EXHIBIT 2.2
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement"), dated as of February 13, 2002,
among Smith & Nephew, Inc., a Delaware corporation ("Parent"), Orchid Merger
Corp, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"),
and the undersigned stockholder (the "Stockholder") of ORATEC Interventions,
Inc., a Delaware corporation (the "Company").
WHEREAS, Parent, Sub and the Company are contemporaneously with the
execution hereof entering into an Agreement and Plan of Merger dated as of even
date herewith (as the same may be amended or supplemented, the "Merger
Agreement") to provide for the making of a cash tender offer (as such offer may
be amended from time to time, the "Offer") by Sub for any and all shares of
common stock, par value $.001 per share, of the Company (the "Common Stock") at
the Offer Price (as defined in the Merger Agreement) and the merger of the
Company and Sub (the "Merger");
WHEREAS, the Stockholder legally and/or beneficially owns that number of
shares of Common Stock appearing on the signature page hereof (such shares, as
they may be adjusted by any stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company (each, an "Adjustment Event"),
and any additional shares of Common Stock that become legally and/or
beneficially owned by the Stockholder as the result of the exercise of any
stock option, warrant or other security after the date hereof, being referred
to herein as the "Subject Shares"); and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in consideration
of their entering into, the Merger Agreement, and in consideration of the
premises and the representations, warranties and agreements contained herein,
the parties agree as follows:
1. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder enforceable in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws of general applicability
relating to or affecting the enforcement of creditors' rights and by the
effect of general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law). The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, result in any violation of or default (with or without
notice or lapse of time or both) under, any provision of any trust
agreement, loan or credit agreement, note, bond, security agreement,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, notice, decree, statute,
law, ordinance, rule or regulation applicable to the Stockholder or to the
Stockholder's property or assets. Except for informational filings with the
SEC, no consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic, foreign or
supranational, is required by or with respect to the Stockholder in
connection with the execution and delivery of this Agreement or the
consummation by the Stockholder of the transactions contemplated hereby.
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(b) The Shares. The Stockholder has good and marketable title to the
Subject Shares, free and clear of any claims, liens, encumbrances, security
interests, proxies, voting trusts, agreements, options, rights or any other
encumbrances whatsoever on title, transfer, or exercise of any rights of a
stockholder in respect of such Subject Shares except for any encumbrances
arising hereunder. The Stockholder owns legally and/or beneficially no
shares of Common Stock other than the Subject Shares.
2. Representations and Warranties of Parent and Sub. Parent and Sub hereby
represent and warrant to the Stockholder that each of Parent and Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly executed and
delivered by Parent and Sub and constitutes a valid and binding obligation of
Parent and Sub enforceable in accordance with its terms, except to the extent
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws of general applicability
relating to or affecting the enforcement or creditors' rights and by the affect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
3. Covenants of the Stockholder. From and after the date hereof through
and including the Termination Date, the Stockholder agrees as follows:
(a) At any meeting of stockholders of the Company called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Stockholder
shall vote (or cause to be voted) the Subject Shares in favor of the Merger,
the adoption of the Merger Agreement and the approval of the terms thereof
and each of the other transactions contemplated by the Merger Agreement,
provided that the terms of the Merger Agreement shall not have been amended
to adversely affect the Stockholder.
(b) At any meeting of stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which the Stockholder's vote,
consent or other approval is sought, the Stockholder shall vote (or cause to
be voted) the Subject Shares against (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any other
Takeover Proposal, or (ii) any amendment of the Company's certificate of
incorporation or by-laws or other proposal, transaction or agreement
involving the Company or any of its subsidiaries, which amendment or other
proposal, transaction or agreement would in any manner impede, frustrate,
prevent, delay or nullify the Offer, the Merger, the Merger Agreement or any
of the other transactions contemplated by the Merger Agreement.
(c) The Stockholder agrees not to, directly or indirectly (i) sell,
transfer, pledge, assign or otherwise dispose of (including by gift), or
enter into any contract, option or other arrangement (including any profit
sharing arrangement) with respect to the sale, transfer, pledge, assignment
or other disposition ("Transfer") of, the Subject Shares to any person other
than Sub or Sub's designee; provided, that nothing contained herein will be
deemed to restrict (A) the exercise or conversion of any stock option, (B)
the entry by the Stockholder into "hedging" or similar economic transactions
with respect to the Subject Shares so long as such "hedging" or similar
economic transactions do not restrict or otherwise inhibit the Stockholder's
ability to vote the Subject Shares in accordance with the requirements of
this Agreement and to otherwise comply with the covenants and agreements of
the Stockholder contained herein, or (C) the Transfer of any Subject Shares
to any person who agrees to be bound by the terms and conditions of this
Agreement pursuant to a written agreement in a form reasonably satisfactory
to Parent, or (ii) enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, in connection, directly or indirectly, with
any Takeover Proposal.
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(d) Subject to Section 10, the Stockholder shall not, nor shall the
Stockholder permit any investment banker, attorney or other adviser or
representative of the Stockholder to, (i) directly or indirectly solicit,
initiate or encourage the submission of any Takeover Proposal or proposal to
acquire the Subject Shares or (ii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal or proposal to acquire the
Subject Shares.
(e) The Stockholder agrees to validly tender all of the Subject Shares
within 10 business days following commencement of the Offer pursuant to and
in accordance with the terms of the Offer and, provided that this Agreement
has not been terminated, the Stockholder agrees not to withdraw any Subject
Shares so tendered prior to the termination of the Offer.
4. Grant of Proxy. (a) The Stockholder hereby irrevocably grants to, and
appoints, Parent and each of its designees, and each of them individually, as
the Stockholder's proxy and attorney-in-fact (with full power of substitution
and resubstitution), for and in the name, place and stead of the Stockholder,
to vote the Subject Shares, or execute one or more written consents in respect
of the Subject Shares, (i) in favor of the Merger, the approval of the Merger
Agreement and the approval of the terms thereof and each of the transactions
contemplated by the Merger Agreement, (ii) against 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 other
Takeover Proposal, and (iii) against any amendment of the Company's certificate
of incorporation or by-laws or other proposal, transaction or agreement
involving the Company or any of its subsidiaries, which amendment or other
proposal, transaction or agreement would in any manner impede, frustrate,
prevent, delay or nullify the Offer, the Merger, the Merger Agreement or any
other transactions contemplated by the Merger Agreement. Notwithstanding
anything contained herein to the contrary, such irrevocable proxy will not be
exercised by Parent or any of its designees unless the Stockholder breaches its
obligations under Section 4 of this Agreement. No proxy is given hereby with
respect to any matters other than those enumerated above.
(b) The Stockholder represents and warrants that any proxies heretofore
given in respect of the Subject Shares are revocable, and that any such
proxies have been or are hereby revoked.
(c) The Stockholder hereby affirms that the irrevocable proxy set forth
in this Section 4 is given in connection with the execution of the Merger
Agreement and that such irrevocable proxy is given to secure the performance
of the duties of the Stockholder under this Agreement. The Stockholder
hereby affirms that the irrevocable proxy set forth in this Section 4 is
coupled with an interest and is intended to be irrevocable in accordance
with the provisions of Section 212 of the General Corporation Law of the
State of Delaware, as amended, prior to the termination of this Agreement.
Notwithstanding anything contained herein to the contrary, this irrevocable
proxy shall automatically terminate upon termination of this Agreement.
5. Further Assurances. The Stockholder will, from time to time, take such
actions and execute and deliver, or cause to be executed and delivered, such
additional or further transfers, assignments, endorsements, consents and other
instruments as Parent or Sub may reasonably request for the purpose of
effectively carrying out the transactions contemplated by this Agreement.
6. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns and, in the case of the Stockholder, the heirs, executors and
administrators of the Stockholder.
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7. Termination. Except as otherwise provided herein, this Agreement shall
terminate upon the earlier of (i) the Effective Time and (ii) a valid
termination of the Merger Agreement in accordance with its terms (the
"Termination Date").
8. General Provisions.
(a) Expenses. Except as otherwise expressly provided in the Merger
Agreement, each party hereto shall pay its own expenses incurred in
connection with this Agreement.
(b) 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 in any court of the
United States or any state thereof having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each party hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court for the District of Delaware 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.
(c) Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally, one day after
being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by
like notice):
(i) if to Parent or Sub, to:
Smith & Nephew, Inc.
160 Dascomb Road
Andover, Massachusetts 01810
Attention: Ron Sparks, President
Endoscopy Division
Facsimile No.: 978-749-1005
with a copy to:
Smith & Nephew, Inc.
1450 Brooks Road
Memphis, Tennessee 38116
Attention: General Counsel
Facsimile No.: 901-396-7824
and
Sidley Austin Brown & Wood
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
Attention: Pran Jha
Facsimile No.: 312-853-7036
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(ii) if to the Stockholder, to:
with a copy to:
(d) Parties in Interest. This Agreement shall inure to the benefit of
and be binding upon the parties named herein and their respective successors
and assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any Person other than Parent, Sub or the Stockholder, or their
permitted successors or assigns, any rights or remedies under or by reason
of this Agreement.
(e) Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only and
shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed manually or by
facsimile, in one or more counterparts, each of which, when executed, shall
be deemed to be an original and all of which together shall constitute one
and the same document.
(h) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by
this Agreement may be consummated as originally contemplated to the fullest
extent possible.
9. No Limitations on Actions of the Stockholder as a
Director. Notwithstanding anything to the contrary in this Agreement, nothing
in this Agreement is intended or shall be construed to limit or affect, or give
rise to any liability to, any Stockholder who is or becomes (prior to the
Termination Date) a director or officer of the Company by virtue of any actions
taken by Stockholder in his or her capacity as an officer or director of the
Company in exercising his or her rights or obligations under the Merger
Agreement or applicable law.
[Signature page to follow]
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IN WITNESS WHEREOF, each of Parent and Sub has caused this Agreement to be
signed by its officer thereunto duly authorized and the Stockholder has duly
signed this Agreement, all as of the date first written above.
SMITH & NEPHEW, INC.
By: _______________________________
Name:
Title:
ORCHID MERGER CORP.
By: _______________________________
Name:
Title:
STOCKHOLDER:
[Name]
By: _______________________________
Number of shares of Common Stock
owned by the Stockholder on the
date hereof: [Number of Shares]
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Schedule of Signatory Stockholders to Stockholder Agreement
Signatory Stockholder Shares of Common Stock
--------------------- ----------------------
Venrock Associates............ 686,409
Venrock Associates II, L.P.... 621,348
Patrick F. Latterell.......... 20,726
Jefferey A. Saal.............. 620,277
Kenneth W. Anstey............. 522,893
Hugh R. Sharkey............... 472,632
Nancy Wescott................. 141,631
Terry Mitchell................ 0
Richard M. Ferrari............ 77,016
Roger H. Lipton............... 63,364
Michael Hassman............... 22,130
Wayne R. Moon................. 0
---------
Total Shares............... 3,248,426
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