplated hereby in the courts of the State
of New York or the United States of America, in each case located in the
County of New York, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
proceeding or investigation brought in any such court has been brought in an
inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written above.
INFOCUS CORPORATION
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
CAXTON ASSOCIATES, L.L.C.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Cheif Financial Officer
CAXTON INTERNATIONAL LIMITED
By: Caxton Associates, L.L.C., Attorney-in-Fact
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
GDK, INC.
By: A.R.T. Advisors, LLC, Attorney-In-Fact
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Authorized Representative
Annex A
Investor Relations Contacts: Public Relations Contacts:
Xxxx Xxxxxx Xxxxxx Xxxxx
Chief Executive Officer InFocus Corporation
InFocus Corporation (000) 000-0000
(000) 000-0000
Xxxxx Xxxx Xxxxxxx Xxx
Chief Financial Officer Edelman
InFocus Corporation (000) 000-0000
(000) 000-0000
InFocus Announces Settlement Agreement with Caxton Associates
WILSONVILLE, Ore., February 26, 2007 InFocus Corporation (NASDAQ: INFS)
today announced that on February 23, 2007 it entered into a settlement
agreement with Caxton Associates L.L.C. ("Caxton"), its largest
shareholder.
Background
The Company announced on October 10, 2006 that it is engaged in an active
process considering a variety of strategic options for the Company and
that Banc of America Securities was engaged as advisors to the process.
As previously announced, the intention of this initiative is to increase
shareholder value through the evaluation of multiple alternatives,
including a possible sale of the Company.
In a series of filings with the Securities and Exchange Commission which
began shortly after the Company's October 10th announcement, Caxton has
expressed their view that the intrinsic value of the Company, and the
amount a strategic or financial buyer would pay to acquire the Company,
is greater than its current market value. Further, Caxton has indicated
in the filings that they intend to call a special meeting of the Company's
shareholders to seek to replace a majority of the current members of the
Company's Board of Directors.
Settlement Agreement
Under the Settlement Agreement, Caxton has agreed to abandon their plans to
call a special meeting of the Company's shareholders. In exchange, the
Company has agreed to allow Caxton to name up to two designees to the Board
of Directors if the Company has not publicly announced a definitive agreement
for a sale, merger, or other business combination by April 13, 2007.
Nothing in the Settlement Agreement prevents Caxton from taking further
action to increase Board of Directors representation at the 2007 Annual
Meeting and, the Company agreed to hold the 2007 Annual Meeting no later
than July 31, 2007 or, under certain conditions, August 31, 2007.
"We believe the Settlement Agreement is in the best interest of our
shareholders," said Xxxx Xxxxxx, president and chief executive officer.
"The Settlement Agreement with Caxton gives us the best opportunity to
complete the strategic alternatives process successfully and without the
distraction of calling a special meeting of our shareholders", Xxxxxx
concluded.
Forward-Looking Statements
This press release includes forward-looking statements. Investors are
cautioned that all forward-looking statements involve risks and uncertainties
and several factors could cause actual results to differ materially from those
in the forward-looking statements. Investors are directed to the Company's
filings with the Securities and Exchange Commission, including the Company's
2005 Form 10-K and 2006 Form 10-Q's, which are available from the Company
without charge, for a more complete description of the risks and uncertainties
relating to forward-looking statements made by the Company as well as to other
aspects of the Company's business. The forward-looking statements contained
in this press release speak only as of the date on which they are made and the
Company does not undertake any obligation to update any forward looking
statements to reflect events or circumstances after the date of this press
release.
About InFocus Corporation
InFocus Corporation (NASDAQ: INFS) is the industry pioneer and worldwide
leader in the projection market today. Over twenty years of experience and
engineering breakthroughs are at work here, constantly improving what you see
in the marketplace, and delivering immersive audio visual impact in home
entertainment, business and education environments. Being the inventor and
leader is simply a great bonus of making the presentation of ideas,
information, and entertainment a vivid, unforgettable experience, and we
believe our product contributions set the standard for what a big picture
experience should be like.
InFocus Corporation's global headquarters are located in Wilsonville, Oregon,
USA, with regional offices in Europe and Asia. For more information, visit the
InFocus Corporation web site at xxx.xxxxxxx.xxx or contact the Company
toll-free at 800.294.6400 (U.S. and Canada) or 503.685.8888 worldwide.
###
InFocus, IN, Proxima, LiteShow, LP, ASK, ScreenPlay, Play Big, Work Big,
Learn Big and The Big Picture are either registered trademarks or
trademarks of InFocus Corporation in the U.S. and abroad.
