Exhibit A.
VOTING AND OPTION AGREEMENT
VOTING AND OPTION AGREEMENT dated as of December 10, 2000 by
and among Robert Bosch GmbH, a limited liability company organized under
the laws of Germany ("Bosch"), Karl H. Kostusiak ("Kostusiak") and David B.
Lederer ("Lederer"; together with Kostusiak, the "Shareholders").
WHEREAS, Bosch and Detection Systems, Inc. (the "Company") have
entered into an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement"), pursuant to which the parties thereto have agreed,
upon the terms and subject to the conditions set forth therein, to merge
the Company with and into a wholly owned subsidiary of Bosch (the "Merger")
(capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Merger Agreement);
WHEREAS, as of the date hereof, Kostusiak and Lederer are the
record and beneficial owners of, or have the sole right to vote and dispose
of, 383,721 and 203,037 shares (the "Shares") of the Common Stock, $.05 par
value, of the Company (the "Company Common Stock"), respectively; and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Bosch has required that each Shareholder agree, and each
of the Shareholders is willing to agree, to the matters set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
agreements set forth below, the parties hereto agree as follows:
1. Representations and Warranties of Shareholders. Each
Shareholder severally represents and warrants to Bosch as follows:
1.1 Binding Agreement. Such Shareholder has the capacity
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Such Shareholder has duly and validly executed and
delivered this Agreement and this Agreement constitutes a legal, valid and
binding obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether enforceability is considered in a
proceeding in equity or at law).
1.2 No Conflict. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby,
nor the compliance with any of the provisions hereof, (a) in the case of
such Shareholder, require any consent, approval, authorization or permit
of, registration, declaration or filing (except for filings under the
Exchange Act) with, or notification to, any governmental entity, (b) result
in a default (or an event which, with notice or lapse of time or both,
would become a default) or give rise to any right of termination by any
third party, cancellation, amendment or acceleration under any contract,
agreement, instrument, commitment, arrangement or understanding, or result
in the creation of a security interest, lien, charge, encumbrance, equity
or claim with respect to any of the Shares, (c) require any material
consent, authorization or approval of any person other than a governmental
entity, or (d) violate or conflict with any order, writ, injunction, decree
or law applicable to such Shareholder or the Shares.
1.3 Ownership of Shares. Kostusiak and Lederer are the
record and beneficial owners of, or otherwise have the right to dispose of,
383,721 and 203,037 shares of Company Common Stock, respectively, free and
clear of any security interests, liens, charges, encumbrances, equities,
claims, options (other than the Option or pledges pursuant to commercially
customary brokers margin accounts which would not restrict the exercise of
the Option upon payment of the margin loan) or limitations of whatever
nature and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of the Shares).
There are no outstanding options or other rights to acquire from such
Shareholder or obligations of such Shareholder to sell or to acquire, any
shares of Company Common Stock.
2. Representations and Warranties of Bosch. Bosch represents
and warrants to each of the Shareholders as follows:
2.1 Binding Agreement. Bosch is a limited liability
company duly organized, validly existing and in good standing under the
laws of Germany and has full power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Bosch and the consummation of
the transactions contemplated hereby have been duly and validly authorized
by the Board of Management of Bosch. Bosch has duly and validly executed
this Agreement and this Agreement constitutes a legal, valid and binding
obligation of Bosch, enforceable against Bosch in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity or at
law).
2.2 No Conflict. Neither the execution and delivery of
this Agreement, the consummation by Bosch of the transactions contemplated
hereby, nor the compliance by Bosch with any of the provisions hereof will
(a) conflict with or result in a breach of any provision of its articles of
organization, by-laws or other similar organizational documents, (b)
require any consent, approval, authorization or permit of, registration,
declaration or filing (except for filings under the Exchange Act) with, or
notification to, any governmental entity, (c) result in a default (or an
event which, with notice or lapse of time or both, would become a default)
or give rise to any right of termination by any third party, cancellation,
amendment or acceleration under any contract, agreement, instrument,
commitment, arrangement or understanding.
3. Transfer and Other Restrictions.
3.1 Certain Prohibited Transfers. Each Shareholder agrees
not to: (a) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, shares of Company Common Stock owned by
him, other than as provided in this Agreement;
(b) grant any proxies or enter into a voting agreement or
other arrangement with respect to any shares of Company Common Stock owned
by him, other than this Agreement; nor
(c) deposit any shares of Company Common Stock owned by him
into a voting trust.
3.2 Option
(a) Each of the Shareholders hereby grants to Bosch the
exclusive and irrevocable option to purchase (the "Option"), on the terms
and conditions hereinafter set forth, all of the Shares owned by him,
together with (i) any additional shares of capital stock of the Company
acquired by the Shareholder after the date hereof and prior to the exercise
of the Option, or which such Shareholder is entitled to receive from the
Company by reason of being a record holder during such period, and (ii) any
securities into which any such shares or additional shares shall have been
converted or changed whether by amendment to the Certificate of
Incorporation of the Company, merger, consolidation or otherwise.
(b) The Option may be exercised by Bosch in whole, but
not in part, at any time (the "Option Period") commencing January 2, 2001
and expiring, without any action by Bosch or the Shareholders, upon the
first to occur of the following: (a) Purchaser fails to commence the Offer
within 10 business days after the date hereof, except by reason of the
conditions set forth in paragraph (e) of Annex A to the Merger Agreement,
(b) Purchaser fails to purchase Shares pursuant to the Offer, by reason of
the conditions set forth in paragraphs (a), (b), (c), (d) or (g) of Annex A
to the Merger Agreement, (c) Bosch terminates the Merger Agreement pursuant
to Section 7.1(a), (b), (c) or (e)(ii),(iii) or (iv) of the Merger
Agreement, (d) the Company terminates the Merger Agreement pursuant to
Section 7.1(a), (b), (c) or (d)(iv) of the Merger Agreement or (e) the
Company terminates the Merger Agreement pursuant to Section 7.1(d)(ii) or
(iii) of the Merger Agreement, but only if the failure of Purchaser to
commence the Offer or purchase Shares is not due to the failure of the
condition set forth in paragraph (e) of Annex A to the Merger Agreement.
(c) In the event Bosch wishes to exercise the Option,
Bosch shall send a written notice to the Shareholders specifying a place
and date (not less than two nor more than ten business days from the date
such notice is given) for the closing of the purchase of the Shares (the
"Closing").
(d) The price to be paid for the Shares pursuant hereto
(the "Option Price") shall be $18 per Share, payable in cash.
(e) At the Closing, each Shareholder will deliver to
Bosch a certificate or certificates representing the Shares owned by him,
duly endorsed for transfer or accompanied by appropriate stock powers,
together with evidence satisfactory to Bosch of payment of all stock
transfer taxes or exemption therefrom and Bosch shall issue or deliver to
each Shareholder a cash amount to which such Shareholder is entitled
pursuant to clause (d) above.
(f) In the event that: (i) the Option is exercised, (ii)
the Merger is not consummated and (iii) any party other than Bosch and its
subsidiaries acquires, though merger or otherwise, all or substantially all
of the business or assets of the Company pursuant to a transaction or
series of transactions providing aggregate consideration to shareholders of
the Company greater than $18 per share of Company Common Stock (the
"Alternative Consideration"), then within 5 days following receipt of such
consideration by Bosch or its affiliates, Bosch shall pay to each of the
Shareholders the product of (x) the amount by which the Alternative
Consideration exceeds $18 and (y) the number of Shares sold by such
Shareholder to Bosch pursuant to the Option.
3.3 Tender. Each of the Shareholders agrees to tender
into the Offer the Shares owned by him or of which he otherwise has the
right to dispose, and to not withdraw such Shares unless and until the
Offer expires or is terminated.
3.4 Efforts. Each Shareholder agrees not to take any
action which would make any representation or warranty of the Shareholder
herein untrue or incorrect in any material respect or take any action that
would have the effect of preventing or disabling such Shareholder from
performing its obligations under this Agreement.
3.5 Additional Shares. Each Shareholder hereby agrees,
until the end of the Option Period, to promptly notify Bosch of the number
of any new shares of Company Common Stock acquired by the Shareholder, if
any, after the date hereof.
4. Voting Agreement. Each Shareholder hereby agrees to attend
all meetings of the shareholders of the Company. Each Shareholder retains
all voting rights with respect to the Shares owned by him; provided,
however, that at any meeting of the shareholders of the Company, however
called, or in connection with any action by written consent by the
shareholders of the Company, he shall vote all of the Shares owned by him:
(i) in favor of the transactions contemplated by the
Merger Agreement;
(ii) against any action or agreement that could result in
a breach in any material respect of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement;
(iii) against any action or agreement that would impede,
interfere with or discourage the transactions contemplated by the Merger
Agreement (or attempt to do any of the foregoing), including, but not
limited to: (A) any extraordinary corporate transaction, such as a merger,
rights offering, reorganization, recapitalization or liquidation involving
the Company or any of its subsidiaries, (B) a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or the
issuance of any securities of the Company or any subsidiary, (C) any change
in the executive officers or Board of Directors of the Company or (D) any
change in the present corporate structure or business of the Company; and
(iv) in the manner specified by Bosch from time to time
with respect to any other matter which is reasonably likely to contradict
any provision of this Agreement or the Merger Agreement or may make it more
difficult for or less desirable to Bosch to consummate the Merger or may
delay or hinder the consummation of the Merger.
5. Proxy. Each Shareholder hereby constitutes and appoints Gary
Saunders and Luke Baer, and each of them, with full power of substitution,
his true and lawful proxy and attorney-in-fact to vote the Shares as
specified in Section 4 hereof. This proxy shall be deemed coupled with an
interest, and is irrevocable.
6. Legend. Each Shareholder shall surrender to the Company all
certificates representing the shares of Company Common Stock owned by him,
and instruct the Company to place the following legend on such
certificates: "The shares of common stock represented by this certificate
are subject to a Voting and Option Agreement, dated as of December 10,
2000, by and among Robert Bosch GmbH, Karl H. Kostusiak and David B.
Lederer."
7. Specific Enforcement. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement and
that the obligations of the parties hereto shall be specifically
enforceable, in addition to any other remedy which may be available at law
or in equity.
8. Commissions. Each Shareholder and Bosch, in connection with
the transactions contemplated hereby, severally agree to indemnify and hold
the other harmless from and against any and all claims, liabilities or
obligations with respect to any brokerage fees, commissions or finders'
fees asserted by any person on the basis of any act or statement alleged to
have been made by such party or its Affiliate.
9. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses.
10. Amendment. 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.
11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when delivered by hand or (c)
the expiration of five business days after the day when mailed by certified
or registered mail, postage prepaid, addressed at the following addresses
(or at such other address for a party as shall be specified by like
notice): If to Bosch, to:
Robert Bosch GmbH
Robert Bosch Platz 1
70049 Stuttgart
Germany
Attention: Dr. Heiko Carrie
Telephone No.: 0049 711 811 6864
Telecopy No.: 0049 711 811 6760
with a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Telephone No.: (212) 626-4524
Telecopy No.: (212) 626-4120
Attention: Brian McGunigle
If to Kostusiak, to:
Karl H. Kostusiak
4016 East Avenue
Rochester, New York 14618
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
Four Times Square
New York, New York 10036
Telephone No.: (212) 735-2760
Telecopy No.: (917) 777-2760
Attention: Stephen M. Banker
If to Lederer, to:
David B. Lederer
8656 Grieg Street
Sodus Point, New York 14555
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
Four Times Square
New York, New York 10036
Telephone No. (212) 735-2760
Telecopy No.: (212) 735-2760
Attention: Stephen M. Banker
12. Entire Agreement. This Agreement (including the documents
and instruments referred to herein) constitutes the entire agreement 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.
13. Successors and Assigns. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent
of the other parties hereto, except that Bosch may assign this agreement to
Purchaser, provided Bosch remains liable for Purchaser's performance
hereof. This Agreement will be binding upon, inure to the benefit of and be
enforceable by each party and such party's respective heirs, beneficiaries,
executors, representatives and permitted assigns.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
15. Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of New York (without giving effect to the provisions thereof relating
to conflicts of law).
16. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
17. Termination. This Agreement shall terminate upon the
earliest of (i) expiration of the Option Period, (ii) the purchase of the
Shares pursuant to the Option, (iii) the agreement of the parties hereto to
terminate this Agreement and (iv) consummation of the Merger.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each Shareholder and a duly authorized officer of Bosch on the
day and year first written above.
Robert Bosch GmbH
By: /s/ Georg Hanen
-------------------------
Name: Dr. Georg Hanen
Title: Senior Vice President
By: /s/ Heiko Carrie
-------------------------
Name: Dr. Heiko Carrie
Title: Director
/s/ Karl H. Kostusiak
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Karl H. Kostusiak
/s/ David B. Lederer
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David B. Lederer
