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Exhibit (c)(5)
STOCKHOLDER AGREEMENT
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STOCKHOLDER AGREEMENT (this "AGREEMENT"), dated as of August
2, 1999, among ▇▇▇▇▇▇ Corporation, a Delaware corporation ("PARENT"), Space
Coast Merger Corp., a California corporation and a wholly owned subsidiary of
Parent ("SUB"), and the undersigned stockholder (the "STOCKHOLDER") of Pacific
Research & Engineering Corporation, a California corporation (the "COMPANY").
WHEREAS, Parent, Sub and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "MERGER AGREEMENT") to provide for the making of a
cash tender offer (as such offer may be amended from time to time, the "OFFER")
by Sub for any and all shares of Common Stock, no par value, of the Company (the
"SHARES") and for any and all Shareholder Warrants (as defined in the Merger
Agreement), Representative Warrants (as defined in the Merger Agreement) and the
Executive Warrant (as defined in the Merger Agreement, and collectively with the
Shareholder Warrants and the Representative Warrants, the "WARRANTS") at the
Applicable Offer Price (as defined in the Merger Agreement) and the merger of
the Company and Sub (the "MERGER");
WHEREAS, the Stockholder legally and/or beneficially owns that
number of Shares and Warrants appearing on the signature page hereof (such
shares and warrants, as they may be increased upon any purchase of Shares or
Warrants or upon exercise of any option or warrant to purchase Shares or
Warrants as they may be adjusted by any stock dividend, stock split,
recapitalization, combination or exchange of shares, merger, consolidation,
reorganization or other change or transaction of or by the Company (each, an
"ADJUSTMENT EVENT") being referred to herein as the "SUBJECT SHARES" and the
"SUBJECT WARRANTS," respectively); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent and Sub have requested that the Stockholder enter into
this Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder hereby represents and warrants to Parent and Sub as follows:
(a) AUTHORITY. The Stockholder has all requisite capacity,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with
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its terms. The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby and compliance
with the terms hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time or
both) under any provision of, any trust agreement, loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order,
notice, decree, statute, law, ordinance, rule or regulation applicable
to the Stockholder or to the Stockholder's property or assets. Except
for informational filings with the SEC, no consent, approval, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Stockholder in connection with the
execution and delivery of this Agreement or the consummation by the
Stockholder of the transactions contemplated hereby.
(b) THE SUBJECT SHARES. The Stockholder has good and
marketable title to the Subject Shares and Subject Warrants, free and
clear of any claims, liens, encumbrances and security interests
whatsoever. The Stockholder owns no Shares or Warrants other than the
Subject Shares and Subject Warrants. The Stockholder owns options and
warrants to purchase Shares as described in reasonable detail on
SCHEDULE 1.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
(a) AUTHORITY. Parent and Sub hereby represent and warrant to
the Stockholder that each of Parent and Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has been
duly executed and delivered by Parent and Sub and constitutes a valid
and binding obligation of Parent and Sub enforceable in accordance with
its terms.
3. COVENANTS OF THE STOCKHOLDER. The Stockholder agrees as
follows:
(a) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) the Subject
Shares in favor of the Merger, the approval of the Merger Agreement and
the approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares
against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger),
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consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the
Company or any other Takeover Proposal or (ii) any amendment of the
Company's Articles of Incorporation or By-laws or other proposal or
transaction involving the Company or any of its affiliates, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any
of the other transactions contemplated by the Merger Agreement.
(c) The Stockholder agrees not to (i) sell, transfer, pledge,
assign or otherwise dispose of, or enter into any contract, option or
other arrangement (including any profit sharing arrangement) with
respect to the sale, transfer, pledge, assignment or other disposition
of, the Subject Shares or Subject Warrants (or any option or warrant to
purchase Shares or Warrants, except for any sale or transfer to the
Company) to any person other than Sub or Sub's designee or (ii) enter
into any voting arrangement, whether by proxy, voting agreement or
otherwise, in connection, directly or indirectly, with any Takeover
Proposal.
(d) The Stockholder shall not, nor shall the Stockholder
permit any investment banker, attorney or other adviser or
representative of the Stockholder to, (i) directly or indirectly
solicit, initiate or encourage the submission of, any Takeover Proposal
or (ii) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected
to lead to, any Takeover Proposal, or (iii) enter into any agreement
with respect to or approve or recommend any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated,
the Stockholder shall tender pursuant to the Offer, and not withdraw,
all of the Subject Shares and Subject Warrants, except that the
Stockholder shall not be obligated to tender the Subject Shares
pursuant to the Offer until September 30, 1999 or any time thereafter
(so long as the Offer has not expired or been withdrawn by Sub).
4. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign any or all of its rights, interests and obligations hereunder, in its
sole discretion, to Parent or, with the consent of the Stockholder, which
consent shall not be unreasonably withheld or delayed, to any direct or indirect
wholly owned subsidiary of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns and, in the case of the
Stockholder, the heirs, executors and administrators of the Stockholder.
5. TERMINATION. This Agreement shall terminate upon the earliest of the
following events (each a "TERMINATION EVENT"):
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(a) the Effective Time (as defined in the Merger Agreement);
(b) the termination of the Merger Agreement pursuant to
Section 8.1 thereof, other than:
(i) a termination under Section 8.1(d) thereof
because the Board of Directors of the Company or any committee
thereof has withdrawn or modified its approval or
recommendation of the Offer, the Merger or the Merger
Agreement, as provided in paragraph d(i) of Exhibit C to the
Merger Agreement, or because the Board of Directors of the
Company or any committee thereof has adopted a resolution to
effect any of the foregoing, as provided in paragraph d(ii) of
Exhibit C to the Merger Agreement, if prior to the time of
such withdrawal or modification, or the adoption of such
resolution, a Takeover Proposal shall have been made; or
(ii) a termination under Section 8.1(d) thereof
because the Board of Directors of the Company or any committee
thereof has approved or recommended a Takeover Proposal, as
provided in paragraph d(i) of Exhibit C to the Merger
Agreement, or because the Board of Directors of the Company or
any committee thereof has adopted a resolution to effect such
approval or recommendation, as provided in paragraph d(ii) of
Exhibit C to the Merger Agreement; or
(iii) a termination of the Merger Agreement under
Section 8.1(e) thereof (the termination described in clauses
(i), (ii) and (iii) being referred to herein as the
"TERMINATION TRIGGER EVENTS");
(c) 60 days following any termination of the Merger Agreement
that constitutes a Termination Trigger Event; or
(d) the amendment of the Merger Agreement in a manner adverse
to the Stockholder without the Stockholder's consent, which consent
shall not be unreasonably withheld or delayed.
6. NO LIMITATIONS ON ACTIONS OF THE STOCKHOLDER AS A DIRECTOR,
OFFICER OR EMPLOYEE. Notwithstanding anything to the contrary in this Agreement,
nothing in this Agreement is intended or shall be construed to require the
Stockholder to take or in any way limit any action that the Stockholder may take
to discharge the Stockholder's duties as a director, officer or employee of the
Company, including fiduciary duties.
7. RELIANCE ON COUNSEL AND OTHER ADVISORS. Each of the parties
hereto has consulted with such legal, financial, technical or other experts it
deems necessary or desirable before entering into this Agreement. Each of the
parties hereto represents and warrants that it has read, knows, understands and
agrees with the terms and conditions of this Agreement. None of the parties
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hereto has relied upon any oral representations of the other party in entering
into this Agreement.
8. GENERAL PROVISIONS.
(a) EXPENSES. Except as otherwise expressly provided herein or
in the Merger Agreement, all costs and expenses incurred in connection
with the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) SPECIFIC PERFORMANCE. The parties recognize and agree that
if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise
breached, immediate and irreparable harm or injury would be caused for
which money damages would not be an adequate remedy. Accordingly, each
party agrees that, in addition to other remedies, the other party shall
be entitled to an injunction restraining any violation or threatened
violation of the provisions of this Agreement. In the event that any
action should be brought in equity to enforce the provisions of the
Agreement, none of the parties will allege, and each of the parties
hereby waives the defense, that there is an adequate remedy at law.
Each party hereby irrevocably submits to the exclusive jurisdiction of
the United States District Court for the Southern District of
California in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding
shall be brought only in such courts (and waives any objection based on
forum non conveniens or any other objection to venue therein).
(c) NOTICE. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or
delivered (i) when delivered personally, (ii) if transmitted by Fax
when confirmation of transmission is received, or (iii) if sent by
registered or certified mail, return receipt requested, or by private
courier, when received; and shall be addressed as follows:
if to Parent or Sub, to:
▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Corporate Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall
not constitute notice) to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Stockholder, to:
▇▇▇▇▇▇ ▇▇▇▇
c/o Pacific Research & Engineering Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy (which shall
not constitute notice) to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as such party may indicate by a notice
delivered to the other parties in accordance with this section.
(d) PARTIES IN INTEREST. Nothing in this Agreement, expressed
or implied, is intended to confer upon any Person other than Parent,
Sub or the Stockholder, or their permitted successors or assigns, any
rights or remedies under or by reason of this Agreement.
(e) ENTIRE AGREEMENT; AMENDMENTS; WAIVER. This Agreement
constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them
with respect to the subject matter hereof. This Agreement may be
amended by the parties hereto and the terms and conditions hereof may
be waived only by an instrument in writing signed on behalf of each of
the parties hereto, or, in the case of a waiver, by an instrument
signed on behalf of the party waiving compliance.
(f) HEADINGS. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
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(g) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same agreement, and
shall become binding when such counterparts have been signed by each of
the parties hereto and delivered to each of the other parties.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to the
conflicts of law provisions) of the State of California.
(i) CAPITALIZED TERMS. Capitalized terms not otherwise defined
in this Agreement shall have the meanings set forth in the Merger
Agreement.
(j) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other terms, conditions and
provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic and legal substance of the
transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced,
the parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the transactions
contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
(k) WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH
SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES
THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II)
EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV)
EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS CLAUSE (k).
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IN WITNESS WHEREOF, each of Parent, Sub and the Stockholder
has caused this Agreement to be signed by its officer thereunto duly authorized
and the Stockholder has signed this Agreement, all as of the date first written
above.
▇▇▇▇▇▇ CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President - Treasurer
SPACE COAST MERGER CORP.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President - Treasurer
STOCKHOLDER
/s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Number of Shares owned by the
Stockholder on the date hereof:
124,980
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SCHEDULE 1
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Number of Shares Purchase price Expiration date Exercise date
subject to options per Share of option or of option or
or warrants warrant warrant
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73,500 $3.6250 7/22/2008 7/22/98
