Exhibit 99.3
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of June 2, 2000 (this "AGREEMENT"), by
the undersigned shareholders (collectively, the "SHAREHOLDERS") of Lunar
Corporation, a Wisconsin corporation (the "COMPANY"), for the benefit of GE
Medical Systems, a division of General Electric Company, a New York corporation
("PARENT").
RECITALS
A. Parent, Topaz Merger Corp., a Wisconsin corporation and a direct
wholly owned subsidiary of Parent ("SUB"), and the Company are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "MERGER
AGREEMENT"), whereby, upon the terms and subject to the conditions set forth in
the Merger Agreement, each issued and outstanding share of Common Stock, par
value $0.01 per share, of the Company ("COMPANY COMMON STOCK"), not owned
directly or indirectly by Parent or the Company, will be converted into shares
of Common Stock, par value $0.16 per share, of Parent ("PARENT COMMON STOCK");
B. As of the date hereof, each Shareholder owns that number of shares
of Company Common Stock appearing opposite his name on SCHEDULE A (such shares
of Company Common Stock together with any other shares of capital stock of the
Company acquired by such Shareholder, individually, after the date hereof during
the term of this Agreement, whether upon the exercise of options or by means of
purchase, dividend, distribution or otherwise, being collectively referred to
herein as the "SUBJECT SHARES"); and
C. As a condition to its willingness to enter into the Merger
Agreement, Parent has required that the Shareholders agree, and in order to
induce Parent to enter into the Merger Agreement the Shareholders have agreed,
to enter into this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, the parties hereto agree as
follows, the obligations of the shareholders hereunder to be several and not
joint or joint and several (except as otherwise set forth in Section 3
hereof):
1. COVENANTS OF SHAREHOLDERS. Until the termination of this Agreement
in accordance with Section 8, the Shareholders agree as follows:
(a) The Shareholders shall attend the Shareholder Meeting, in
person or by proxy, and at the Shareholder Meeting (or at any
adjournment thereof) or in any other circumstances upon which a vote,
consent or other approval with respect to the Merger and the Merger
Agreement is sought, the Shareholders shall vote (or cause to be voted)
the Subject Shares in favor of the Merger, the adoption of the Merger
Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholders' vote, consent or other
approval is sought, the Shareholders shall vote (or cause to be voted)
the Subject Shares against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any
Subsidiary or any Takeover Proposal or (ii) any amendment of the
Company's Restated Certificate of Incorporation, or By-laws or other
proposal or transaction involving the Company or any of its
Subsidiaries, which amendment or other proposal or transaction would in
any manner impede, frustrate, prevent or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger
Agreement or change in any manner the voting rights of any class of
capital stock of the Company. The Shareholders further agrees not to
commit or agree to take any action inconsistent with the foregoing.
(c) The Shareholders agree not to (i) sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively,
"TRANSFER"), or enter into any contract, option or other arrangement
(including any profit-sharing arrangement) with respect to the Transfer
of the Subject Shares to any person or (ii) enter into any voting
arrangement, whether by proxy, voting agreement or otherwise, in
relation to the Subject Shares, and agree not to commit or agree to
take any of the foregoing actions; provided, however, that the
Shareholder may (A) Transfer up to 2% of the Subject Shares by gift to
charitable organizations and up to 2% of the Subject Shares by gift to
members of the "immediate family" (as defined in Rule 16a-1(e) of the
Exchange Act) of the Shareholder; and (B) pledge as collateral up to 2%
of the Subject Shares in connection with the exercise of Company Stock
Options held by the Shareholder pursuant to the Company Stock Option
Plans; provided, that in each case any transferee or pledgee of such
Subject Shares agrees in writing to be bound by the terms of this
Agreement to the same degree as the Shareholders as transferors.
(d) The Shareholders shall not, nor shall the Shareholders
authorize any investment banker, attorney or other advisor or
representative of the Shareholders to, directly or indirectly (i)
solicit, initiate or encourage the submission of, any Takeover Proposal
or (ii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to the Company or
any Subsidiary in connection with, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes
or may reasonably be expected to lead to, any Takeover Proposal, except
in their capacity as representatives or agents of the Company, as
permitted by the terms and conditions of the Merger Agreement.
(e) The Shareholders shall use the Shareholders' reasonable
best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with Parent in doing, all
things necessary, proper or advisable to support and to consummate and
make effective, in the most expeditious manner practicable, the Merger
and the other transactions contemplated by the Merger Agreement, except
in their capacity as representatives or agents of the Company, as
permitted by the terms and conditions of the Merger Agreement.
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(f) The Shareholders agree to promptly notify Parent in
writing of the nature and amount of any acquisition by such Shareholder
of any voting securities of the Company acquired by such Shareholder
hereinafter.
(g) The Shareholders shall not knowingly take or fail to take
any action which would cause the Merger to not qualify as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code.
(h) The Shareholder hereby revokes any and all prior proxies
or powers of attorney in respect of any of Subject Shares.
2. REPRESENTATIONS AND WARRANTIES. Each Shareholder represents and
warrants with respect to himself to Parent as follows:
(a) Except for the Shareholder that is indicated as a record
as well as a beneficial owner of certain shares as indicated on
Schedule A hereto, the record owner of the Subject Shares is a member
firm of the New York Stock Exchange which holds such shares in street
name for the convenience of such Shareholder. The Shareholder does not
own, of record or beneficially, any shares of capital stock of the
Company other than the Subject Shares.- The Shareholder has the sole
right to vote, and the sole power of disposition with respect to, the
Subject Shares, and none of the Subject Shares is subject to any voting
trust, proxy or other agreement, arrangement or restriction with
respect to the voting or disposition of such Subject Shares, except as
contemplated by this Agreement.
(b) This Agreement has been duly executed and delivered by the
Shareholder. Assuming the due authorization, execution and delivery of
this Agreement by Parent, this Agreement constitutes the valid and
binding agreement of the Shareholder enforceable against the
Shareholder in accordance with its terms. The execution and delivery of
this Agreement by the Shareholder does not and will not conflict with
any agreement, order or other instrument binding upon the Shareholder,
nor require any regulatory filing or approval, other than pursuant to
the HSR Act (as defined below).
3. BREACH; LIQUIDATED DAMAGES. In the event of a breach by one or more
Shareholders, and in lieu of any other monetary damages for breach of this
Agreement, the Shareholders, jointly and severally, shall (i) pay to the Parent
as liquidated damages the Fixed Damages Payment and (ii) upon the occurrence of
a Triggering Event, in addition to the occurrence of such breach, the
Shareholders shall pay the Parent the Variable Damages Payment. In connection
with the calculation of the amount of any Variable Damages Payment, in the event
of any change in the number of issued and outstanding shares of Subject Shares
by reason of any stock dividend, stock split, split-up, recapitalization, merger
or other change in the corporate or capital structure of the Company, the number
of Subject Shares subject to the calculation of the Variable Damages Payment and
the Exercise Price per Subject Share shall be appropriately adjusted. The
capitalized terms used in this Section 3 and not otherwise defined have the
meaning set forth in Section 4 below.
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4. DEFINITIONS.
(a) A "Triggering Event" shall mean one or more of the following events
shall have occurred on or after the date hereof: (A) any person, corporation,
partnership, limited liability company or other entity or group (such person,
corporation, partnership, limited liability company or other entity or group,
other than Parent or an affiliate of Parent, being referred to hereinafter,
singularly or collectively, as a "PERSON"), acquires or becomes the beneficial
owner of 20% or more of the outstanding shares of Company Common Stock; (B) any
group is formed which beneficially owns 20% or more of the outstanding shares of
Company Common Stock; (C) any Person shall have commenced a tender or exchange
offer for 20% or more of the then outstanding shares of Company Common Stock or
publicly proposed any bona fide merger, consolidation or acquisition of all or
substantially all the assets of the Company, or other similar business
combination involving the Company, and any Shareholder shall have tendered
Subject Shares in response to such offer or breached Section 1(b) in relation to
any such public proposal; (D) the Company enters into, or announces that it
proposes to enter into, an agreement, including, without limitation, an
agreement in principle, providing for a merger or other usiness combination
involving the Company or a "significant subsidiary" (as defined in Rule 1.02(w)
of Regulation S-X as promulgated by the Securities and Exchange Commission (the
"SEC")) of the Company or the acquisition of a substantial interest in, or a
substantial portion of the assets, business or operations of, the Company or a
significant subsidiary (other than the transactions contemplated by the Merger
Agreement); (E) any Person is granted any option or right, conditional or
otherwise, to acquire or otherwise become the beneficial owner of shares of
Company Common Stock which, together with all shares of Company Common Stock
beneficially owned by such Person, results or would result in such Person being
the beneficial owner of 20% or more of the outstanding shares of Company Common
Stock; or (F) there is a public announcement with respect to a plan or intention
by the Company, other than Parent or its affiliates, to effect any of the
foregoing transactions. For purposes of this subparagraph (iii), the terms
"group" and "beneficial owner" shall be defined by reference to Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the
rules and regulations promulgated thereunder.
(b) The "Fixed Damages Payment" is defined as $2,000,000.
(c) The "Variable Damages Payment" is an amount (not less than zero)
equal to the product of the excess of the Market Price over the
Exercise Price multiplied by the number of Subject Shares minus the sum
of (A) the aggregate amount of the actual taxes (including the tax
benefit of the amounts paid to Parent), if any, payable by the
Shareholders with respect to the sale, if any, of the Subject Shares in
connection with the Triggering Event and (B) $2,000,000.
(d) The "Market Price" is the highest price at which any Person is
offering to purchase a share of Common Stock of the Company (or, for
all purposes in this definition, equivalents thereof) or being offered
the opportunity to purchase Common Stock of the Company in connection
with a Triggering Event.
(e) The "Exercise Price" shall mean a price per Subject Share equal to
$17.00.
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5. PAYMENT OF LIQUIDATED DAMAGES. Payment made by Shareholders to
Parent of liquidated damages pursuant to this Agreement shall be made by wire
transfer of federal funds to a bank designated by Parent or a check payable in
immediately available funds.
6. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and
warrants to the Company that the execution and delivery of this Agreement by
Parent and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
this Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding agreement of Parent.
7. THE CLOSING. Any closing hereunder shall take place on the Closing
Date specified by Parent in its Stock Exercise Notice pursuant to Section 1 at
10:00 A.M., local time, or the first business day thereafter on which all of the
conditions in Section 2 are met, at the principal executive office of the
Company, or at such other time and place as the parties hereto may agree.
8. TERMINATION. The obligations of the Shareholders hereunder shall
terminate upon the earlier to occur of (i) 9 months after the termination of the
Merger Agreement pursuant to Section 7.1 thereof and (ii) the Effective Time;
PROVIDED, HOWEVER, that if the Merger Agreement is terminated by the Company
pursuant to Section 7.1(b), (c) or (d) thereof (other than a termination
pursuant to Section 7.1(d)(i) following receipt of a Superior Proposal) or if
the Merger Agreement is terminated pursuant to Section 7.1(a) thereof, then such
obligations shall terminate upon the termination of the Merger Agreement. No
such termination of this Agreement shall relieve any party hereto from any
liability for any breach of this Agreement prior to termination.
9. FURTHER ASSURANCES. The Shareholders will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as Parent may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
10. SUCCESSORS, ASSIGNS AND TRANSFEREES BOUND. Any successor, assignee
or transferee (including a successor, assignee or transferee as a result of the
death of the Shareholder, such as an executor or heir) shall be bound by the
terms hereof, and the Shareholders shall take any and all actions necessary to
obtain the written confirmation from such successor, assignee or transferee that
it is bound by the terms hereof.
11. AFFILIATE LETTER. The Shareholders agree to execute and deliver on
a timely basis, when and if requested by Parent, a written agreement in
substantially the form of Exhibit D to the Merger Agreement.
12. REMEDIES. The Shareholders acknowledge that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement by
it, and that any such breach would cause Parent irreparable harm. Accordingly,
the Shareholders agree that in the event of any breach or threatened breach of
this Agreement, Parent, in addition to any other remedies at law or in equity it
may have, shall be entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific
performance.
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13. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such jurisdiction, or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
14. AMENDMENT. This Agreement may be amended only by means of a written
instrument executed and delivered by both the Shareholders and Parent.
15. JURISDICTION. Each party hereby irrevocably submits to the
exclusive jurisdiction of the U.S. District Court for the Southern District of
New York in any action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such courts (and waives any objection based on FORUM NON CONVENIENS or
any other objection to venue therein). Each party hereto waives any right to a
trial by jury in connection with any such action, suit or proceeding.
16. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
17. EXPENSES. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise provided in Section 8 or as
specified in the Merger Agreement. Notwithstanding the foregoing, the Company
shall pay fees and disbursements, in an amount not to exceed $10,000, of Piper
Marbury Rudnick & Wolfe as counsel to the Shareholders for this transaction.
18. SPECIFIC PERFORMANCE. The parties hereto 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 hereof, this being in addition to any
other remedy to which they are entitled at law or in equity. Furthermore the
parties agree that the liquidated damages provided for herein are in the nature
of compensation for damages, and not a penalty, and are reasonable in relation
to the damages and losses that Parent is likely to incur as a result of the
circumstances under which they are payable.
19. NOTICE. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or if sent by
telex or telecopier (and also confirmed in writing) to the person at the address
set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
(a) if to Parent, to:
GE Medical Systems
P.O. Box 414, W-410
Milwaukee, WI 53201
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Attn: General Counsel
Fax: 414-544-3575
with copies to:
GE Medical Systems
3000 North Grandview Boulevard
Waukesha, WI 53188
Attn: General Counsel
and:
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431-0001
Attn: Vice President and Senior Counsel--Transactions
Fax: 203-373-3008
and:
Gibson Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Steven Shoemate
Facsimile No.: 212-351-4035
(b) if to the Shareholder to:
Richard Mazess
3534 Blackhawk Drive
Madison, WI 53705
with a copy to:
Piper Marbury Rudnick & Wolfe
203 North LaSalle Street
Chicago, IL 60601
Attn: Mitchell L. Hollins
Fax: 312-236-7516
20. CAPITALIZED TERMS. Capitalized terms used in this Agreement that
are not defined herein shall have such meanings as set forth in the Merger
Agreement.
21. COUNTERPARTS. For the convenience of the parties, this Agreement
may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
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22. NO LIMITATION ON ACTIONS OF THE SHAREHOLDERS AS DIRECTOR.
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholders to take
or in any way limit any action that the Shareholders may take to discharge the
Shareholders' fiduciary duties as a director of the Company, including but not
limited to the right to vote for or support a Superior Proposal in accordance
with the terms of the Merger Agreement.
23. WAIVER OF APPRAISAL RIGHTS. Each Shareholder hereby waives any
rights of appraisal or rights to dissent from the Merger.
24. STOP TRANSFER. The Shareholders shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Subject Shares, unless such
transfer is made in compliance with this Agreement.
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IN WITNESS WHEREOF, the Shareholders and Parent have caused this Agreement to be
duly executed and delivered on the day first above written.
SHAREHOLDERS
/s/ Richard B. Mazess
-----------------------------------
Richard B. Mazess
/s/ Marilyn Mazess
-----------------------------------
Marilyn Mazess
/s/ Richard B. Mazess
-----------------------------------
Richard B. Mazess, as custodian
under the Uniform Gifts to Minors Act
/s/ Richard B. Mazess
-----------------------------------
Richard B. Mazess, as custodian
under the Uniform Gifts to Minors Act
GENERAL ELECTRIC COMPANY,
a New York corporation
By: /s/ J. Keith Morgan
-----------------------------------
Name: J. Keith Morgan
Title: Vice President and General Counsel
GE Medical Systems
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SCHEDULE A
NUMBER OF
RECORD OWNER BENEFICIAL OWNER SHARES
Richard B. Mazess Richard B. Mazess 911,260
Robert W. Baird & Co. Richard B. Mazess 1,750
Salomon Smith Barney, Inc. Richard B. Mazess and Marilyn 1,334,335
Mazess as joint tenants with right
of survivorship
Salomon Smith Barney, Inc. Richard B. Mazess as custodian 347,500
under Uniform Gifts to Minors Act
Salomon Smith Barney, Inc. Richard B. Mazess as custodian 260,000
under Uniform Gifts to Minors Act
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