Exhibit 4.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED
FOR SALE. PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE WARRANT UNDER SUCH ACT AND APPLICABLE LAWS OR
SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS WARRANT IS NON-TRANSFERABLE.
No. CW-_________________ Warrant to Purchase Up to 120,000 Shares
of Common Stock (subject to adjustment)
WARRANT TO PURCHASE COMMON STOCK
of
ZiLOG, Inc.
This certifies that, for value received. Future Electronics Inc., a
New Brunswick (Canada) corporation ("Holder"), is entitled, subject to the
terms set forth below, to purchase from ZiLOG, Inc. (the "Company"), a
Delaware corporation, up to 120,000 shares of the Common Stock of the Company
upon surrender hereof, at the principal office of the Company referred to
below, with the Notice of Exercise form attached hereto duly executed, and
simultaneous payment therefor in lawful money of the United States or
otherwise as hereinafter provided, of the Exercise Price as set forth in
Section 3 below. The number, character and Exercise Price of such shares of
Common Stock are subject to adjustment as provided below. The term "Warrant"
as used herein shall include this Warrant and any warrants delivered in
substitution or exchange therefor as provided herein.
1. Vesting of Warrant. The Warrant shall be exercisable to purchase
shares of Common Stock in the following amounts to the extent that the related
Resale Revenue is realized in calendar year 2003:
(a) 80,000 shares, if the Resale Revenue is at least
$40,000,000 but less than $50,000,000.
(b) 100,000 shares, if the Resale Revenue is at least
$50,000,000 but less than $60,000,000.
(c) 120,000 shares, if the Resale Revenue is $60,000,000
or greater.
For purposes of this Warrant, "Resale Revenue" shall mean the net
sales, as determined in good faith by the Company in accordance with the
Company's standard accounting procedures (which shall be consistent with
United States GAAP), that the Company derives from resales by the Holder and
its worldwide Affiliates to their respective end customers net of amounts for
product returns, price adjustments, and other relevant items applicable in
determining net sales as consistently applied under the Company's stated
accounting principles and practices. The Company's determination of the Resale
Revenue shall be final, unless the Holder notifies the Company that it
contests the Company's determination, based solely upon a calculation error or
record discrepancy and not based upon accounting principles used by the
Company, unless the same are not consistent with GAAP, within thirty (30) days
after its receipt thereof and the Company shall notify the Holder in writing
of its determination of the Resale Revenue, which shall be provided to the
Holder on or before February 29, 2004 (the "Notification Date"). Resale
Revenue is based on all worldwide resale activity of the Holder and its
Affiliates to parties other than Company Affiliates. All dollar amounts
referred to are in United States currency unless stated otherwise. If the
Resale Revenue is less than $40,000,000 for calendar year 2003, the Warrant
shall terminate and no shares maybe purchased hereunder. For the purposes
hereof, "Affiliate" or "Affiliates" shall mean any corporation, firm,
partnership or other entity that directly or indirectly owns, is owned by, or
is under common ownership with a party to this Agreement to the extent of at
least 50 percent of the equity having the power to vote on or direct the
affairs of the entity and any person, firm, partnership, corporation or other
entity actually controlled by, controlling, or under common control with a
party to this Agreement.
2. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, during the
term commencing on the Notification Date and shall expire on the date three
years after the Notification Date and shall be void thereafter. In the event
of partial exercise of this Warrant: (a) the Holder shall retain its right to
purchase additional shares of the Common Stock, for the Exercise Price, as
defined in Section 3 below; and (b) the Company shall replace this Warrant
certificate with another Warrant certificate, substantially in the same form
as this Warrant, as modified to reflect the right of the Holder to purchase
such additional shares. However, in no event shall (i) the rights of the
Holder under this Warrant be increased or modified or (ii) the aggregate
number of shares of Common Stock purchased pursuant to this Warrant, or any
other warrant issued in replacement hereof, exceed the Holder's entitlement,
as determined pursuant to Section 1 hereof.
3. Exercise Price. The Exercise Price at which this Warrant may be
exercised shall be $______ per share of Common Stock, which corresponds to the
price at which the Common Stock of the Company was trading at the close of
market, on the trading day corresponding to date on which the Warrant
Agreement was executed (or if there was no such trade on such date, then the
most recent past date on which there was trading).
4. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part at any time during the term
hereof as described in Section 1 above, by the surrender of this Warrant and
the Notice of Exercise annexed hereto duly completed and executed on behalf of
the Holder, at the principal office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company), upon
payment in cash or by check acceptable to the Company.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date.
As promptly as practicable on or after such date and in any event within ten
(10) days thereafter, the Company at its expense shall issue and deliver to
the person or persons entitled to receive the same a certificate or
certificates for the number of shares issuable upon such exercise.
5. Cashless Exercise. No cashless exercise shall be permitted.
6. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.
7. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor and amount.
8. Rights of Stockholders. Subject to Sections 11 and 13 of this
Warrant, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, or change of stock to no par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until
the Warrant shall have been exercised as provided herein.
9. Transfer of Warrant.
(a) Warrant Register. The Company will maintain a
register (the "Warrant Register") containing the name and address of the
Holder. The Holder of this Warrant may change its address as shown on the
Warrant Register by written notice to the Company requesting such change. Any
notice or written communication required or permitted to be given to the
Holder may be delivered or given by mail to such Holder as shown on the
Warrant Register and at the address shown on the Warrant Register. The Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for all purposes, notwithstanding any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to
the Holder, appoint an agent for the purpose of maintaining the Warrant
Register referred to in Section 9(a) above, issuing the Common Stock or other
securities then issuable upon the exercise of this Warrant, exchanging this
Warrant, replacing this Warrant, or any or all of the foregoing. Thereafter,
any such registration, issuance, exchange, or replacement, as the case may
be, shall be made at the office of such agent.
(c) Transferability and Non-negotiability of Warrant.
This Warrant may not be transferred or assigned in whole or in part.
(d) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being or will be acquired solely for the
Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder (A) will not offer, sell or otherwise dispose
of this Warrant, and (B) will not offer, sell or otherwise dispose of the
shares of Common Stock to be issued upon exercise hereof, except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended (the "Act") or any state securities laws. Upon exercise of
this Warrant, the Holder shall, if requested by the Company, confirm in
writing, in a form satisfactory to the Company, that the shares of Common
Stock so purchased are being acquired solely for the Holder's own account and
not as a nominee for any other party, for investment; and not with a view
toward distribution or resale in violation of the Act or any state securities
laws; and that the Holder continues to be an "accredited investor" as such
term is defined in Rule 501 of the Act.
(ii) The Holder understands that this Warrant
has not been registered under the Act by reason of a specific exemption
therefrom, that the Holder may be required to hold this Warrant and any shares
of Common Stock to be issued upon exercise hereof indefinitely, and that the
Holder must, therefore, bear the economic risk of such investment
indefinitely, unless a subsequent disposition of such Common Stock is
registered under the Act or is exempt from such registration.
(iii) All shares of Common Stock to be issued
upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws or the Company's certificate or bylaws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME
OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE
LAWS.
10. Reservation of Stock. The Company covenants that during-the
term this Warrant is exercisable, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant and, from time to
time, will take all steps necessary to amend its Certificate of Incorporation
(the "Certificate") to provide sufficient reserves of Common Stock issuable
upon exercise of the Warrant. The Company further covenants that all shares of
Common Stock that may be issued upon the exercise of rights represented by
this Warrant and payment of the Exercise Price, all as set forth herein, will
be free from all taxes, liens and charges in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously or
otherwise specified herein). The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of this Warrant.
11. Notices.
(a) Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 13 hereof, the
Company shall issue a certificate signed by its Chief Financial Officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the Exercise Price and number of shares purchasable hereunder after giving
effect to such adjustment, and shall cause a copy of such certificate to be
mailed (by first-class mail, postage prepaid) to the Holder of this Warrant.
(b) In case:
(i) The Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time
receivable upon the exercise of this Warrant) for the purpose of entitling
them to receive any dividend or other distribution, or any right to subscribe
for or purchase any shares of stock of any class or any other securities, or
to receive any other right, or
(ii) of any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or
any conveyance of all or substantially all of the assets of the Company to
another corporation, or
(iii) of any voluntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to
the Holder a notice specifying, as the case may be, (A) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
or (B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or such stock or securities at the time receivable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up. Such notice shall be
mailed at least 15 days prior to the xxxx therein specified.
(c) All such notices, advices and communications shall
be deemed to have been received (i) in the case of personal delivery, on the
date of such delivery and (ii) in the case of mailing, on the third business
day following the date of such mailing.
12. Amendments.
(a) Any term of this Warrant may be amended with the
written consent of the Company and the Holder.
(b) No waivers of, or exceptions to, any term, condition
or provision of this Warrant, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term,
condition or provision.
13. Adjustments. The Exercise Price and the number of shares of
Common Stock purchasable hereunder are subject to adjustment from time to time
as follows:
13.1 Merger, Sale of Assets, etc. If at any time while this
Warrant, or any portion hereof, is outstanding and unexpired there shall be
(i) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which
the Company is the surviving entity but the shares of the Company's capital
stock outstanding immediately prior to the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the holder of this Warrant shall thereafter be entitled
to receive upon exercise of this Warrant, during the term of this Warrant as
set forth in Section 1 and upon payment of the Exercise Price then in effect,
the number of shares of stock or other securities or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Warrant had been exercised immediately before
such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 13. The foregoing provisions of
this Section 13.1 shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers and to the stock or securities of
any other corporation that are at the time receivable upon the exercise of
this Warrant. If the per-share consideration payable to the holder hereof for
shares in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be
determined in good faith by the Company's Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction,
to the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this Warrant.
13.2 Reclassification, etc. If the Company, at any time while
this Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the
securities as to which purchase rights under this Warrant exist into the same
or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind
of securities as would have been issuable as the result of such change with
respect to the securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other change and the
Exercise Price therefor shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 13.
13.3 Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion hereof, remains
outstanding and unexpired shall split or subdivide, otherwise than as set
forth in Section 13.4, or combine the securities as to which purchase rights
under this Warrant exist, into a different number of securities of the same
class, the Exercise Price for such securities shall be proportionately
decreased in the case of a split or subdivision or proportionately increased
in the case of a combination, and the number of shares purchasable hereunder
shall be proportionally increased in the case of a split or subdivision or
proportionally decreased in the case of a combination.
13.4 Adjustments for Dividends in Stock or Other Securities or
Properly. If while this Warrant, or any portion hereof, remains outstanding
and unexpired, the holders of the securities as to which purchase rights under
this Warrant exist at the time shall have received, or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock or
other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right to
acquire, in addition to the number of shares of the security receivable upon
exercise of this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) of the Company that such holder would hold on the
date of such exercise had it been the holder of record of the security
receivable upon exercise of this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date
of such exercise, retained such shares and/or all other additional stock
available by it as aforesaid during such period, giving effect to all
adjustments called for during such period by the provisions of this Section 13.
14. Information. So long as the Holder holds the Warrant and/or
shares of Common Stock, the Company shall deliver to the Holder, promptly
after mailing, copies of all notices, reports, financial statements, proxies
or other written communication delivered or mailed to the holders of the
Common Stock.
15. Descriptive Headings and Governing Law. The description
headings of the several sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. This
Warrant shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of California without
regard to conflicts of law provisions.
16. No Ongoing Obligations. Nothing contained in this Warrant or
the Warrant Agreement shall prevent the Company from terminating its
distribution agreement with the Holder pursuant to its terms and any such
termination shall in no way entitle the Holder to any annualization of Resale
Revenue; provided that if the Company terminates the relevant distribution
agreement not for cause, then the number of shares to be vested and the
respective Resale Revenue Targets set forth in Section 1 shall be adjusted pro
rata based upon the fraction resulting from (a) the number of days from
January 1, 2003 to the effective date of such termination divided by (b) 365.
In such event, the Notification Date shall be a maximum of 60 days after the
effective date of such termination, and the Warrant shall be exercisable for a
period of three years from such Notification Date.
17. Taxes. The Warrant holder is responsible for payment of all
applicable taxes, both U.S. and non-U.S., as required by the taxing
jurisdiction. Exercise of the warrant is agreement that all such amounts will
be paid as required by the holder in an appropriate and timely manner.
IN WITNESS WHEREOF, ZiLOG, Inc. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: January 20, 2003
ZiLOG, Inc.
By: _______________________________
Name: Xxxxx Xxxxx
Title: CFO VP Finance
Holder: Future Electronics Inc.
By: _______________________________
Name:
Title:
NOTICE OF EXERCISE
To: ZiLOG, Inc.
1. The undersigned hereby elects to purchase _________ shares of Common Stock
of ZiLOG, Inc., pursuant to the provisions of Section 3(a) of the attached
Warrant, and tenders herewith payment of the purchase price for such shares in
Full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws.
3. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
____________________________________
(Name)
By: ____________________________________
Name:
Title:
Date:
