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EXHIBIT 99.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into as of
March 8, 2001, by and between Data Dimensions, Inc., a Delaware corporation (the
"Company"), and Lionbridge Technologies, Inc., a Delaware corporation ("LTI").
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Company, LTI and Diamond Acquisition Corp., a Delaware corporation and a
newly-formed, wholly-owned direct subsidiary of LTI ("Merger Sub"), are entering
into an Agreement and Plan of Reorganization, dated as of the date hereof (the
"Merger Agreement"), which provides, among other things, for a business
combination between Parent and the Company to be effected by the merger of
Merger Sub with and into the Company upon the terms and subject to the
conditions of the Merger Agreement; and
WHEREAS, as a condition to LTI's willingness to enter into the Merger
Agreement, LTI has requested that the Company agree, and the Company has agreed,
to grant the Option (as hereinafter defined) to LTI upon the terms and subject
to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Grant of Option. The Company hereby grants to LTI an irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to a number
of shares (the "Option Shares") of fully paid and nonassessable common stock,
par value $0.001 per share, of the Company ("Company Common Stock"), equal to
19.9% of the number of shares of Company Common Stock issued and outstanding
(before giving effect to the exercise of the Option) as of the first date, if
any, upon which an Option Commencement Event (as hereinafter defined) occurs, at
a purchase price per share (the "Option Price") equal to the product of the
Conversion Ratio (as defined in the Merger Agreement) multiplied by the Parent
Average Closing Price (as defined in the Merger Agreement). The number and type
of Option Shares and the Option Price are subject to adjustment as set forth
herein.
2. Exercise of Option. (a) LTI may exercise the Option, in whole or in
part and from time to time, beginning immediately prior to an Option
Commencement Event that occurs prior to the occurrence of an Option Termination
Event (as hereinafter defined). The right to exercise the Option shall terminate
upon the one year anniversary of the date of the Option Commencement Event (the
"Option Expiration Date").
(b) The term "Option Commencement Event" shall mean the
consummation of an Acquisition Transaction (as defined in the Merger Agreement)
by the Company with a party other than LTI.
(c) The term "Option Termination Event" shall mean any of the
following events:
(i) the Effective Time of the Merger; or
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(ii) termination of the Merger Agreement pursuant to
Section 9.1 or 9.3(b); or
(iii) the occurrence of the date which is nine months
after termination of the Merger Agreement (or such later period as
provided in Section 8, provided no Option Commencement Event has
occurred prior to the occurrence of such date).
(d) The Company shall notify LTI in writing as promptly as
practicable (but in no event later than 3 business days) following the
occurrence of any Option Commencement Event, it being understood that the giving
of such notice by the Company shall not be a condition to the right of LTI to
exercise the Option or for an Option Commencement Event to have occurred.
(e) In the event that LTI desires to exercise the Option, it
shall deliver to the Company a written notice (such notice being herein referred
to as an "Exercise Notice" and the date of issuance of an Exercise Notice being
herein referred to as the "Notice Date") specifying (i) the total number of
Option Shares it desires to purchase pursuant to such exercise and (ii) a place
and date, not earlier than three business days nor later than 60 business days
from the Notice Date, for the closing of such purchase (the "Option Closing
Date"); provided, that if the closing of the purchase and sale pursuant to the
Option (the "Option Closing") cannot be consummated, by reason of any applicable
decree, injunction or order, the period of time that otherwise would run
pursuant to this Section 2(e) shall run instead from the date on which such
restriction on consummation has expired or been terminated; and provided
further, without limiting the foregoing, that if, in the reasonable opinion of
LTI, prior notification to or approval of any regulatory agency is required in
connection with such purchase, the Company or LTI, as the case may be, shall
promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have been
obtained and any requisite waiting period or periods shall have passed.
(f) At the Option Closing, LTI shall pay to the Company the
aggregate Option Price for the number of shares of Company Common Stock or other
securities being purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by the Company;
provided that failure or refusal of the Company to designate such a bank account
shall not preclude LTI from exercising the Option.
(g) At the Option Closing, simultaneously with the delivery of
immediately available funds as provided in Section 2(f) hereof, the Company
shall deliver to LTI a certificate or certificates representing the number of
Option Shares purchased by LTI and, if the Option should be exercised in part
only, a new Agreement evidencing the rights of LTI thereof to purchase the
balance of the Option Shares purchasable hereunder. If at the time of issuance
of any Option Shares pursuant to an exercise of all or part of the Option
hereunder, the Company shall have issued any rights or other securities which
are attached to or otherwise associated with the Company Common Stock, then each
Option Share issued pursuant to such exercise shall also represent such rights
or other securities with terms substantially the same as and at least as
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favorable to LTI as are provided to stockholders generally and, if applicable,
under any stockholder rights agreement or similar agreement of the Company then
in effect.
(h) Certificates for Option Shares delivered at an Option Closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESALE RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED."
It is understood and agreed that the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "Securities Act"),
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if LTI shall have delivered to the Company a copy of a
letter from the staff of the Securities and Exchange Commission (the "SEC"), or
an opinion of counsel reasonably satisfactory to the Company, to the effect that
such legend is not required for purposes of the Securities Act.
(i) Upon the delivery by LTI to the Company of the Exercise
Notice, and the tender of the applicable Option Price in immediately available
funds, LTI shall be deemed to be the holder of record of the Option Shares
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such Option
Shares shall not then be actually delivered to LTI or the Company shall have
failed or refused to designate the bank account described in Section 2(f). The
Company shall pay all expenses that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section 2 in
the name of LTI. LTI shall pay all expenses that may be payable in connection
with the issuance and delivery of stock certificates or a substitute option
agreement in the name of any assignee, transferee or designee of LTI.
3. Covenants of the Company. In addition to its other agreements and
covenants herein, the Company agrees (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued or treasury
shares of Company Common Stock (and other securities of the Company) issuable
pursuant to this Agreement so that the Option may be exercised without
additional authorization of Company Common Stock after giving effect to all
other options, warrants, convertible securities and other rights to purchase
Company Common Stock; (ii) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or performance of any
of the covenants, stipulation or conditions to be observed or performed
hereunder by the Company; (iii) promptly to take any and all action as may from
time to time be required (including complying with all premerger notification,
reporting and waiting requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder) in order to permit LTI to exercise the Option and the Company to
duly and effectively issue Option Shares pursuant hereto; (iv) promptly to take
all action provided herein to protect the rights of LTI against dilution; and
(v) not to enter or agree to enter into any Acquisition Transaction unless the
other party or parties thereto agree to assume in writing all of the Company's
obligations hereunder.
4. Exchange; Replacement. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of LTI, upon presentation and
surrender of this
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Agreement at the principal office of the Company, for other agreements providing
for Options of different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Company Common Stock purchasable
hereunder. The terms "Agreement" and "Option" as used herein include any
agreements and related options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, the Company will execute and deliver a new Agreement of
like tenor and date.
5. Adjustments. The number of shares of Company Common Stock purchasable
upon the exercise of the Option shall be subject to adjustment from time to time
as provided in this Section 5. In the event of any change, or distributions in
respect of, in Company Common Stock by reason of stock dividends, splits,
mergers, recapitalizations, combinations, subdivisions, conversions, exchanges
of shares or other similar transactions, then that which is then purchasable
upon exercise hereof shall be appropriately adjusted so that LTI shall receive
upon exercise of the Option and payment of the aggregate Option Price hereunder
the number and class of shares or other securities or property (including cash)
that LTI would have owned or been entitled to receive after the happening of any
of the events described above if the Option had been exercised immediately prior
to such event, or the record date therefor, as applicable. Whenever the number
of shares of Company Common Stock subject to this Option is adjusted pursuant to
this Section 5, the Option Price shall be appropriately adjusted in such manner
as shall fully preserve the economic benefits provided hereunder and proper
provision shall be made in any agreement governing any such transaction to
provide for such proper adjustment and the full satisfaction of the Company's
obligations hereunder.
6. Registration Rights. Following an Option Commencement Event, the
Company shall, at the request of (i) LTI for as long as it is an Owner (as
defined in Section 7) or (ii) any other Owner (collectively, (i) and (ii) are
hereinafter referred to as "Requesting Owners"), promptly prepare, file and keep
current a shelf registration statement under the Securities Act covering any
shares issued and issuable pursuant to this Option (collectively, the
"Registrable Securities") and shall use its reasonable best efforts to cause
such registration statement to become effective and remain current in order to
permit the sale or other disposition in accordance with any plan of disposition
requested by the Requesting Owners. The Company will use its reasonable best
efforts to cause such registration statement promptly to become effective and
then to remain effective for a period not in excess of 180 days from the day
such registration statement first becomes effective or such shorter time as may
be reasonably necessary, in the judgment of the Requesting Owner(s), to effect
such sales or other dispositions. The Requesting Owners shall each have the
right to demand two such registrations. The Company shall bear the costs of such
registrations (including, but not limited to, the Company's attorneys' fees,
printing costs and filing fees, except for underwriting discounts or
commissions, brokers' fees and the fees and disbursements of any Requesting
Owner's counsel related thereto). The foregoing notwithstanding, if, at the time
of any request by any Requesting Owner for registration of the Registrable
Securities as provided above, the Company is in registration with respect to an
underwritten public offering of shares of Company Common Stock, and if in the
good faith
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judgment of the managing underwriter or managing underwriters, or, if none, the
sole underwriter or underwriters, of such offering the inclusion of the
Registrable Securities would interfere with the successful marketing of the
shares of Company Common Stock offered by the Company, the number of Registrable
Securities otherwise to be covered in the registration statement contemplated
hereby may be reduced; provided, however, that after any such required reduction
the number of Registrable Securities to be included in such offering for the
account of each Requesting Owner shall constitute at least 25% of the total
number of shares to be sold by all such Requesting Owners and the Company in the
aggregate; and provided further, however, that if such reduction occurs, then
the Company shall file a registration statement for the balance of such shares
of Company Common Stock issuable pursuant to this Option as promptly as
practical following such reduction and no reduction in the number of shares of
Company Common Stock to be sold by each such Requesting Owner shall thereafter
occur. Each Requesting Owner shall provide all information reasonably requested
by the Company for inclusion in any registration statement to be filed
hereunder. If requested by any such Requesting Owner in connection with such
registration, the Company shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and other agreements
customarily included in secondary offering underwriting agreements for the
Company..
7. Repurchase of Option and/or Option Shares.
(a) At any time after the occurrence of a Repurchase Event (as
defined herein), (i) following a request of LTI, given prior to an Option
Expiration Date (or such later period provided in Section 10), the Company (or
any successor thereto) shall repurchase the Option from LTI at a price (the
"Option Repurchase Price") equal to the amount by which (A) the Competing
Transaction Price (as defined below) exceeds (B) the Option Price, multiplied by
the maximum number of shares for which the Option may then be exercised by LTI,
and (ii) at the request of the owner of Option Shares from time to time (the
"Owner"), delivered within 90 days of such occurrence (or such later period as
provided in Section 10), the Company shall repurchase such number of Option
Shares from the Owner as the Owner shall designate at a price (the "Option Share
Repurchase Price") equal to the amount by which (A) the Competing Transaction
Price exceeds (B) the Option Price, multiplied by the number of Option Shares so
designated. The term "Competing Transaction Price" shall mean, as of any date
for the determination thereof, the price per share of Company Common Stock paid
to the stockholders of the Company by a third party pursuant to any Acquisition
Transaction, including the highest price per share offered by way of tender
offer or exchange offer, and, in the event of an Acquisition Transaction
consisting of a sale of assets of the Company, the last per share sale price of
Company Common Stock on the third trading day following the announcement of such
sale. If the consideration paid or received in the Competing Transaction shall
be other than in cash, the per share value of such consideration (on a fully
diluted basis) shall be determined by a nationally recognized investment banking
firm selected by LTI and reasonably acceptable to the Company, which
determination shall be conclusive for all purposes of this Agreement.
(b) Following a Repurchase Event, LTI or the Owner, as the case
may be, may exercise its right to require the Company to repurchase the Option
and any Option Shares pursuant to this Section 7 by surrendering for such
purpose to the Company, at its principal officer, a copy of this Agreement or
certificates for Option Shares, as applicable, accompanied by
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a written notice or notices stating that LTI or the Owner, as the case may be,
elects to require the Company to repurchase this Option and/or the Option Share,
as the case may be, in accordance with the provisions of this Section 7. As
promptly as practical, but in no event later than five business days after the
surrender to the Company of a copy of this Agreement and/or certificates
representing Option Shares and the receipt of such notice or notices relating
thereto and (y) the day on which a Repurchase Event occurs, the Company shall
deliver or cause to be delivered, in immediately available funds, to LTI the
Option Repurchase Price and/or to the Owner the Option Share Repurchase Price or
portion thereof that the Company is not then prohibited under applicable law and
regulation from so delivering.
(c) To the extent that the Company is prohibited under applicable
law from repurchasing the Option or any Option Shares in full, the Company shall
immediately so notify LTI and/or the Owner and thereafter deliver or cause to be
delivered, from time to time, to LTI and/or the Owner, as appropriate, the
portion of the Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is required to deliver pursuant hereto and that it is no
longer prohibited from delivering, within five business days after the date on
which the Company is no longer so prohibited; provided, however, that if the
Company at any time after delivery of a notice of repurchase pursuant to Section
7(b) hereof is prohibited under applicable law, from delivering to LTI and/or
the Owner, as the case may be, the Option Repurchase Price or the Option Share
Repurchase Price, respectively, in full (and the Company hereby undertakes to
use its best efforts to obtain all required regulatory and legal approvals and
to file any required notices as promptly as practicable in order to accomplish
such repurchase), LTI or the Owner may revoke its notice of repurchase of the
Option or the Option Shares either in whole or to the extent of the prohibition,
whereupon, in the latter case, the Company shall promptly (i) deliver to LTI
and/or the Owner, as appropriate, that portion of the Option Repurchase Price or
the Option Share Repurchase Price that the Company is not prohibited from
delivering after taking into account any such revocation and (ii) deliver, as
appropriate, either (A) to LTI and/or the Owner, a new Agreement evidencing the
right of LTI to purchase that number of shares of Company Common Stock equal to
the number of shares of Company Common Stock purchasable immediately prior to
the delivery of the notice of repurchase less the number of shares of Company
Common Stock covered by the portion of the Option repurchased or (B) to LTI
and/or the Owner, a certificate for the number of Option Shares covered by the
revocation. If an Option Termination Event shall have occurred prior to the date
of the notice by the Company described in the first sentence of this Section
8(c), or shall be scheduled to occur at any time after the date of an Option or
Option Share repurchase request but before the expiration of a period ending on
the thirtieth day after such notice date, LTI shall nonetheless have the right
to exercise the Option until the expiration of such thirty-day period.
(d) For purposes of this Section 7, the term "Repurchase Event"
shall mean the consummation of an Acquisition Transaction.
8. Extension of Time. The periods related to exercise of the Option,
repurchase of the Option and/or Option Shares by the Company and the other
rights of LTI hereunder shall be extended (i) to the extent necessary to obtain
all regulatory approvals for the exercise of such rights, and for the expiration
of all statutory waiting periods and (ii) to the extent necessary to avoid
liability under Section 16(b) of the Exchange Act by reason of such exercise.
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9. Representations and Warranties of the Company. The Company hereby
represents and warrants to LTI as follows:
(a) The Company has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
board of directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by the Company.
(b) The Company has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the date
hereof through the termination of this Agreement in accordance with its terms
will have reserved for issuance upon the exercise of the Option, that number of
shares of Company Common Stock equal to the maximum number of shares of Company
Common Stock at any time and from time to time issuable hereunder, and all such
shares of Company Common Stock, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, nonassessable, and will be delivered
free and clear of all liens and not subject to any preemptive rights.
(c) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation pursuant to any provisions of the certificate
of incorporation or bylaws of the Company or any subsidiary of the Company, or
of any loan or credit agreement, note, mortgage, indenture, lease, plan or other
agreement, contractual obligation, instrument, permit, concession, franchise or
license applicable to the Company or any subsidiary of the Company or their
respective properties or assets.
(d) No "fair price", "moratorium", "control share acquisition" or
other similar anti-takeover statute or regulation enacted under state or federal
laws applicable to the Company or any of its subsidiaries will apply to this
Agreement or the transactions contemplated hereby. The Company has taken, and
will in the future take, all steps necessary to irrevocably exempt the
transactions contemplated by this Agreement from any other applicable state
takeover law and from any applicable charter provision containing change of
control or anti-takeover provisions.
10. Representations and Warranties of LTI. LTI hereby represents and
warrants to LTI as follows:
(a) LTI has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
board of directors of LTI and no other corporate proceedings on the part of LTI
are necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered by
LTI.
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(b) LTI represents and warrants that it is entering into this
Agreement and is acquiring and/or will acquire the Option Shares for its own
account and not with a view to resale or distribution of all or any part of the
Option Shares in violation of applicable law.
11. Assignment. Neither of the parties hereto may assign any of its
rights or obligations under this Agreement or the Option created hereunder to
any other person without the express written consent of the other party.
12. Best Efforts. Each of LTI and the Company will use its reasonable
best efforts to make all filings with, and to obtain consents of, all third
parties and Governmental Entities necessary to the consummation of the
transactions contemplated by this Agreement, including without limitation making
application to list the shares of Company Common Stock issuable hereunder on the
Nasdaq National Market of The Nasdaq Stock Market upon official notice of
issuance.
13. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement by either party
hereto and that the obligations of the parties hereto shall be enforceable by
either party hereto through injunctive or other equitable relief.
14. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule or law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
15. Notices. All notices, claims, demands and other communications
hereunder shall be deemed to have been duly given or made when delivered in
person, by registered or certified mail (postage prepaid, return receipt
requested), by overnight courier or by facsimile at the respective addresses of
the parties set forth in the Merger Agreement,
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which
shall constitute one and the same agreement.
18. Definitions. Capitalized terms used and not defined herein shall
have the meanings set forth in the Merger Agreement.
19. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
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20. Entire Agreement. Except as otherwise expressly provided herein or
in the Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein. Any provision of this Agreement may be waived only in writing at any
time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
21. Further Assurances. In the event of any exercise of the Option by
LTI, the Company and LTI shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary to the
fullest extent permitted by law in order to consummate the transactions provided
for by such exercise. Nothing contained in this Agreement shall be deemed to
authorize the Company or LTI to breach any provision of the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Stock
Option Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
LIONBRIDGE TECHNOLOGIES, INC.
By:
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Signature
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Xxxx X. Xxxxx
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Chief Executive Officer
DATA DIMENSIONS, INC.
By:
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Signature
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Xxxxx X. Xxxxx
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Chief Executive Officer and President
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