<PAGE> 1
As filed with the Securities and Exchange Commission on December 20, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
IMTEC INC.
(Name of Issuer)
Common Stock, Par Value $.01 per Share
(Title of Class of Securities)
452909-10-4
(CUSIP Number)
Thomas E. Scherer
Vice President, Controller and Assistant Secretary
Brady Corporation
6555 West Good Hope Road
Milwaukee, WI 53223
(414) 358-6600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
Conrad G. Goodkind, Esq.
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 277-5000
December 9, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rules 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
CUSIP NO. 452909-10-4 13D PAGE 1 OF 6 PAGES
--------------------- -- --
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Brady Corporation
39-0178960
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wisconsin
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-** (984,703 assuming full exercise of the options to
purchase shares of common stock described below.)**
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-** (984,703 assuming full exercise of the options to
purchase shares of common stock described below.)**
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-** (984,703 assuming full exercise of the options to purchase shares of
common stock described below.)**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%** (58.0% of the shares of common stock as computed in accordance with
Rule 13d-3(d)(1)(i) under the Act assuming full exercise of the options to
purchase shares of common stock described below.)**
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
<PAGE> 3
** On December 9, 1999, Brady Corporation, a Wisconsin corporation
("Brady"), entered into a Shareholder Option Agreement ("Shareholder
Option Agreement #1") with certain shareholders of Imtec Inc., a
Delaware corporation ("Imtec"), including all of the directors of
Imtec and all but one holder of greater than five percent (5%) of
Imtec's common stock (the "Group Shareholders"), who, in the
aggregate, own 875,326 shares of Imtec common stock, including certain
options to purchase shares of Imtec common stock (the "Group
Shares"). In addition, on December 9, 1999, Brady entered into a
second Shareholder Option Agreement ("Shareholder Option Agreement #2"
and together with Shareholder Option Agreement #1, the "Shareholder
Option Agreements"), with the remaining holder of greater than 5% of
Imtec common stock (the "Individual Shareholder" and together with the
Group Shareholders, the "Shareholders") with respect to 109,377 shares
of Imtec common stock (the "Individual Shares" and together with the
Group Shares, the "Shares"), which constitute a portion of the shares
of Imtec common stock owned by such holder. Pursuant to the
Shareholder Option Agreements, the Shareholders have (i) granted
Brady an option to purchase their Shares at an exercise price of
$12.00 per Share (subject to adjustment in certain circumstances)
exercisable upon the occurrence of certain events specified in the
Shareholder Option Agreements and (ii) irrevocably granted to, and
appointed Brady proxy and attorney-in-fact to vote the Shares with
respect to certain matters.
<PAGE> 4
ITEM 1. SECURITY AND ISSUER.
The name of the issuer is Imtec Inc., a Delaware corporation ("Imtec"
or the "Company"). The address of the principal executive offices of the Company
is One Imtec Lane, Bellows Falls, Vermont 05101. The title of the class of
equity securities to which this Statement relates is common stock, par value
$.01 per share, of the Company (the "Common Stock").
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f). This Schedule 13D is filed on behalf of Brady
Corporation, a Wisconsin corporation ("Brady"). The principal executive office
and the address of the principal business of Brady is located at 6555 West Good
Hope Road, Milwaukee, Wisconsin 53223. Brady's principal business is the
manufacturing and marketing of high-performance identification solutions and
speciality coated materials. Major product categories include: industrial
identification and data collection products; safety and facility identification
products; and OEM components.
Pursuant to General Instruction C of Schedule 13D, the names, business
addresses, principal occupations, the names, principal businesses and addresses
of any corporations or other organizations in which such employment is conducted
and citizenship of the executive officers and directors of Brady are set forth
in Annex A hereto and are incorporated herein by reference.
(d) and (e). During the last five years, Brady and, to the knowledge of
Brady, Brady's executive officers and directors have not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 9, 1999, Brady entered into a Shareholder Option Agreement
("Shareholder Option Agreement #1") with certain shareholders of Imtec,
including all of the directors of Imtec and all but one holder of greater than
five percent (5%) of the shares of Common Stock (the "Group Shareholders"), who,
in the aggregate, own 875,326 shares of Common Stock, including certain options
to purchase shares of Common Stock (the "Group Shares"). In addition, on
December 9, 1999, Brady entered into a second Shareholder Option Agreement
("Shareholder Option Agreement #2" and together with Shareholder Option
Agreement #1, the "Shareholder Option Agreements"), with the remaining holder of
greater than 5% of the shares of Common Stock (the "Individual Shareholder" and
together with the Group Shareholders, the "Shareholders") with respect to
109,377 shares of Common Stock (the "Individual Shares" and together with the
Group Shares, the "Shares"), which constitute a portion of the shares of Common
Stock owned by the Individual Shareholder. Pursuant to the Shareholder Option
Agreements, each Shareholder has (i) granted Brady an irrevocable option
(individually an "Option" and together the "Options") to purchase such
Shareholder's Shares at an exercise price of $12.00 per Share (subject to
adjustment in certain circumstances) exercisable upon the occurrence of certain
events specified in the Shareholder Option Agreements and (ii) irrevocably
granted to, and appointed Brady proxy and attorney-in-fact to vote such
Shareholder's Shares with respect to certain matters.
Should Brady exercise all of the Options, it would beneficially own
984,703 shares of Common Stock, which represents 58.0% of the Common Stock
computed in accordance with Rule 13d-3(d)(1)(i) under the Act. If Brady
exercises all or any of its Options, it will use existing working capital to
fund the exercise price of the Options. The total amount of funds required to
exercise all of the Options will be approximately $11.8 million.
-3-
<PAGE> 5
ITEM 4. PURPOSE OF TRANSACTION.
The Shareholder Option Agreements were entered into for the purpose of
inducing Brady to enter into negotiations for the acquisition of Imtec on terms
and subject to the conditions to be set forth in a definitive Agreement and Plan
of Merger to be negotiated and entered into between Brady and Imtec (the "Merger
Agreement") which would provide, among other things, for the merger of a
subsidiary of Brady or an affiliate of Brady with and into Imtec (the "Merger").
Pursuant to the Shareholder Option Agreements, each Shareholder has granted
Brady an irrevocable Option to purchase the Shares (including any subsequently
acquired shares of Common Sock with respect to the Group Shareholders), which in
the aggregate constitutes approximately 58.0% of the shares of Common Stock
computed in accordance with Rule 13d-3(d)(1)(i) under the Act at $12.00 per
Share. The Options are exercisable at any time, in whole or in part, after (i)
February 7, 2000 if the Merger Agreement has not been signed; (ii) the
occurrence of any event as a result of which Brady is entitled to receive a
termination fee under the Merger Agreement; or (iii) such time as a Shareholder
shall have breached the Merger Agreement. Each Option that becomes exercisable
shall remain exercisable until the later of (i) the date that is 120 days after
the date such Option becomes exercisable or (ii) the date that is 60 days after
the date that all waiting periods under the Hart-Scott-Rodino Anti-Trust
Improvements Act applicable to the Merger and/or purchase of the Shares shall
have expired or been terminated; provided that if at the expiration of such
period there shall be in effect any injunction or other order issued by any
federal, state, local or foreign governmental unit or agency prohibiting the
exercise of such Option, the exercise period shall be extended until 60 days
after the date that no such injunction or order is in effect.
Each Shareholder has agreed that at any meeting of the shareholders of
Imtec or in connection with any written consent of the shareholders of Imtec,
such Shareholder will vote (or cause to be voted) all Shares (including any
subsequently acquired shares of Common Stock with respect to each Group
Shareholder), (i) in favor of the Merger Agreement, the Merger and any other
actions contemplated by the Merger Agreement and the applicable Shareholder
Option Agreement and (ii) against any proposal relating to an acquisition
proposal by any person or entity other than Brady (an "Acquisition Proposal")
and against any action or agreement that would impede, frustrate, prevent or
nullify the Shareholder Option Agreements, or result in a breach in any respect
of any covenant, representation or warranty or any other obligation or agreement
of Imtec under the Merger Agreement or which would result in any of the
conditions set forth in the Merger Agreement not being fulfilled. Each
Shareholder irrevocably granted to and appointed Brady as such Shareholder's
proxy and attorney-in-fact to vote the Shares owned by such Shareholder, or
grant a consent or approval in respect of such Shares (including any
subsequently acquired shares of Common Sock with respect to the Group
Shareholders), in the manner specified above.
Each Shareholder has agreed that, except as provided by the Merger
Agreement and the applicable Shareholder Option Agreement, such Shareholder will
not (i) offer to transfer, transfer or consent to any transfer, (ii) enter into
any contract, option or other agreement or understanding with respect to any
transfer, (iii) grant any proxy, power-of-attorney or other authorization or
consent or (iv) deposit into a voting trust or enter into a voting agreement or
arrangement, each with respect to all of the Shares (including any subsequently
acquired shares of Common Sock with respect to the Group Shareholders)
beneficially owned by such Shareholder.
Each Shareholder has agreed that such Shareholder shall not encourage,
solicit initiate or participate in any way in any discussion or negotiation
with, or provide information or otherwise take any action to assist or
facilitate, any person concerning any Acquisition Proposal. Each Shareholder has
agreed to cease any such existing activities and to immediately communicate to
Brady the terms of any Acquisition Proposal.
Each Shareholder has waived any rights of appraisal or rights to
dissent from the Merger.
The Shareholder Option Agreements with respect to each Shareholder
shall terminate upon the earliest of (i) the effective time of the Merger
Agreement, (ii) December 9, 2000 or (iii) the termination of the Merger
Agreement, unless, in the case of clause (iii), Brady is or may be entitled to
receive a termination fee under the
-4-
<PAGE> 6
Merger Agreement following such termination or prior to such termination
such Shareholder has breached certain specified agreements contained in the
applicable Shareholder Option Agreement.
The description of the Shareholder Option Agreements set forth herein
does not purport to be complete and is qualified in its entirety by the
provisions of Shareholder Option Agreement #1 and Shareholder Option Agreement
#2, copies of which are attached hereto as Exhibits 1 and 2 respectively, and
incorporated herein by reference.
If a merger of Imtec with a subsidiary or an affiliate of Brady were
effected, Brady would intend to replace Imtec's existing board of directors and
certain of its officers. As a wholly owned subsidiary of Brady, Imtec would not
be eligible for quotation in NASDAQ and would be eligible for termination of
registration pursuant to section 12(g)(4) of the Act. Brady would also seek to
achieve efficiencies through the consolidation or elimination of duplicative
functions and/or operations.
Except pursuant to the terms of the Shareholder Option Agreements and
as set forth herein, Brady has no plans or proposals which would result in the
acquisition or disposition of shares of Common Stock or any other action
enumerated in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b). Pursuant to the Shareholder Option Agreements, Brady has the right
(as described above) to acquire 984,703 shares (subject to adjustment for
changes in capitalization) of Common Stock, representing 58.0% of the
outstanding Common Stock on December 9, 1999, as computed in accordance with
Rule 13d-3(d)(1)(i) under the Act. Should Brady fully exercise its Options and
purchase the Shares, the Shares will be acquired by Brady with sole voting and
dispositive power. Prior to entering into the Shareholder Option Agreements,
neither Brady nor, to the best of its knowledge, any of its executive officers
or directors beneficially owned any shares of Common Stock.
(c). Except for the execution and delivery of the Shareholder Option Agreements,
there have been no transactions by Brady or, to the best of its knowledge, any
of its executive officers or directors with respect to shares of the Common
Stock during the 60 days preceding the date of this Schedule 13D.
(d). Each Shareholder has the power to receive and the power to direct the
receipt of dividends from their Shares until such time as Brady shall exercise
its Option for such Shareholder's Shares. Each Shareholder has the right to
receive and the power to direct the receipt of the proceeds payable by Brady
upon Brady's exercise of its Option for such Shareholder's Shares. Shareholder
Option Agreement #1 and Shareholder Option Agreement #2, copies of which are
attached hereto as Exhibits 1 and 2 respectively, and incorporated herein by
reference, identify each of the Shareholders.
(e). Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
See Item 4 which is incorporated herein by reference. Other than the
Shareholder Option Agreements, which are attached to this Schedule 13D as
Exhibit 1 and 2 respectively, and agreements referred to or contained therein,
there are no contracts, arrangements, understandings or relationships between
Brady and any other person, or, to the knowledge of Brady, among any of Brady's
executive officers and directors or between any of Brady's executive officers
and directors and any other person, with respect to any securities of Imtec.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
See Exhibit Index attached hereto.
-5-
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 16, 1999 BRADY CORPORATION
By: /s/ Frank Jaehnert
---------------------------
Name: Frank Jaehnert
Title: Vice President and
Chief Financial Officer
-6-
<PAGE> 8
ANNEX A
INFORMATION RELATING TO
EXECUTIVE OFFICERS AND DIRECTORS
OF BRADY CORPORATION
The following table sets forth the name and present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted of each
member of the Board of Directors and each executive officer of Brady
Corporation. The business address of each such person is Brady Corporation, 6555
West Good Hope Road, Milwaukee, Wisconsin 53223. Each person listed is a citizen
of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION AND
NAME PRINCIPAL ADDRESS OF EMPLOYER PRINCIPAL BUSINESS OF EMPLOYER
---- ----------------------------- ------------------------------
DIRECTORS
- ---------
<S> <C> <C>
Katherine M. Hudson Brady Corporation President and Chief Executive Officer of Brady
6555 West Good Hope Road Corporation
Milwaukee, WI 53223
Peter J. Lettenberger Quarles & Brady LLP Partner of Quarles & Brady LLP, general counsel
411 East Wisconsin Ave. to Brady Corporation
Milwaukee, WI 53202
Robert C. Buchanan Fox Valley Corporation President and Chairman of Fox Valley
100 W. Lawrence St. Corporation, a paper production company
Appleton, Wisconsin 54911
Roger D. Peirce The Jor-Mac Company, Inc. Private investor and consultant and Secretary and
704 10th Avenue Treasurer of The Jor-Mac Company, Inc., a
Grafton, Wisconsin 53024 manufacturer of metal goods
Richard A. Bemis Bemis Manufacturing Company President and Chief Executive Officer of Bemis
300 Mill Street Manufacturing Company, a manufacturer of
Sheboygan Falls, Wisconsin 53085 molded plastic products
Frank W. Harris Institute for Polymer Science Distinguished Professor of Polymer Science and
University of Akron Biomedical Engineering in the Institute of
244 Summer Street Polymer Science at the University of Akron
Polymer Building 603
Akron, Ohio 44325
Gary E. Nei B&B Publishing Chairman of B&B Publishing, a publishing
820 Wisconsin Street company
Walworth, Wisconsin 53184
Irwin Helford Viking Office Products Chairman of Viking Office Products and Vice
950 W. 190th Street Chairman of Office Depot Inc., both of which are
Torrance, California 90502 sellers of office products
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
A-1-
<PAGE> 9
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
- ------------------
<S> <C> <C>
Katherine M. Hudson Brady Corporation President and Chief Executive Officer
6555 West Good Hope Road
Milwaukee, WI 53223
- --------------------------------------------------------------------------------------------------------------------
Richard L. Fisk Brady Corporation Vice President, Direct Marketing Group
6555 West Good Hope Road
Milwaukee, WI 53223
- --------------------------------------------------------------------------------------------------------------------
David R. Hawke Brady Corporation Vice President, Graphics Group
6555 West Good Hope Road
Milwaukee, WI 53223
- --------------------------------------------------------------------------------------------------------------------
Frank M. Jaehnert Brady Corporation Vice President and Chief Financial Officer
6555 West Good Hope Road
Milwaukee, WI 53223
- --------------------------------------------------------------------------------------------------------------------
David W. Schroeder Brady Corporation Vice President, Identification Solution Group
6555 West Good Hope Road
Milwaukee, WI 53223
- --------------------------------------------------------------------------------------------------------------------
Conrad G. Goodkind Quarles & Brady LLP Secretary and Partner of Quarles & Brady LLP,
411 East Wisconsin Ave. general counsel to Brady Corporation
Milwaukee, WI 53202
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
A-2-
<PAGE> 10
BRADY CORPORATION
SCHEDULE 13D
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT NAME
- ----------- ------------
1 Shareholder Option Agreement dated as of December 9, 1999,
among Brady Corporation and the persons listed on Schedule
I ("Shareholder Option Agreement #1").
.
2 Shareholder Option Agreement dated as of December 9, 1999,
among Brady Corporation and Laifer Capital Management,
Inc. ("Shareholder Option Agreement #2").
EI-1-
<PAGE> 1
EXHIBIT 1
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of December 9, 1999
(the "Agreement"), among Brady Corporation ("Parent"), a Wisconsin corporation,
and the persons listed on Schedule I hereto (each a "Shareholder" and,
collectively, the "Shareholders").
R E C I T A L S:
WHEREAS, Parent has indicated its willingness to enter into an
agreement for the acquisition of Imtec, Inc., a Delaware corporation ("Company")
through an Agreement and Plan of Merger (the "Merger Agreement") which would
provide, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Parent or a subsidiary (in either
event, the "Purchaser") for all outstanding shares of Common Stock, par value
$0.01 per share, of the Company (the "Common Stock") and for the subsequent
merger of Purchaser with the Company (the "Merger"), all on the terms and
subject to the conditions to be set forth in the Merger Agreement;
WHEREAS, as an inducement and a condition to entering into
negotiation of the Merger Agreement, Purchaser has required that the
Shareholders agree, and each Shareholder has agreed, to enter into this
Agreement; and
WHEREAS, the Board of Directors of the Company has approved
this Agreement and the transactions contemplated hereby prior to the date
hereof;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. Definitions. Capitalized terms have the meanings
provided herein.
2. Tender of Shares; Agreement to Sell.
(a) In order to induce Parent to enter into negotiation of the
Merger Agreement, each Shareholder hereby agrees to validly tender (or cause the
record owner of such shares to validly tender), and not to withdraw, pursuant to
and in accordance with the terms of the Offer, not later than the tenth business
day after commencement of the Offer, the number of shares of Common Stock set
forth opposite such Shareholder's name on Schedule I hereto (the "Existing
Shares") and, together with any shares of Common Stock acquired by such
Shareholder in any capacity after the date hereof and prior to the termination
of this Agreement by means of purchase, dividend, distribution, exercise of
options, warrants or other rights to acquire Common
<PAGE> 2
Stock or in any other way (together, the "Shares"), all of which are
beneficially owned by Shareholder. If a Shareholder acquires beneficial
ownership of Shares after the date hereof, such Shareholder shall tender such
Shares on such tenth business day or, if later, on the second business day after
such acquisition. Each Shareholder hereby acknowledges and agrees that
Purchaser's obligation to accept for payment, purchase and pay for the Shares in
the Offer, including the Shares beneficially owned by the Shareholders, is
subject to the terms and conditions of the Offer. Purchaser, by written notice
delivered to a Shareholder, will have the right to direct such Shareholder not
to tender to, or to withdraw from, the Offer any Shares beneficially owned by
such Shareholder and, upon receipt of any such notice, such Shareholder shall
comply with the direction included in such notice.
(b) As promptly as practicable following the expiration of the
Offer (but in no event later than 10:00 a.m., Milwaukee time, on the first
trading day immediately after such expiration), each Shareholder hereby
severally and not jointly agrees to sell to Purchaser, and Purchaser agrees to
purchase, all Shares owned by such Shareholder not tendered or validly withdrawn
from the Offer pursuant to Section 2(a) at a price equal to $12.00 per Share or,
if less, the price provided in the Merger Agreement. The obligations of each
Shareholder and Purchaser in this Section 2(b) is conditioned upon Purchaser
purchasing shares of Common Stock pursuant to the Offer.
(c) Purchaser shall be entitled to deduct and withhold from
the consideration otherwise payable hereunder to a holder of Shares any stock
transfer taxes and such amounts as are required to be withheld under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
provision of state, local or foreign tax law, as specified in the Offer
Documents. To the extent that amounts are so withheld by Purchaser, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Purchaser.
(d) Each Shareholder hereby permits Purchaser to publish and
disclose in the Offer Documents and, if approval of the Company's shareholders
is required under applicable law, any proxy statement (including all documents
and schedules filed with the SEC), such Shareholder's identity and ownership of
the Shares and the nature of such Shareholder's commitments, arrangements and
understandings under this Agreement; provided that such Shareholder shall have
the right to review and comment on such disclosure a reasonable time before it
is publicly disclosed.
3. Option. (a) In order to induce Parent to enter into
negotiation of the Merger Agreement, each Shareholder hereby grants to Purchaser
an irrevocable option (each, an "Option") to purchase the Shares beneficially
owned by such Shareholder (the "Option Shares") at a price equal to $12.00 per
Share, subject to
2
<PAGE> 3
adjustment in the event of a stock-split, stock dividend or additional share
issuance by the Company. Each Option granted by a Shareholder may be exercised
in whole or in part at any time after (i) sixty days from the date hereof if the
Merger Agreement has not been signed by the Company and Purchaser; (ii) the
occurrence of any event as a result of which Parent is entitled to receive a
termination fee under the Merger Agreement or (iii) such time as such
Shareholder shall have breached any of its agreements in the Merger Agreement.
(b) Each Option that becomes exercisable under Section 3(a)
shall remain exercisable until the later of (i) the date that is 120 days after
the date such Option becomes exercisable and (ii) the date that is 60 days after
the date that all waiting periods under the Hart-Scott-Rodino Anti-Trust
Improvements Act (the "HSR Act") required for the purchase of the Shares upon
such exercise shall have expired or been terminated; provided that if at the
expiration of such period there shall be in effect any injunction or other order
issued by any federal, state, local or foreign governmental unit or agency (a
"Governmental Entity") prohibiting the exercise of such Option, the exercise
period shall be extended until 60 days after the date that no such injunction or
order is in effect. In the event that Purchaser wishes to exercise an Option,
Purchaser shall send a written notice to the applicable Shareholder identifying
the place and date (not less than two nor more than ten business days from the
date of the notice) for the closing of such purchase.
4. Additional Agreements.
(a) Subject to Section 8 of this Agreement, each Shareholder
shall, at any meeting of the shareholders of the Company, however called, or in
connection with any written consent of the shareholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned by such
Shareholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof and (ii) against any
proposal relating to an acquisition proposal by any person or entity other than
Purchaser (an "Acquisition Proposal") and against any action or agreement that
would impede, frustrate, prevent or nullify this Agreement, or result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which would
result in any of the conditions set forth in the Merger Agreement not being
fulfilled.
(b) Each Shareholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, it shall not (i) offer
to transfer (which term shall include, without limitation, any sale, tender,
gift, pledge, assignment or other disposition), transfer or consent to any
transfer of, any or all of the Shares beneficially owned by such Shareholder or
any interest therein, (ii) enter into
3
<PAGE> 4
any contract, option or other agreement or understanding with respect to any
transfer of any or all of such Shares or any interest therein, (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
such Shares, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
(c) Each Shareholder hereby irrevocably grants to, and
appoints, Purchaser and any designee of Purchaser, and each of them
individually, such Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Shareholder, to vote
the Shares beneficially owned by such Shareholder, or grant a consent or
approval in respect of such Shares, in the manner specified in Section 4(a).
Each Shareholder represents that any proxies heretofore given in respect of
Shares beneficially owned by such Shareholder are not irrevocable and that any
such proxies are hereby revoked. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
Purchaser's agreement to undertake negotiation of the Merger Agreement and that
such irrevocable proxy is given to secure the performance of the duties of such
Shareholder under this Agreement. Each Shareholder hereby further affirms that
the irrevocable proxy is coupled with an interest and may under no circumstances
be revoked. Each Shareholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Without
limiting the generality of the foregoing, such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section 212 of
the Delaware Corporation Law.
(d) Each Shareholder hereby agrees that neither such
Shareholder nor any of its affiliates, representatives or agents shall (and, if
such Shareholder is a corporation, partnership, trust or other entity, such
Shareholder shall cause its officers, directors, partners, and employees,
representatives and agents, including its investment bankers, attorneys and
accountants, not to), directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. Each Shareholder will immediately cease any existing activities,
discussions or negotiations conducted heretofore with respect to any Acquisition
Proposal. Each Shareholder will immediately communicate to Purchaser the terms
of any Acquisition Proposal (or any discussion, negotiation or inquiry with
respect thereto) and the identity of the person making such Proposal or inquiry
which it may receive.
4
<PAGE> 5
(e) Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws to consummate and make
effective the transactions contemplated by this Agreement. Each party shall
promptly consult with the other and provide any necessary information and
material with respect to all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
(f) Each Shareholder hereby waives any rights of appraisal or
rights to dissent from the Merger that it may have.
5. Representations and Warranties of each Shareholder. Each
Shareholder hereby represents and warrants, severally and not jointly, to
Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
Existing Shares set forth opposite its name on Schedule I. Such Existing Shares
constitute all of the Shares owned of record or beneficially owned by such
Shareholder on the date hereof. Such Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in Sections 2,
3 and 4 hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Existing Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Such Shareholder has the power and authority to enter into
and perform all of such Shareholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Shareholder is a trustee, or any party to any other
agreement or arrangement, whose consent is required for the execution and
delivery of this Agreement or the consummation by such Shareholder of the
transactions contemplated hereby.
(c) Except for filings under the HSR Act and the Securities
Exchange Act of 1934 (the "Exchange Act") (i) no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery of this Agreement by such Shareholder, the
consummation by such Shareholder of the transactions contemplated hereby and the
compliance by such Shareholder with the provisions hereof and (ii) none of the
execution and delivery of this Agreement by such Shareholder, the consummation
by such Shareholder of the transactions contemplated
5
<PAGE> 6
hereby or compliance by such Shareholder with any of the provisions hereof,
except in cases in which any conflict, breach, default or violation described
below would not interfere with the ability of such Shareholder to perform such
Shareholder's obligations hereunder, shall (A) conflict with or result in any
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind, including, without limitation, any voting agreement,
proxy arrangement, pledge agreement, shareholders agreement or voting trust, to
which such Shareholder is a party or by which it or any of its properties or
assets may be bound or (C) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Shareholder or
any of its properties or assets.
(d) Except as permitted by this Agreement, the Existing Shares
beneficially owned by such Shareholder and the certificates representing such
shares are now, and at all times during the term hereof will be, held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by such Shareholder of the
Shares to Purchaser in the Offer or hereunder shall pass to and unconditionally
vest in Purchaser good and valid title to all Shares, free and clear of all
liens, proxies, voting trusts or agreements, understandings or arrangements or
any other rights whatsoever.
(e) No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Shareholder.
6. Stop Transfer. Each Shareholder shall request that the
Company not register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of the Shares beneficially owned by
such Shareholder, unless such transfer is made in compliance with this
Agreement.
7. Termination. This Agreement shall terminate with respect to
any Shareholder upon the earliest of (a) the effective time of the Merger
Agreement, (b) the first anniversary of the date hereof or (c) the termination
of the Merger Agreement (unless, in the case of this clause (c), Purchaser is or
may be entitled to receive a termination fee under the Merger Agreement
following such termination or prior to such termination such Shareholder has
breached Section 2(a), 4(a), 4(b) or 4(d)).
6
<PAGE> 7
8. No Limitation. Nothing in this Agreement shall be construed
to prohibit Shareholder, or any officer or affiliate of a Shareholder who is or
has designated a member of the Board of Directors of the Company, from taking
any action solely in his or her capacity as a member of the Board of Directors
of the Company or from exercising his or her fiduciary duties as a member of
such Board of Directors to the extent specifically permitted by the Delaware
General Corporation Law, as may be modified by the terms of the Merger
Agreement.
9. Miscellaneous. (a) This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of each Shareholder (in the case
of any assignment by Purchaser ) or Purchaser (in the case of an assignment by a
Shareholder), provided that Purchaser may assign its rights and obligations
hereunder to any direct or indirect subsidiary of Parent, but no such assignment
shall relieve Purchaser of its obligations hereunder.
(c) Without limiting any other rights Purchaser may have
hereunder in respect of any transfer of Shares, each Shareholder agrees that
this Agreement and the obligations hereunder shall attach to the Shares
beneficially owned by such Shareholder and shall be binding upon any person to
which legal or beneficial ownership of such Shares shall pass, whether by
operation of law or otherwise, including, without limitation, such Shareholder's
heirs, guardians, administrators or successors.
(d) This Agreement may not be amended, changed, supplemented
or otherwise modified with respect to a Shareholder except by an instrument in
writing signed on behalf of such Shareholder and Purchaser.
(e) 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 received if given) by hand delivery or by facsimile
transmission with confirmation of receipt, as follows:
If to a Shareholder:
At the addresses and facsimile numbers set forth on
Schedule I hereto.
7
<PAGE> 8
If to Parent or Purchaser:
Brady Corporation
6555 W. Good Hope Road
Milwaukee, Wisconsin 53223
Attention: Gary Johnson
Facsimile No.: (414) 438-6840
With a copy to:
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Conrad G. Goodkind
Facsimile No.: (414) 271-3552
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction such invalidity, illegality
or unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(h) The failure of any party hereto to exercise any rights,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
8
<PAGE> 9
(i) 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 confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
(k) The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (A) consents to submit itself to
the personal jurisdiction of any Delaware state court or any Federal court
located in Delaware in the event any dispute arises out of this Agreement or by
any transaction contemplated by this Agreement, (B) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (C) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court and (D) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
transaction contemplated by this Agreement. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of Delaware or in any Federal court located in
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
(l) The descriptive headings used 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.
(m) This Agreement may be executed in counterparts, each of
which (including facsimile copies) shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same agreement.
(n) Except as otherwise provided herein, each party shall pay
its, his or her own expenses incurred in connection with this Agreement
9
<PAGE> 10
IN WITNESS WHEREOF, Purchaser and the Shareholders have caused
this Agreement to be duly executed as of the day and year first above written.
BRADY CORPORATION
By: /s/ David W. Schroeder
--------------------------------
Name: David W. Schroeder
Title:Group Vice President
SHAREHOLDERS:
/s/ Ralph E. Crump
--------------------------------
Ralph E. Crump
/s/ Marjorie L. Crump
--------------------------------
Marjorie L. Crump
/s/ Richard L. Kalich
--------------------------------
Richard L. Kalich
/s/ Judith Kalich
--------------------------------
Judith Kalich
/s/ David Sturdevant
--------------------------------
David Sturdevant
/s/ Robert W. Ham
--------------------------------
Robert W. Ham
TRIGRAN INVESTMENTS, L.P.
By: /s/ Doug Granat
----------------------------
Name: Doug Granat
Title: President of Trigan Investments, Inc.,
General Partner
10
<PAGE> 11
/s/ Stevev D. Anton
--------------------------------
Steven D. Anton
11
<PAGE> 12
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME, FACSIMILE NUMBER AND ADDRESS OF COMMON STOCK
OF SHAREHOLDER BENEFICIALLY OWNED
<S> <C>
Ralph E. Crump 151,466
28 Twisted Oak Circle
Trumbell, CT 06611
Fax: 203-261-1852
Marjorie L. Crump 147,965
28 Twisted Oak Circle
Trumbell, CT 06611
Fax: 203-261-1852
Richard L. Kalich 109,900
16 North Shore Road
Spofford, NH 03462
Fax: 603-363-4862
Judith Kalich 28,700
16 North Shore Road
Spofford, NH 03462
Fax: 603-363-4862
TRIGRAN INVESTMENTS, L.P. 273,120
Douglas T. Granat
155 Pfingsten Road, Suite 360
Deerfield, IL 60015
Fax: 847-405-9599
David Sturdevant 81,875
1265 Montecto Ave.
Mountain View, CA 94043
Fax: 650-968-0141
Robert W. Ham 27,300
129 South 3d Street
Delevan, WI 53115
Fax: 414-728-7789
</TABLE>
I-1
<PAGE> 13
<TABLE>
<CAPTION>
NAME, FACSIMILE NUMBER AND ADDRESS NUMBER OF SHARES
OF SHAREHOLDER OF COMMON STOCK
BENEFICALLY OWNED
<S> <C>
Steven D. Anton 55,000
37 Church Street
Keene, New Hampshire 03431
Fax: 802-463-4334
</TABLE>
I-2
<PAGE> 1
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of December 9, 1999
(the "Agreement"), among Brady Corporation ("Parent"), a Wisconsin corporation ,
and Laifer Capital Management, Inc. (the "Shareholder").
R E C I T A L S:
WHEREAS, Parent has indicated its willingness to enter into an
agreement for the acquisition of Imtec, Inc., a Delaware corporation ("Company")
through an Agreement and Plan of Merger (the "Merger Agreement") which would
provide, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Parent or a subsidiary (in either
event, the "Purchaser") for all outstanding shares of Common Stock, par value
$0.01 per share, of the Company (the "Common Stock") and for the subsequent
merger of Purchaser with the Company (the "Merger"), all on the terms and
subject to the conditions to be set forth in the Merger Agreement;
WHEREAS, as an inducement and a condition to entering into
negotiation of the Merger Agreement, Purchaser has required that the Shareholder
agree, and the Shareholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved
this Agreement and the transactions contemplated hereby prior to the date
hereof;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. Definitions. Capitalized terms have the meanings
provided herein.
2. Tender of Shares; Agreement to Sell.
(a) In order to induce Parent to enter into negotiation
of the Merger Agreement, the Shareholder hereby agrees to validly tender (or
cause the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
tenth business day after commencement of the Offer, 109,377 shares of Common
Stock (the "Shares"), all of which are beneficially owned by Shareholder. The
Shareholder hereby acknowledges and agrees that Purchaser's obligation to accept
for payment, purchase and pay for shares in the Offer, including the Shares
beneficially owned by the Shareholders, is subject to the terms and conditions
of the Offer. Purchaser, by written notice delivered to the Shareholder, will
have the right to direct the Shareholder not to tender to, or to withdraw
<PAGE> 2
from, the Offer any Shares beneficially owned by such Shareholder and, upon
receipt of any such notice, the Shareholder shall comply with the direction
included in such notice.
(b) As promptly as practicable following the expiration
of the Offer (but in no event later than 10:00 a.m., Milwaukee time, on the
first trading day immediately after such expiration), the Shareholder hereby
agrees to sell to Purchaser, and Purchaser agrees to purchase, all Shares owned
by such Shareholder not tendered or validly withdrawn from the Offer pursuant to
Section 2(a) at a price equal to $12.00 per Share or, if less, the price
provided in the Merger Agreement. The obligations of the Shareholder and
Purchaser in this Section 2(b) is conditioned upon Purchaser purchasing shares
of Common Stock pursuant to the Offer.
(c) Purchaser shall be entitled to deduct and withhold
from the consideration otherwise payable hereunder to the Shareholder any stock
transfer taxes and such amounts as are required to be withheld under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
provision of state, local or foreign tax law, as specified in the Offer
Documents. To the extent that amounts are so withheld by Purchaser, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the Shareholder in respect of which such deduction and withholding
was made by Purchaser.
(d) The Shareholder hereby permits Purchaser to
publish and disclose in the Offer Documents and, if approval of the Company's
shareholders is required under applicable law, any proxy statement (including
all documents and schedules filed with the SEC), the Shareholder's identity and
ownership of the Shares and the nature of the Shareholder's commitments,
arrangements and understandings under this Agreement; provided that the
Shareholder shall have the right to review and comment on such disclosure a
reasonable time before it is publicly disclosed.
3. Option. (a) In order to induce Parent to enter into
negotiation of the Merger Agreement, the Shareholder hereby grants to Purchaser
an irrevocable option (the "Option") to purchase the Shares (the "Option
Shares") at a price equal to $12.00 per Share, subject to adjustment in the
event of a stock-split, stock dividend or additional share issuance by the
Company. The Option granted by the Shareholder may be exercised in whole or in
part at any time after (i) sixty days from the date hereof if the Merger
Agreement has not been signed by the Company and Purchaser; (ii) the occurrence
of any event as a result of which Parent is entitled to receive a termination
fee under the Merger Agreement or (iii) such time as the Shareholder shall have
breached any of its agreements in the Merger Agreement.
(b) The Option that becomes exercisable under Section 3(a)
shall remain exercisable until the later of (i) the date that is 120 days after
the date the
2
<PAGE> 3
Option becomes exercisable and (ii) the date that is 60 days after the date that
all waiting periods under the Hart-Scott-Rodino Anti-Trust Improvements Act (the
"HSR Act") required for the purchase of the Shares upon such exercise shall have
expired or been terminated; provided that if at the expiration of such period
there shall be in effect any injunction or other order issued by any federal,
state, local or foreign governmental unit or agency (a "Governmental Entity")
prohibiting the exercise of the Option, the exercise period shall be extended
until 60 days after the date that no such injunction or order is in effect. In
the event that Purchaser wishes to exercise the Option, Purchaser shall send a
written notice to the Shareholder identifying the place and date (not less than
two nor more than ten business days from the date of the notice) for the closing
of such purchase.
4. Additional Agreements.
(a) Subject to Section 8 of this Agreement, the
Shareholder shall, at any meeting of the shareholders of the Company, however
called, or in connection with any written consent of the shareholders of the
Company, vote (or cause to be voted) all Shares then held of record or
beneficially owned by such Shareholder, (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
of the terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance thereof and
hereof and (ii) against any proposal relating to an acquisition proposal by any
person or entity other than Purchaser (an "Acquisition Proposal") and against
any action or agreement that would impede, frustrate, prevent or nullify this
Agreement, or result in a breach in any respect of any covenant, representation
or warranty or any other obligation or agreement of the Company under the Merger
Agreement or which would result in any of the conditions set forth in the Merger
Agreement not being fulfilled.
(b) The Shareholder hereby covenants and agrees that,
except as contemplated by this Agreement and the Merger Agreement, it shall not
(i) offer to transfer (which term shall include, without limitation, any sale,
tender, gift, pledge, assignment or other disposition), transfer or consent to
any transfer of, any or all of the Shares or any interest therein, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of the Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization or consent in or with
respect to the Shares, (iv) deposit the Shares into a voting trust or enter into
a voting agreement or arrangement with respect to the Shares or (v) take any
other action that would make any representation or warranty of the Shareholder
contained herein untrue or incorrect or in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
3
<PAGE> 4
(c) The Shareholder hereby irrevocably grants to,
and appoints, Purchaser and any designee of Purchaser, and each of them
individually, the Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Shareholder, to vote
the Shares, or grant a consent or approval in respect of the Shares, in the
manner specified in Section 4(a). The Shareholder represents that any proxies
heretofore given in respect of the Shares beneficially owned by the Shareholder
are not irrevocable and that any such proxies are hereby revoked. The
Shareholder hereby affirms that the irrevocable proxy set forth in this Section
4(c) is given in connection with the Purchaser's agreement to undertake
negotiation of the Merger Agreement and that such irrevocable proxy is given to
secure the performance of the duties of the Shareholder under this Agreement.
The Shareholder hereby further affirms that the irrevocable proxy is coupled
with an interest and may under no circumstances be revoked. The Shareholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done by virtue hereof. Without limiting the generality of the
foregoing, such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the Delaware Corporation Law.
(d) The Shareholder hereby agrees that neither the
Shareholder nor any of its affiliates, representatives or agents shall (and the
Shareholder shall cause its officers, directors, partners, and employees,
representatives and agents, including its investment bankers, attorneys and
accountants, not to), directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. The Shareholder will immediately cease any existing activities,
discussions or negotiations conducted heretofore with respect to any Acquisition
Proposal. The Shareholder will immediately communicate to Purchaser the terms of
any Acquisition Proposal (or any discussion, negotiation or inquiry with respect
thereto) and the identity of the person making such Proposal or inquiry which it
may receive.
(e) Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws to consummate and
make effective the transactions contemplated by this Agreement. Each party shall
promptly consult with the other and provide any necessary information and
material with respect to all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
4
<PAGE> 5
(f) The Shareholder hereby waives any rights of
appraisal or rights to dissent from the Merger that it may have.
5. Representations and Warranties of the Shareholder.
The Shareholder hereby represents and warrants to Purchaser as follows:
(a) The Shareholder is the record and beneficial owner
of the Shares. The Shareholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2, 3 and 4
hereof, sole power of disposition, sole power to demand and waive appraisal
rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
(b) The Shareholder has the power and authority to
enter into and perform all of the Shareholder's obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
the Shareholder and constitutes a legal, valid and binding agreement of the
Shareholder, enforceable against the Shareholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Shareholder is a trustee, or any party to any
other agreement or arrangement, whose consent is required for the execution and
delivery of this Agreement or the consummation by the Shareholder of the
transactions contemplated hereby.
(c) Except for filings under the HSR Act and the
Securities Exchange Act of 1934 (the "Exchange Act") (i) no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery of this Agreement by the Shareholder,
the consummation by the Shareholder of the transactions contemplated hereby and
the compliance by the Shareholder with the provisions hereof and (ii) none of
the execution and delivery of this Agreement by the Shareholder, the
consummation by the Shareholder of the transactions contemplated hereby or
compliance by the Shareholder with any of the provisions hereof, except in cases
in which any conflict, breach, default or violation described below would not
interfere with the ability of the Shareholder to perform the Shareholder's
obligations hereunder, shall (A) conflict with or result in any breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, modification or
acceleration) under, any of the terms, conditions or provisions of any note,
loan agreement, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of any
kind, including, without limitation, any voting agreement, proxy arrangement,
pledge agreement, shareholders agreement or voting trust, to which the
Shareholder is a party or by which it or any of its properties or assets may be
5
<PAGE> 6
bound or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to the Shareholder or any of its
properties or assets.
(d) Except as permitted by this Agreement, the
Shares beneficially owned by such Shareholder and the certificates representing
such shares are now, and at all times during the term hereof will be, held by
the Shareholder, or by a nominee or custodian for the benefit of the
Shareholder, free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by the Shareholder of the
Shares to Purchaser in the Offer or hereunder shall pass to and unconditionally
vest in Purchaser good and valid title to all Shares, free and clear of all
liens, proxies, voting trusts or agreements, understandings or arrangements or
any other rights whatsoever.
(e) No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Shareholder.
6. Stop Transfer. The Shareholder shall request that
the Company not register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of the Shares, unless
such transfer is made in compliance with this Agreement.
7. Termination. This Agreement shall terminate with
respect to the Shareholder upon the earliest of (a) the effective time of the
Merger Agreement, (b) the first anniversary of the date hereof or (c) the
termination of the Merger Agreement (unless, in the case of this clause (c),
Purchaser is or may be entitled to receive a termination fee under the Merger
Agreement following such termination or prior to such termination the
Shareholder has breached Section 2(a), 4(a), 4(b) or 4(d)).
8. No Limitation. Nothing in this Agreement shall be
construed to prohibit the Shareholder, or any officer or affiliate of the
Shareholder who is or has designated a member of the Board of Directors of the
Company, from taking any action solely in his or her capacity as a member of the
Board of Directors of the Company or from exercising his or her fiduciary duties
as a member of such Board of Directors to the extent specifically permitted by
the Delaware General Corporation Law, as may be modified by the terms of the
Merger Agreement.
9. Miscellaneous. (a) This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
6
<PAGE> 7
(b) This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the
Shareholder (in the case of any assignment by Purchaser ) or Purchaser (in the
case of an assignment by the Shareholder), provided that Purchaser may assign
its rights and obligations hereunder to any direct or indirect subsidiary of
Parent, but no such assignment shall relieve Purchaser of its obligations
hereunder.
(c) Without limiting any other rights Purchaser may
have hereunder in respect of any transfer of Shares, the Shareholder agrees that
this Agreement and the obligations hereunder shall attach to the Shares and
shall be binding upon any person to which legal or beneficial ownership of the
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Shareholder's heirs, guardians, administrators or successors.
(d) This Agreement may not be amended, changed,
supplemented or otherwise modified except by an instrument in writing signed on
behalf of the Shareholder and Purchaser.
(e) 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 received if given) by hand delivery or by facsimile
transmission with confirmation of receipt, as follows:
If to a Shareholder:
Laifer Capital Management, Inc.
Hilltop Partners, L.P.
45 West 45th Street
New York, New York 10036
Fax: (212) 268-8036
If to Parent or Purchaser:
Brady Corporation
6555 W. Good Hope Road
Milwaukee, Wisconsin 53223
Attention: Gary Johnson
Facsimile No.: (414) 438-6840
7
<PAGE> 8
With a copy to:
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Conrad G. Goodkind
Facsimile No.: (414) 271-3552
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction such invalidity, illegality
or unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
(h) The failure of any party hereto to exercise any
rights, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(i) 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 confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware.
(k) The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the
8
<PAGE> 9
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (A) consents to submit itself to the personal jurisdiction of any
Delaware state court or any Federal court located in Delaware in the event any
dispute arises out of this Agreement or by any transaction contemplated by this
Agreement, (B) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (C)
agrees that it will not bring any action relating to this Agreement or any
transaction contemplated by this Agreement in any court other than any such
court and (D) waives any right to trial by jury with respect to any action
related to or arising out of this Agreement or any transaction contemplated by
this Agreement. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in the courts of the State of
Delaware or in any Federal court located in Delaware, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
(l) The descriptive headings used 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.
(m) This Agreement may be executed in counterparts,
each of which (including facsimile copies) shall be deemed to be an original,
but all of which, taken together, shall constitute one and the same agreement.
(n) Except as otherwise provided herein, each party
shall pay its, his or her own expenses incurred in connection with this
Agreement.
9
<PAGE> 10
IN WITNESS WHEREOF, Purchaser and the Shareholder have caused
this Agreement to be duly executed as of the day and year first above written.
BRADY CORPORATION
By: /s/ David W. Schroeder
------------------------------------
Name: David W. Schroeder
Title: Group Vice President
LAIFER CAPITAL MANAGEMENT, INC.
By: /s/ Ranie Hotis
------------------------------------
Name: Ranie Hotis
Title: Vice President
10
