Exhibit 10.8
AMENDMENT No.1 TO AGREEMENT AND PLAN OF MERGER
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AMENDMENT No. 1 (this "Amendment"), dated February 16, 1999, by and
among Integrated Circuit Systems, Inc., a Pennsylvania corporation (the
"Company"), and ICS Merger Corp., a Pennsylvania corporation ("ICS"). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Merger Agreement (as defined
below).
W I T N E S S E T H :
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WHEREAS, the Company and ICS are parties to a certain Agreement and
Plan of Merger dated January 20, 1999 (the "Merger Agreement"); and
WHEREAS, the parties hereto wish to amend the Merger Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
1. Section 1.1 of the Merger Agreement is hereby amended to insert
in the first sentence the words "(including Section 1906 thereof, which shall be
applicable to the transactions contemplated hereby,)" after the words "this
Agreement and the BCL" and before the words "at the Effective Time".
2. Section 2.1(b)(ii) of the Merger Agreement is hereby amended to
delete the date "February 10, 1999" from the end of that Section and to insert
the date "March 3, 1999" in lieu thereof.
3. Section 2.2 of the Merger Agreement is hereby deleted in its
entirety and the following new Section 2.2 shall be inserted in lieu thereof.
"Section 2.2 Options; Stock Plans. Immediately prior to the
Effective Time, each holder of a then-outstanding employee stock
option, whether or not fully exercisable, to purchase Common
Shares (an "Option") granted under the Company's 1992 Stock
Option Plan and 1997 Equity Compensation Plan (the "Stock Plans")
and all other outstanding options, in each case as reflected in
Section 3.2 of the Disclosure Schedule, will be entitled to
receive in settlement of such Option (a) a cash payment from the
Company equal to the product of (i) the total number of Common
Shares
previously subject to such Option and (ii) the excess of the
Merger Consideration over the exercise price per Common Share
subject to such Option, subject to any required withholding of
taxes (the "Option Spread"), (b) new stock options ("New
Options") in the Company pursuant to new stock option agreements
between the Company, ICS and certain members of Management or (c)
some combination of (a) and (b) above. The Company will, upon the
request of ICS, use reasonable efforts to obtain the written
acknowledgment of each employee holding an Option that the
payment of the amount of cash or New Options referred to above
will satisfy in full the Company's obligation to such employee
pursuant to such Option and take such other action as is
necessary to effect the provisions of this Section 2.2. The
amounts payable pursuant to this Section 2.2 shall be paid as
soon as reasonably practicable following the Closing Date and
shall be subject to and made net of all applicable withholding
taxes. The Company will solicit from each Retained Employee, as
such term is defined in that certain asset purchase agreement
among 3COM Corporation, the Company and ICS Technologies, Inc.,
an agreement by each such employee who owns an Option (as defined
in such agreement) to accept, in lieu of stock upon the exercise
of the Option, the amount of cash such employee would have
received if they received the cash payments described in this
Section 2.2 (the "Option Payment") which shall be a condition to
any agreement by the Company to pay such Option Payment in
respect of such Options."
4. Section 3.2 of the Merger Agreement is hereby amended to delete
the second full sentence and the following new sentence shall be inserted in
lieu thereof.
"As of the close of business on January 19, 1999, 12,106,225
Common Shares were issued and outstanding, all of which are
entitled to vote on this Agreement."
5. Section 3.2 of the Merger Agreement is hereby amended to delete
the fourth full sentence and the following new sentence shall be inserted in
lieu thereof.
"As of January 19, 1999, except for (i) 2,356,709 Common Shares
reserved for issuance pursuant to outstanding Options, there are
no existing options, warrants, calls, subscriptions, or other
rights, or other agreements or commitments, obligating the
Company to issue, transfer or sell any shares of capital stock of
the Company or any of its Subsidiaries."
6. Section 3.25 of the Merger Agreement is hereby amended to delete
the first clause that reads "Except as set forth in Section 3.13 of the
Disclosure Schedule," and the following new clause shall be inserted in lieu
thereof.
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"Except with respect to any matter set forth in Section 3.7, 3.13 or
3.22(a) of the Disclosure Schedule,"
7. Section 5.2 of the Merger Agreement is hereby deleted in its
entirety and the following new Section 5.2 shall be inserted in lieu thereof.
"From the date of this Agreement until the Effective Time, the
Company will, and will cause its Subsidiaries, and each of their
respective officers, directors, employees, agents or other
representatives (including, without limitation, any investment
banker, attorney or accountant retained by the Company or its
Subsidiaries) (the "Company Representatives"), to give ICS and
their respective officers, employees, agents or other
representatives (including, without limitation, any investment
banker, attorney or accountant retained by ICS) (the "ICS
Representatives") and representatives of financing sources
identified by ICS who do not compete with the Company in the
integrated circuit industry ("Financing Sources"), so long as
such ICS Representatives and representatives of Financing Sources
agree in writing (with the Company as a party or expressly set
forth as a third party beneficiary to such agreement) to maintain
the confidentiality of any non-public confidential information
about the Company and its Subsidiaries in a manner consistent
with market practice for acquisition financing transactions,
reasonable access, upon reasonable notice and during normal
business hours, to the offices and other facilities and to the
books and records of the Company and its Subsidiaries and will
cause the Company Representatives and the Company's Subsidiaries
to furnish ICS and the ICS Representatives and Financing Sources
identified by ICS with such financial and operating data and such
other information with respect to the business and operations of
the Company and its Subsidiaries as ICS and representatives of
Financing Sources may from time to time reasonably request.
In addition, the Company agrees that so long as the Financing
Sources and the representatives agree in writing (with the
Company as a party or expressly set forth as a third party
beneficiary to such agreement) to maintain the confidentiality of
any non-public confidential information about the Company and its
Subsidiaries in a manner consistent with market practice for
acquisition financing transactions, ICS and the ICS
Representatives may directly furnish financial and operating data
and such other information about the Company and its Subsidiaries
as they reasonably deem necessary, to representatives of
Financing Sources or any ICS Representative. ICS agrees that it
will receive and hold any information furnished pursuant to this
Section 5.2 subject to the provisions of the letter agreement
dated May 13, 1998, between Bear Xxxxxxx Merchant
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Fund Corp. and the Company and the letter agreement dated May 15,
1998, between Xxxx Capital Inc. and the Company (the
"Confidentiality Agreements")."
8. Section 5.10 of the Merger Agreement is hereby amended to delete
the words "Investment Banks" from the proviso after the words "in the opinion
of" and before the words "more favorable to the Company" and to insert the words
"Investment Banker" in its place .
9. Section 5.10 of the Merger Agreement is hereby amended to delete
the word "then" from the proviso after the words "from a financial point of
view" and before the words "than the transactions contemplated by this
Agreement."
10. Section 6.2(d) of the Merger Agreement is hereby amended to add
the following new clause to the beginning of the first sentence of Section
6.2(d).
"Except as set forth in Section 3.7 or 3.22(a) of the Disclosure
Schedule,"
11. Sections 7.1(b) of the Merger Agreement is hereby deleted in its
entirety and the following new Section 7.1(b) shall be inserted in lieu thereof.
"(b) by ICS or the Company if the Merger shall not have been
consummated on or before June 30, 1999; provided, however, that
neither ICS nor the Company may terminate this Agreement pursuant
to this Section 7.1(b) if such party shall have materially
breached this Agreement."
12. Section 7.1(d) of the Merger Agreement is hereby amended to
delete the word "Transaction" from the second line and to insert the word
"Proposal" in its place.
13. Section 7.1(d) of the Merger Agreement is hereby amended to
delete subsection (ii) up to the proviso and the following new clause
7.1(d)(ii) shall be inserted before the proviso in lieu thereof.
"(ii) after consultation with counsel, that failure to approve
such proposal and terminate this Agreement could reasonably be
expected to result in a breach of the Company's Board's fiduciary
duties to shareholders (assuming for such purpose that fiduciary
duties are owed only to shareholders), as they would exist in the
absence of any limitations in this Agreement;"
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14. Section 7.1(e)(iii) of the Merger Agreement is hereby amended to
delete the word "Transaction" and to insert the word "Proposal" in its place.
15. Section 3.2 of the Disclosure Schedule of the Merger Agreement
is hereby amended to delete the following clause from the end of the sentence
referring to the Incentive Stock Option to purchase 112,000 shares granted to X.
Xxxxxxx:
", and providing for accelerated vesting in the event the fair
market value of the common stock exceeds $20 for ten consecutive
trading days, subject to certain limitations"
16. The Company's grant of an option on February 2, 1999 to each of
Xxxxx Xxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxxx, the Company's three non-employee
directors, to purchase 8,000 shares of the Company's Common Stock at a per
share price of $18.375 pursuant to the non-discretionary annual grant provision
of the Company's 1997 Equity Compensation Plan shall be deemed to be included on
the appropriate Optionee Statements attached to Section 3.2 of the Disclosure
Schedule of the Merger Agreement effective as of the date of the Merger
Agreement.
17. Section 3.13 of the Disclosure Schedule of the Merger Agreement
is hereby amended to include the following effective as of the date of the
Merger Agreement:
"Any resignation by any person who was an Executive Officer of
the Company as of January 19, 1999, and is no longer an Executive
Officer of the Company as of February 16, 1999."
18. Section 5.1 of the Disclosure Schedule of the Merger Agreement is
hereby amended to include the following effective as of the date of the Merger
Agreement:
"4. The Company's 1997 Equity Compensation Plan provides for the
non-discretionary annual grant of an option on February 2, 1999
to each of the Company's three Independent Directors to purchase
8,000 shares of the Company's Common Stock at the Fair Market
Value on the date of the grant."
19. ICS agrees that it will cause item (ix) of Exhibit C to the
Senior Secured Credit Facilities and Mezzanine Facility Loan Commitment Letter
dated January 18, 1999 from Credit Suisse First Boston ("Loan Commitment
Letter") to be amended to read in its entirety as follows:
"(ix) the Closing Date shall occur on or before June 30, 1999."
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20. ICS further agrees that it will cause item (ii) of Exhibit C to
the Loan Commitment Letter to be amended by inserting at the end of that section
the following:
"; provided, however, that the failure of the Merger and related
transactions to be eligible for recapitalization accounting shall
not be considered a failure to satisfy any of the conditions to
the commitments of CSFB stated herein;"
21. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Merger
Agreement.
22. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
23. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
24. From and after the date hereof, except as the context otherwise
requires, all references in the Merger Agreement to the Merger Agreement shall
be deemed to be references to the Merger Agreement as modified hereby.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to be duly executed and delivered as of the date first above
written.
INTEGRATED CIRCUIT SYSTEMS,
INC.
By: /s/ Xxxx X. Xxx
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Name: Xxxx X. Xxx
Title: Senior Vice President,
Chief Operating Officer and
Chief Financial Officer
ICS MERGER CORP.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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