EXHIBIT 99.3
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT dated as of November 13, 2000 (this
"Agreement"), by and among Minnesota Mining and Manufacturing Company ("Parent")
a Delaware corporation, Equinox Acquisition, Inc. a Massachusetts corporation
and a wholly owned Subsidiary of Parent ("Purchaser"), and each of the parties
identified on Schedule A hereto (each, a "Shareholder" and, collectively, the
"Shareholders"), as individual shareholders of MicroTouch Systems, Inc., a
Massachusetts corporation (the "Company").
W I T N E S S E T H:
WHEREAS, concurrently with the execution of this Agreement,
Parent and Purchaser are entering into an Agreement and Plan of Merger dated as
of the date hereof (the "Merger Agreement"; capitalized terms used and not
otherwise defined herein shall have the respective meanings assigned to them in
the Merger Agreement), with the Company, pursuant to which (i) Purchaser will
commence the Offer and, (ii) following consummation of the Offer, Purchaser
shall merge with and into the Company;
WHEREAS, each Shareholder is the record or beneficial owner of
the number of shares of common stock, $0.01 par value per share, of the Company
(the "Common Stock") and options to purchase Common Stock set forth opposite
their respective names on Schedule A hereto (the shares of Common Stock set
forth on Schedule A, together with any shares of Common Stock hereafter acquired
by the Shareholders, whether pursuant to the exercise of options or otherwise,
are referred to herein collectively as the "Shares");
WHEREAS, as a condition to entering into the Merger Agreement
and incurring the obligations set forth therein, including the Offer, Parent and
Purchaser have required that the Shareholders enter into this Agreement; and
WHEREAS, the Shareholders believe that it is in the best
interests of the Company and its shareholders to induce Parent and Purchaser to
enter into the Merger Agreement and, therefore, the Shareholders are willing to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
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ARTICLE I
TENDER OF SHARES; OPTIONS
Section 1.01 Tender of Shares. Subject to dispositions permitted under
Section 5.01, each Shareholder, severally but not jointly, agrees that, as soon
as practicable following commencement of the Offer, such Shareholder shall
tender or cause to be tendered all of his respective Shares pursuant to and in
accordance with the terms of the Offer, and shall not withdraw such Shares from
the Offer unless (i) the Offer is terminated or (ii) the Merger Agreement is
terminated. Each Shareholder, severally but not jointly, acknowledges and agrees
that Purchaser's obligation to accept for payment the Shares in the Offer,
including any Shares tendered by such Shareholder, is subject to the terms and
conditions of the Offer.
Section 1.02 Options. Each Shareholder, severally but not jointly,
agrees to the cancellation of each outstanding option to purchase shares of
Common Stock of the Company that is held by such Shareholder at the time of
acceptance for payment of any shares of Common Stock by Merger Sub in the Offer,
in exchange for the consideration described in Section 2.1(e) of the Merger
Agreement.
ARTICLE II
VOTING AGREEMENT
Section 2.01 Voting Agreement. Each Shareholder, severally but not
jointly, hereby agrees that, from and after the date hereof and until the
termination of the Merger Agreement, at any meeting of the shareholders of the
Company, however called, and in any action by consent of the shareholders of the
Company, such Shareholder shall vote (or cause to be voted) such Shareholder's
Shares (i) in favor of the approval and adoption of the Merger Agreement, the
Merger and all the transactions contemplated by the Merger Agreement and this
Agreement and otherwise in such manner as may be necessary to consummate the
Merger; (ii) except as otherwise agreed to in writing by Parent, against any
action, proposal, agreement or transaction that would result in a material
breach of any covenant, obligation, agreement, representation or warranty of the
Company under the Merger Agreement (whether or not theretofore terminated) or of
the Shareholder contained in this Agreement; and (iii) against any action,
agreement or transaction that would materially delay or impair the ability of
the Company to consummate the transactions provided for in the Merger Agreement
or any Acquisition Proposal.
Section 2.02 Irrevocable Proxy. Each Shareholder hereby irrevocably
appoints Parent and each of its officers as such Shareholder's attorney, agent
and proxy, with full power of substitution, to vote and otherwise act (by
written consent or otherwise) with
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respect to such Shareholder's Shares at any meeting of shareholders of the
Company (whether annual or special and whether or not an adjourned or postponed
meeting) or by written consent in lieu of any such meeting or otherwise, on the
matters and in the manner specified in Section 2.01. THIS PROXY AND POWER OF
ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST AND, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, SHALL BE VALID AND BINDING ON ANY PERSON TO WHOM
A SHAREHOLDER MAY TRANSFER ANY OF HIS OR HER SHARES IN BREACH OF THIS AGREEMENT.
Each Shareholder hereby revokes all other proxies and powers of attorney with
respect to such Shareholder's Shares that may have heretofore been appointed or
granted (the "Irrevocable Proxy"), and no subsequent proxy or power of attorney
shall be given or written consent executed (and if given or executed, shall not
be effective) by any Shareholder with respect thereto. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of any
Shareholder and the termination of the Irrevocable Proxy and any obligation of
the Shareholder under this Agreement shall be binding upon the heirs, personal
representatives, successors and assigns of such Shareholder.
Section 2.03 Conflicts. In the case of any Shareholder who is an
officer or director of the Company, no provision of this Agreement, including
Section 5.02 hereof, shall prevent or interfere with such Shareholder's
performance of his or her obligations, if any, solely in his or her capacity as
an officer or director of the Company, including, without limitation, in the
case of a director of the Company, the fulfillment of his or her fiduciary
duties, and in no event shall such performance constitute a breach of this
Agreement. The execution and delivery of this Agreement by each Shareholder, and
the performance of any obligations (or breach thereof) hereunder, are being
undertaken, and shall be deemed to have been undertaken, by such persons solely
in their capacity as shareholders of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder, severally but not jointly, hereby represents and
warrants to Parent and Purchaser as follows:
Section 3.01 Legal Capacity. Such Shareholder has all legal capacity to
enter into this Agreement, to carry out his or her obligations hereunder and to
consummate the transactions contemplated hereby.
Section 3.02 Authority Relative to this Agreement. Such Shareholder has
all necessary right, power and authority to execute and deliver this Agreement,
to perform such Shareholder's obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered
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by such Shareholder and constitutes a legal, valid and binding obligation of
such Shareholder, enforceable against such Shareholder in accordance with its
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 3.03 No Conflict. The execution and delivery of this Agreement
by such Shareholder do not, and the performance of this Agreement by such
Shareholder shall not, (i) to the knowledge of such Shareholder, conflict with
or violate any Law applicable to such Shareholder (in his or her capacity as a
Shareholder) or by which the Shares owned by such Shareholder are bound or
affected or (ii) result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the Shares owned by
such Shareholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which such Shareholder is a party or by which such Shareholder or the Shares
owned by such Shareholder are bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences that would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
or otherwise prevent or materially delay such Shareholder from performing its
material obligations under this Agreement.
Section 3.04 Title to the Shares. As of the date hereof, such
Shareholder is the record or beneficial owner of, and has good and unencumbered
title (except as set forth in Schedule A) to, the number of Shares set forth
beneath such Shareholder's name on Schedule A hereto. Such Shares are all the
securities of the Company owned, either of record or beneficially, by such
Shareholder and such Shareholder does not have any option or other right to
acquire any other securities of the Company. The Shares owned by such
Shareholder are owned free and clear of all Liens, other than any Liens created
by this Agreement. Except as provided in this Agreement, such Shareholder has
not appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares owned by such Shareholder.
Section 3.05 Intermediary Fees. No investment banker, broker, finder or
other intermediary is, or shall be, entitled to a fee or commission from Parent,
Purchaser or the Company in respect of this Agreement based on any arrangement
or agreement made by or on behalf of such Shareholder.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and
warrant to each Shareholder as follows:
Section 4.01 Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not prevent or materially
delay consummation of the transactions contemplated by this Agreement or
otherwise prevent or materially delay Parent or Purchaser from performing their
respective obligations under this Agreement.
Section 4.02 Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by Parent and Purchaser and the performance by Parent
and Purchaser of their obligations hereunder have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Parent or Purchaser is necessary to authorize this Agreement.
This Agreement has been duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Shareholders, constitutes a legal, valid and binding obligation of each of
Parent and Purchaser enforceable against each of Parent and Purchaser in
accordance with its terms.
Section 4.03 No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser shall not, (i) conflict
with or violate the certificate of incorporation or by-laws or equivalent
organizational documents of Parent or Purchaser, (ii) conflict with or violate
any Law applicable to Parent or Purchaser and (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
cancellation, vesting or acceleration of any obligation under, or require the
consent of any other party to, any agreement, contract, instrument, bond, note,
indenture, permit, license or franchise to which Parent or any of its
Subsidiaries is a party or by which Parent, any of its Subsidiaries or any of
their respective property is bound or affected, except any such conflicts or
violations that would not prevent or materially delay consummation of the
transactions contemplated by this Agreement or otherwise prevent or materially
delay Parent or Purchaser from performing its obligations under this Agreement.
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(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
shall not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Entity, except (i) for applicable
requirements, if any, of the Exchange Act and the HSR Act, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay
consummation of the transactions contemplated by this Agreement or otherwise
prevent Parent or Purchaser from performing their material obligations under
this Agreement.
ARTICLE V
COVENANTS OF THE SHAREHOLDERS
Section 5.01 No Disposition or Encumbrance of Shares. Each Shareholder,
severally but not jointly, hereby agrees that, except as contemplated by this
Agreement, such Shareholder shall not (i) sell, transfer, tender, pledge,
assign, contribute to the capital of any entity, hypothecate, give or otherwise
dispose of, grant a proxy or power of attorney with respect to, deposit into any
voting trust, enter into any voting agreement, or create or permit to exist any
Liens of any nature whatsoever with respect to, any of such Shareholder's Shares
(or agree or consent to, or offer to do, any of the foregoing) other than the
making of bona fide gifts of Shares to persons who agree in writing to assume
such Shareholder's obligations under, and to be bound by, this Agreement, in an
aggregate amount of not more than 20,000 Shares per Shareholder (provided that
bona fide charitable organizations under the Code need not agree to be so
bound), (ii) other than as contemplated by this Agreement, take any action that
would make any representation or warranty of such Shareholder herein untrue or
incorrect in any material respect or have the effect of preventing or disabling
such Shareholder from performing such Shareholder's material obligations
hereunder or (iii) directly or indirectly, initiate, solicit or encourage any
person to take actions that could reasonably be expected to lead to the
occurrence of any of the foregoing. The parties hereto agree that the conversion
of Shares by operation of law pursuant to the Merger shall not be prohibited by
this Section 5.01.
Section 5.02 No Solicitation Of Transactions. Subject to Section 2.03
hereof, each Shareholder, severally and not jointly, agrees that between the
date of this Agreement and the date of termination of the Merger Agreement, such
Shareholder shall not, directly or indirectly, solicit, initiate, facilitate,
including by furnishing any information to any person, or encourage the
submission of any Acquisition Proposal or any proposal that may reasonably be
expected to lead to, an Acquisition Proposal.
Section 5.03 Further Action; Reasonable Best Efforts. Upon the terms
and subject
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to the conditions hereof, Parent, Purchaser and each Shareholder shall use their
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary under applicable laws and
regulations to consummate and make effective this Agreement.
Section 5.04 Disclosure. Each Shareholder agrees to permit Parent and
Purchaser to publish and disclose in the Offer Documents and the Proxy Statement
and related filings under the securities laws such Shareholder's identity and
ownership of Shares and the nature of his or her commitments, arrangements and
understandings under this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Termination. Each Shareholder's obligation hereunder to
tender, and not withdraw, their Shares pursuant to the Offer shall terminate on
the earlier of (i) the expiration date of the Offer and (ii) the termination of
the Merger Agreement. The remaining provisions of this Agreement shall
terminate, and no party shall have any rights or obligations hereunder and this
Agreement shall become null and void and have no further effect upon the earlier
of (x) the Effective Time and (y) the termination of the Merger Agreement.
Nothing in this Section 6.01 shall relieve any party of liability for any
willful breach of this Agreement. Parent and Purchaser acknowledge that, in the
event of termination of this Agreement, Shareholders shall no longer have any
obligation hereunder.
Section 6.02 Adjustments. (a) In the event of (i) any increase or
decrease or other change in the Shares by reason of stock dividend, stock split,
recapitalization, combination, exchange of shares or the like or (ii) a
Shareholder becomes the beneficial owner of any additional Shares or other
securities of the Company, then the terms of this Agreement, including the term
"Shares" as defined herein, shall apply to the shares of capital stock and other
securities of the Company held by such Shareholder immediately following the
effectiveness of the events described in clause (i) or such Shareholder becoming
the beneficial owner thereof pursuant to clause (ii).
(b) Each Shareholder hereby agrees, while this Agreement is in
effect, to promptly notify Parent and Purchaser of the number of any new Shares
acquired by such Shareholder, if any, after the date hereof.
Section 6.03 Amendment. This Agreement may not be amended except by an
instrument in writing signed by all the parties hereto.
Section 6.04 Waiver. Any party to this Agreement may (i) extend the
time for the
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performance of any obligation or other act of any other party hereto, (ii) waive
any inaccuracy in the representations and warranties of another party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any agreement of another party contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
Section 6.05 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy,
or by registered or certified mail (postage prepaid, return receipt requested)
to the Parent or Purchaser specified below, or specified (in the case of each
Shareholder) adjacent to each Shareholder's name in Schedule A:
if to Parent or Purchaser:
Minnesota Mining and Manufacturing Company
Office of the General Counsel
Building 220-14W-07
St. Paul, MN 55144
Attention: General Counsel
Telecopy No.: (651) 736-9469
with a copy to:
Minnesota Mining and Manufacturing Company
Office of the General Counsel
Building 220-11E-02
St. Paul, MN 55144
Attention: Gregg Larson, Esq.
Telecopy No.: (651) 736-9469
with a further copy to:
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
Attention: John T. Kramer, Esq.
Telecopy No.: (612) 340-8738
Section 6.06 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 conditions and provisions of this Agreement shall
nevertheless remain in full force
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and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is 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 hereto 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 be consummated as
originally contemplated to the fullest extent possible.
Section 6.07 Further Assurances. Each Shareholder, Parent and Purchaser
shall execute and deliver all such further documents and instruments and take
all such further action as may be reasonably necessary in order to consummate
the transactions contemplated hereby.
Section 6.08 Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent;
provided that no such assignment shall relieve Parent or Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
Section 6.09 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
Section 6.10 Specific Performance. The parties hereto agree that
irreparable damage may occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 6.11 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts.
Section 6.12 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any actions or proceedings directly or
indirectly arising out of, under or in connection with this Agreement.
Section 6.13 Expenses. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, or, in the case of legal expenses of the
Shareholders, by the Company (it being understood that the Shareholders have not
retained their own counsel but have utilized
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the services of the Company's outside counsel).
Section 6.14 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 6.15 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY IS LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
/s/ D. Westervelt Davis
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Name: Westervelt Davis
/s/ Edward J. Stewart
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Name: Edward J. Stewart
/s/ Peter E. Brumme
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Name: Peter E. Brumme
/s/ Frank Manning
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Name: Frank Manning
/s/ James D. Logan
--------------------------------------------------
Name: James D. Logan
/s/ Geoffrey P. Clear
--------------------------------------------------
Name: Geoffrey P. Clear
/s/ James W. Ellis
--------------------------------------------------
Name: James W. Ellis
/s/ Robert D. Becker
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Name: Robert D. Becker
MINNESOTA MINING AND
MANUFACTURING COMPANY
By /s/ Ronald A. Weber
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Name: Ronald A. Weber
Title: Executive Vice President
EQUINOX ACQUISITION INC.
By /s/ Ronald A. Weber
--------------------------------------------------
Name: Ronald A. Weber
Title: President
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SCHEDULE A
NAME AND ADDRESS COMMON STOCK STOCK OPTIONS
---------------- ------------ -------------
D. Westervelt Davis 12,000 367,500
James D. Logan 120,598 50,000
Edward J. Stewart III 22,000 30,000
Frank Manning 45,000
Peter E. Brumme 25,000
Geoffrey P. Clear 5,222 133,500
Robert D. Becker 72,000
James W. Ellis 37,000
(*) The address for each Shareholder is c/o MicroTouch Systems, Inc., 300
Griffin Brook Park Drive, Methuen, Massachusetts 01844
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