-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IBQGH83BC6CFcokQ7ZLpymYaTc4Y6uZ7uHipXfAZD1XaRr5PIxT7W9+gJov9DVoU 14d1gE0PhzgIY7w2rxiehg== 0000891618-99-000793.txt : 19990304 0000891618-99-000793.hdr.sgml : 19990304 ACCESSION NUMBER: 0000891618-99-000793 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990303 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SEEQ TECHNOLOGY INC CENTRAL INDEX KEY: 0000702756 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942711298 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-35865 FILM NUMBER: 99555861 BUSINESS ADDRESS: STREET 1: 47200 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5102267400 MAIL ADDRESS: STREET 1: 47200 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LSI LOGIC CORP CENTRAL INDEX KEY: 0000703360 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942712976 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D 106 CITY: MILPITAS STATE: CA ZIP: 95035 BUSINESS PHONE: 4084338000 MAIL ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D 106 CITY: MILPITAS STATE: CA ZIP: 95035 SC 13D 1 SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 SEEQ Technology Incorporated - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, Series B Preferred Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 815779-10-3 ----------- (CUSIP Number) DAVID E. SANDERS, VICE PRESIDENT, GENERAL COUNSEL ------------------------------------------------- LSI LOGIC CORPORATION --------------------- 1551 MCCARTHY BOULEVARD ----------------------- MILPITAS, CALIFORNIA 95035 -------------------------- (408) 433-8000 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) FEBRUARY 21, 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 that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-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 Section 240.13d-7(b) for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose 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). 2 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 2 OF 8 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LSI Logic Corporation I.R.S. Identification No.: 94-2712976 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [ ] N/A - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC, OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] N/A - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION STATE OF DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 64,183 shares of Series B Preferred Stock (1) ------------------------------------------------- NUMBER OF SHARES 8 SHARED VOTING POWER 658,803 shares of BENEFICIALLY Common Stock (2) OWNED BY ------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON 64,183 shares of Series B Preferred Stock (1) WITH ------------------------------------------------- 10 SHARED DISPOSITIVE POWER N/A - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 64,183 shares of SEEQ Series B Preferred Stock and 658,803 shares of SEEQ Common Stock (1) (2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 100% of the Series B Preferred Stock and 2.0% of the issued and outstanding SEEQ Common Stock (1) (2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! (1) In the event the Option (discussed in Items 3 and 4 below) becomes exercisable and is exercised in full LSI Logic Corporation ("LSI") will have sole voting power with respect to that number of shares of Series B Preferred Stock that represent 19.9% of the voting power of the issued and outstanding shares of capital stock of SEEQ Technology Incorporated ("SEEQ") as of the first date, if any, upon which the Option becomes exercisable, which, based upon the 32,252,752 shares of Common Stock of SEEQ outstanding as of February 21, 1999 (as represented by SEEQ in the Merger Agreement discussed in Items 3 and 4) currently equals 64,183 shares of Series B Preferred Stock. Each share of Series B Preferred Stock is entitled to 100 votes on all matters submitted to a vote of the stockholders of SEEQ. In certain circumstances each share of Series B Preferred Stock is convertible into 100 shares of SEEQ Common Stock. Prior to the exercise of the Option, LSI is not entitled to any rights as a stockholder of SEEQ as to the shares of Series B Preferred Stock covered by the Option. The Option may only be exercised upon the happening of certain events referred to in Item 4, none of which has occurred as of the date hereof. LSI expressly disclaims beneficial ownership of any of the shares of Series B Preferred Stock which are purchaseable by LSI upon exercise of the Option until such time as LSI purchases any such shares of Series B Preferred Stock upon any such exercise. (2) 658,803 shares of SEEQ Common Stock are subject to Voting Agreements entered into by LSI and certain stockholders of SEEQ (discussed in Items 3 and 4 below). LSI expressly disclaims beneficial ownership of any of the shares of SEEQ Common Stock covered by the Voting 3 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 3 OF 8 PAGES Agreements. Based on the number of shares of SEEQ Common Stock outstanding as of February 21, 1999 (as represented by SEEQ in the Merger Agreement discussed in Items 3 and 4), the number of shares of SEEQ Common Stock indicated represents approximately 2.0% of the outstanding SEEQ Common Stock, excluding the shares of outstanding shares of SEEQ Series B Preferred Stock issuable upon exercise of the Option. ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D (this "Statement") relates to the Common Stock and Series B Preferred Stock of SEEQ Technology Incorporated, a Delaware corporation ("SEEQ" or "Issuer"). The principal executive offices of SEEQ are located at 47200 Bayside Parkway, Fremont, California 94538. ITEM 2. IDENTITY AND BACKGROUND. The name of the corporation filing this statement is LSI Logic Corporation, a Delaware corporation ("LSI"). LSI is a leader in the design, development, manufacture and marketing of high performance application specific integrated circuits and application specific standard products. The address of LSI's principal business is 1551 McCarthy Boulevard, Milpitas, California 95035. The address of LSI's executive offices is the same as the address of its principal business. Set forth on Schedule A is the name of each of the directors and executive officers of LSI, and their present principal occupation or employment, including the name, principal business and address of any corporation or other organization in which such employment is conducted, as of the date hereof to LSI's knowledge. Neither LSI, nor to LSI's knowledge, any person named on Schedule A hereto is required to disclose legal proceedings pursuant to Items 2(d) or 2(e). To LSI's knowledge, each of the individuals identified on Schedule A is a citizen of the United States. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to an Agreement and Plan of Reorganization and Merger dated as of February 21, 1999 (the "Merger Agreement"), among LSI, Stealth Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of LSI ("Merger Sub") and SEEQ, and subject to the conditions set forth therein (including approval by stockholders of SEEQ), Merger Sub will merge with and into SEEQ and SEEQ will become a wholly-owned subsidiary of LSI (such events constituting the "Merger"). Once the Merger is consummated, Merger Sub will cease to exist as a corporation and all of the business, assets, liabilities and obligations of Merger Sub will be merged into SEEQ with SEEQ remaining as the surviving corporation (the "Surviving Corporation"). 4 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 4 OF 8 PAGES As an inducement to LSI to enter into the Merger Agreement, LSI and SEEQ entered into a Stock Option Agreement dated as of February 21, 1999 (the "Stock Option Agreement") pursuant to which SEEQ granted LSI the right (the "Option"), under certain conditions, to acquire up to the number of shares of Series B Preferred Stock sufficient to give LSI ownership of 19.9% of the voting power of SEEQ's issued and outstanding capital stock. SEEQ's obligation to issue shares pursuant to the exercise of the Option is subject to the occurrence of certain events (discussed in Item 4 below), which may not occur. Each share of Series B Preferred Stock entitles the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of SEEQ. Each share of Series B Preferred Stock is convertible in certain circumstances into 100 shares of SEEQ Common Stock. The granting of the Option was negotiated as a material term of the Merger transaction. LSI did not pay additional consideration to SEEQ in connection with SEEQ entering into the Stock Option Agreement and granting the Option. In the event the Option becomes exercisable, LSI anticipates it will use working capital for any exercise of the Option. As a further inducement for LSI to enter into the Merger Agreement and in consideration thereof, certain stockholders of SEEQ (the "Stockholders") entered into individual voting agreements with LSI (collectively, the "Voting Agreements") whereby each Stockholder agreed to vote all of the shares of SEEQ Common Stock beneficially owned by them in favor of approval and adoption of the Merger Agreement and approval of the Merger and certain related matters. LSI did not pay additional consideration to any Stockholder in connection with the execution and delivery of the Voting Agreements. References to, and descriptions of, the Merger, the Merger Agreement, the Stock Option Agreement and the Voting Agreements as set forth herein are qualified in their entirety by reference to the copies of the Merger Agreement, the Stock Option Agreement, and the Voting Agreements, respectively, included as Exhibits 1, 2 and 3, respectively, to this Schedule 13D, and are incorporated herein in their entirety where such references and descriptions appear. ITEM 4. PURPOSE OF TRANSACTION. (a) - (b) As described in Item 3 above, this statement relates to the Merger of Merger Sub, a wholly-owned subsidiary of LSI, with and into SEEQ in a statutory merger pursuant to the Delaware General Corporation Law. At the effective time of the Merger, the separate existence of Merger Sub will cease and SEEQ will continue as the Surviving Corporation and as a wholly-owned subsidiary of LSI. Each holder of outstanding SEEQ Common Stock will receive, in exchange for each share of SEEQ Common Stock held by such holder, 0.1095 shares of LSI Common Stock subject to adjustment as set forth in Section 1.6(a) of the Merger Agreement. LSI will assume each outstanding option to purchase SEEQ Common Stock under SEEQ's stock option plans. 5 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 5 OF 8 PAGES Pursuant to the Stock Option Agreement SEEQ granted LSI the Option to acquire up to the number of shares of SEEQ Series B Preferred Stock sufficient to give LSI ownership of 19.9% of the voting power of SEEQ's issued and outstanding capital stock under certain conditions. SEEQ's obligation to issue shares pursuant to the exercise of the Stock Option is subject to the occurrence of certain events (each, an "Exercise Event"), which may not occur. In general, an Exercise Event may be deemed to occur (a) if the Merger Agreement is terminated by LSI if (i) the Board of Directors of SEEQ or any committee thereof shall for any reason have withdrawn or shall have amended or modified in a manner adverse to LSI its unanimous recommendation in favor of, the adoption and approval of the Merger Agreement or the approval of the Merger; (ii) SEEQ shall have failed to include in the Prospectus/Proxy Statement the unanimous recommendation of the Board of Directors of SEEQ in favor of the adoption and approval of the Merger Agreement and the approval of the Merger; (iii) the Board of Directors of SEEQ fails to reaffirm its unanimous recommendation in favor of the adoption and approval of the Merger Agreement and the approval of the Merger within five (5) business days after LSI requests in writing that such recommendation be reaffirmed at any time following the announcement of an Acquisition Proposal (as defined in Section 5.4(a) of the Merger Agreement); (iv) the Board of Directors of SEEQ or any committee thereof shall have approved or recommended any Acquisition Proposal; (v) SEEQ shall have entered into any letter of intent or similar document or any agreement, contract or commitment accepting any Acquisition Proposal; or (vi) a tender or exchange offer relating to securities of SEEQ shall have been commenced by a Person (as defined in Section 8.3(d) of the Merger Agreement) unaffiliated with LSI and SEEQ shall not have sent to its security holders within ten business days after such tender or exchange offer is first published, sent or given, a statement disclosing that SEEQ recommends rejection of such tender or exchange offer; or (b) if the Merger Agreement is terminated by either LSI or SEEQ because the Merger shall not have been consummated by August 27, 1999, or because the SEEQ stockholders fail to approve the Merger Agreement and the Merger, and prior to the date of termination of the Merger Agreement a third party has announced an Acquisition Proposal and (i) within nine months following the termination of the Merger Agreement acquisition of SEEQ is consummated or SEEQ enters into an agreement or letter of intent providing for such an acquisition, or (ii) immediately prior to the closing of a tender of exchange offer for a Company Acquisition (as defined in Section 7.3(b)(iii) of the Merger Agreement). Pursuant to the Voting Agreements, the Stockholders have irrevocably appointed LSI as their lawful attorney and proxy. Such proxy gives LSI the limited right to vote each of the 658,803 shares (including options exercisable within 60 days of February 21, 1999) of SEEQ Common Stock beneficially owned by the Stockholders in all matters related to the Merger. In exercising its right to vote the Shares as lawful attorney and proxy of the Stockholders, LSI (or any nominee of LSI) will be limited, at every SEEQ stockholders meeting and every written consent in lieu of such a meeting to vote the Shares in favor of 6 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 6 OF 8 PAGES approval and adoption of the Merger Agreement, in favor of approval of the Merger and in favor of each matter that could reasonably be expected to facilitate the Merger. The Stockholders may vote the Shares on all other matters. The Voting Agreements terminate upon the earlier to occur of (i) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement, and (ii) such date and time as the Merger Agreement shall have been terminated pursuant to Article VII thereof. The purpose of the transactions under the Stock Option Agreement and the Voting Agreements is to enable LSI and SEEQ to consummate the transactions contemplated under the Merger Agreement. (c) Not applicable. (d) It is anticipated that upon consummation of the Merger, the directors of the Surviving Corporation shall be the current directors of Merger Sub. It is anticipated that the initial officers of the Surviving Corporation shall be the current officers of Merger Sub. (e) Other than as a result of the Merger, not applicable. (f) Other than as a result of the Merger, not applicable. (g) Upon consummation of the Merger, the Certificate of Incorporation of Merger Sub, as in effect immediately prior to the Merger, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by Delaware Law and such Certificate of Incorporation. Upon consummation of the Merger, the Bylaws of Merger Sub, as in effect immediately prior to the Merger, shall be the Bylaws of the Surviving Corporation until thereafter amended. (h) - (i) If the Merger is consummated as planned, the SEEQ Common Stock will be deregistered under the Act and delisted from The Nasdaq National Market. (j) Other than described above, LSI currently has no plan or proposals which relate to, or may result in, any of the matters listed in Items 4(a) - (i) of Schedule 13D (although LSI reserves the right to develop such plans). References to, and descriptions of, the Merger, the Merger Agreement, the Stock Option Agreement and the Voting Agreements as set forth above in this Item 4 are qualified in their entirety by reference to the Merger Agreement, the Stock Option Agreement and the form of Voting Agreement, included as Exhibits 1, 2 and 3, respectively, to this Schedule 13D, and are incorporated in this Item 4 in their entirety where such references and descriptions appear. 7 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 7 OF 8 PAGES ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) - (b) As a result of the Voting Agreements, LSI may be deemed to be the beneficial owner of at least 658,803 shares of SEEQ Common Stock. Such SEEQ Common Stock constitutes approximately 2.0% of the issued and outstanding shares of SEEQ Common Stock based on the number of shares of SEEQ Common Stock outstanding as of February 21, 1999 (as represented by SEEQ in the Merger Agreement discussed in Items 3 and 4). LSI may be deemed to have the shared power to vote the Shares with respect to those matters described above. However, LSI (i) is not entitled to any rights as a stockholder of SEEQ as to the Shares and (ii) disclaims any beneficial ownership of the shares of SEEQ Common Stock which are covered by the Voting Agreements. In the event the Option becomes exercisable and is exercised in full, LSI will have the sole power to vote, and the sole power to dispose of, that number of shares equal to 19.9% of the voting power of the then issued and outstanding shares of Series B Preferred Stock, which, based upon the 32,252,752 shares of SEEQ Common Stock outstanding as of February 21, 1999 (as represented by SEEQ in the Merger Agreement), currently equals 64,183 shares of Series B Preferred Stock. John J. D'Errico, an executive officer of LSI, owns 6,000 shares of SEEQ Common Stock. To LSI's knowledge, no other person listed on Schedule A has an ownership interest in SEEQ. Set forth on Schedule B is the name of those stockholders of SEEQ that have entered into a Voting Agreement with LSI, and their present principal occupation or employment, including the name, principal business and address of any corporation or other organization in which such employment is conducted, to LSI's knowledge. (c) To LSI's knowledge, no transactions in the class of securities reported have been effected during the past sixty days by any person named pursuant to Item 2. (d) To LSI's knowledge, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities of SEEQ reported on herein. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Other than the Merger Agreement and the exhibits thereto, including the Stock Option Agreement and the Votings Agreements, to the knowledge of LSI, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 and 8 SCHEDULE 13D CUSIP NO. 815779-10-3 PAGE 8 OF 8 PAGES between such persons and any person with respect to any securities of SEEQ, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangement, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. The following documents are filed as exhibits: 1. Agreement and Plan of Reorganization and Merger, dated February 21, 1999 by and among LSI, Merger Sub and SEEQ. (Incorporated by reference to exhibits to the Report on Form 8-K filed by LSI Logic Corporation on February 23, 1999 (File No. 99548125).) 2. Stock Option Agreement dated February 21, 1999 by and between LSI and SEEQ. 3. Form of Voting Agreement by and between LSI and the persons listed on Schedule B to this Schedule 13D. 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. Dated: March 3, 1999 LSI LOGIC CORPORATION By: /s/ David E. Sanders ------------------------------------ David E. Sanders Vice President, General Counsel and Secretary 9 Schedule A DIRECTORS AND EXECUTIVE OFFICERS OF LSI LOGIC CORPORATION The following table sets forth the name, business address and present principal occupation or employment of each director and executive officer of LSI. Except as indicated below, the business address of each such person is 1551 McCarthy Boulevard, Milpitas, CA 95035.
Name and Title Present Principal Occupation - -------------- ---------------------------- Wilfred J. Corrigan Chairman of the Board of Directors Chairman of the Board of Directors and Chief Executive Officer of LSI and Chief Executive Officer Elias J. Antoun Executive Vice President, Consumer Products of Executive Vice President, Consumer Products LSI John P. Daane Executive Vice President, Communications, Executive Vice President, Communications, Computer and ASIC Products of LSI Computer and ASIC Products John J. D'Errico Executive Vice President, Storage Components Executive Vice President, Storage Components and Colorado Operations of LSI and Colorado Operations Thomas Georgens Senior Vice President and General Manager, Senior Vice President and General Manager, Storage Systems Division of LSI Storage Systems Division W. Richard Marz Executive Vice President, Geographic Markets of Executive Vice President, Geographic Markets LSI R. Douglas Norby Executive Vice President Executive Vice President and Chief Financial and Chief Financial Officer of LSI Officer David E. Sanders Vice President, General Counsel and Secretary of Vice President, General Counsel and Secretary LSI Lewis C. Wallbridge Vice President, Human Resources of LSI Vice President, Human Resources Joseph M. Zelayeta Executive Vice President, Worldwide Operations Executive Vice President, Worldwide Operations of LSI T.Z. Chu Retired President of Hoefer Pharmacia Biotech, Director Inc. Malcolm R. Currie Chief Executive Officer, Currie Technologies, Director Inc.; Chairman Emeritus, Hughes Aircraft, Inc. James H. Keyes Chairman and Chief Executive Officer of Director Johnson Controls, Inc.
10 Schedule B SEEQ TECHNOLOGY INCORPORATED VOTING AGREEMENT STOCKHOLDERS The following table sets forth the name and present principal occupation or employment of each SEEQ stockholder that entered into a voting agreement with LSI. Except as indicated below, the business address of each such person is 47200 Bayside Parkway, Fremont, CA 94538.
Voting Agreement Stockholder Shares Beneficially Owned - ---------------------------- ------------------------- Gary R. Fish(a) 12,620 Vice President, Finance and Administration, Chief Financial Officer and Secretary of SEEQ Christopher E. Mann 100 Vice President, Design Engineering of SEEQ Phillip J. Salsbury (b) 363,208 Chief Executive Officer and Director of SEEQ James D. Middleton 3,375 Vice President, Manufacturing Operations of SEEQ Alan V. Gregory (c) 248,500 Chairman of the Board of Directors of SEEQ Charles Giancarlo (d) 20,000 Director of SEEQ Robert C. Frostholm 11,000 Vice President, Sales and Marketing of SEEQ Total: 658,803
(a) Represents 2,000 shares of outstanding SEEQ Common Stock and 10,620 shares subject to options exercisable within 60 days of February 21, 1999. (b) Represents 28,000 shares of outstanding SEEQ Common Stock and 335,208 shares subject to options exercisable within 60 days of February 21, 1999. (c) Represents 138,500 shares of outstanding SEEQ Common Stock and 110,000 shares subject to options exercisable within 60 days of February 21, 1999. (d) Represents 20,000 shares subject to options exercisable within 60 days of February 21, 1999. EX-2 2 STOCK OPTION AGREEMENT 1 Exhibit 2 STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as of February 21, 1999, among LSI Logic Corporation, a Delaware corporation ("Parent"), and SEEQ Technology Incorporated, a Delaware corporation (the "Company"). Capitalized terms used but not otherwise defined herein will have the meanings ascribed to them in the Reorganization Agreement (as defined below). RECITALS A. The Company, Merger Sub (as defined below) and Parent have entered into an Agreement and Plan of Reorganization and Merger (the "Reorganization Agreement") which provides for the merger (the "Merger") of a wholly-owned subsidiary of Parent ("Merger Sub") with and into the Company. Pursuant to the Merger, all outstanding capital stock of the Company will be converted into the right to receive Common Stock of Parent. B. As a condition to Parent's willingness to enter into the Reorganization Agreement, Parent has requested that Company agree, and Company has so agreed, to grant to Parent an option to acquire shares of Company's Series B Preferred Stock, par value $0.01 per share (the "Company Preferred Shares"), upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein and in the Reorganization Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Grant of Option. The Company hereby grants to Parent an irrevocable option (the "Option") to acquire up to a number of Company Preferred Shares (the "Option Shares") that represent 19.9% of the voting power of the issued and outstanding shares of Company's capital stock (and that, if converted into shares of Company Common Stock, par value $0.01 per share ("Company Common Stock"), in accordance with its terms would equal 19.9% of the issued and outstanding Company Common Stock) as of the first date, if any, upon which an Exercise Event (as defined in Section 2(a) below) will occur, in the manner set forth below (i) by paying cash at a price of $300 per share (the "Exercise Price") and/or, at Parent's election, (ii) by exchanging therefor shares of the Common Stock, $0.01 par value, of Parent ("Parent Shares") at a rate (the "Exercise Ratio"), for each Option Share, of a number of Parent Shares equal to the Exercise Price divided by the closing sale price of Parent Shares on the New York 2 Stock Exchange for the trading day immediately preceding the date of the Closing (as defined below) of the particular Option exercise. 2. Exercise of Option; Maximum Proceeds. (a) The Option may be exercised by Parent, in whole or in part, at any time or from time to time, (i) upon termination of the Reorganization Agreement pursuant to Section 7.1(e) thereof, or (ii) if the Reorganization Agreement is terminated pursuant to Section 7.1(b) or 7.1(d) thereof upon the earlier of (x) the occurrence of an event causing the Termination Fee to become payable pursuant to Section 7.3(b)(ii) of the Reorganization Agreement or (y) immediately prior to the consummation of a tender or exchange offer for a Company Acquisition (any of the events specified in clauses (i) or (ii), of this sentence being referred to herein as an "Exercise Event"). In the event Parent wishes to exercise the Option, Parent will deliver to the Company a written notice (each an "Exercise Notice") specifying the total number of Option Shares it wishes to acquire and the form of consideration to be paid. Each closing of a purchase of Option Shares (a "Closing") will occur on a date and at a time prior to the termination of the Option designated by Parent in an Exercise Notice delivered at least two business days prior to the date of such Closing, which Closing will be held at the principal offices of the Company. (b) The Option will terminate upon the earliest of (i) the Effective Time, (ii) nine (9) months following the date on which the Reorganization Agreement is terminated pursuant to Section 7.1(b) or 7.1(d) thereof, if no event causing the Termination Fee to become payable pursuant to Section 7.3(b)(ii) of the Reorganization Agreement has occurred, (iii)12 months following the date on which the Reorganization Agreement is terminated pursuant to Section 7.1(e) thereof, (iv) in the event the Reorganization Agreement has been terminated pursuant to Section 7.1(b) or 7.1(d) thereof and the Termination Fee became payable pursuant to Section 7.3(b)(ii) thereof, 12 months after payment of the Termination Fee; and (v) the date on which the Reorganization Agreement is terminated if neither a Triggering Event nor the announcement of an Acquisition Proposal by a third party will have occurred on or prior to the date of such termination; provided, however, that if the Option cannot be exercised by reason of any applicable government order or because the waiting period related to the issuance of the Option Shares under the HSR Act will not have expired or been terminated, then the Option will not terminate until the tenth business day after such impediment to exercise will have been removed or will have become final and not subject to appeal. (c) If Parent receives in the aggregate pursuant to Section 7.3(b) of the Reorganization Agreement together with proceeds in connection with any sales or other dispositions of Option Shares and any dividends received by Parent declared on Option Shares, more than the sum of (x) $2,000,000 plus (y) the Exercise Price multiplied by the number of Company Preferred Shares purchased by Parent pursuant to the Option, then all proceeds to Parent in excess of such sum will be remitted by Parent to Company. 3 3. Conditions to Closing. The obligation of Company to issue Option Shares to Parent hereunder is subject to the conditions that (a) any waiting period under the HSR Act applicable to the issuance of the Option Shares hereunder will have expired or been terminated; (b) all material consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Federal, state or local administrative agency or commission or other Federal state or local governmental authority or instrumentality, if any, required in connection with the issuance of the Option Shares hereunder will have been obtained or made, as the case may be; and (c) no preliminary or permanent injunction or other order by any court of competent jurisdiction prohibiting or otherwise restraining such issuance will be in effect. It is understood and agreed that at any time during which the Option is exercisable, the parties will use their respective best efforts to satisfy all conditions to Closing, so that a Closing may take place as promptly as practicable. 4. Closing. At any Closing, (a) the Company will deliver to Parent a single certificate in definitive form representing the number of Option Shares designated by Parent in its Exercise Notice, such certificate to be registered in the name of Parent and to bear the legend set forth in Section 9 hereof, against delivery of (b) payment by Parent to the Company of the aggregate purchase price for the Option Shares so designated and being purchased by delivery of (i) a certified check or bank check and/or, at Parent's election, (ii) a single certificate in definitive form representing the number of Parent Shares being issued by Parent in consideration therefor (based on the Exercise Ratio), such certificate to be registered in the name of the Company and to bear the legend set forth in Section 9 hereof. 5. Representations and Warranties of the Company. Company represents and warrants to Parent that (a) Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (b) the execution and delivery of this Agreement by the Company and consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or any of the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company and, assuming this Agreement constitutes a legal, valid and binding obligation of Parent, is enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy and other laws affecting the rights and remedies of creditors generally and general principles of equity; (d) except for any filings required under the HSR Act, the Company has taken all necessary corporate and other action to authorize and reserve for issuance and to permit it to issue upon exercise of the Option, and at all times from the date hereof until the termination of the Option will have reserved for issuance, a sufficient number of unissued Company Preferred Shares for Parent to exercise the Option in full and will take all necessary corporate or other action to authorize and reserve for issuance all additional Company Preferred Shares, Company -3- 4 Common Stock issuable upon conversion of such Company Preferred Shares or other securities which may be issuable pursuant to Section 8(a) upon exercise of the Option, all of which, upon their issuance and delivery in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable; (e) upon delivery of the Company Preferred Shares and any other securities to Parent upon exercise of the Option, Parent will acquire such Company Preferred Shares or other securities free and clear of all material claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever, excluding those imposed by Parent; (f) the designations, powers, preferences, rights, qualifications, limitations and restrictions in respect of the Company Preferred Shares are as set forth in the Certificate of Designation attached hereto as Annex 1 (the "Certificate of Designations"); (g) the execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, (i) conflict with or violate the Certificate of Incorporation or Bylaws or equivalent organizational documents of the Company or any of its subsidiaries, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company or any of its subsidiaries or by which its or any of their respective properties is bound or affected or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or impair the Company's or any of its subsidiaries' rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Company or any of its subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or its or any of their respective properties are bound or affected; (h) the execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with, or notification to, any Governmental Entity except pursuant to the HSR Act; and (i) any Parent Shares acquired pursuant to this Agreement will not be acquired by the Company with a view to the public distribution thereof and the Company will not sell or otherwise dispose of such shares in violation of applicable law or this Agreement. 6. Certain Rights. (a) Parent Put. At the request of and upon notice by Parent (the "Put Notice"), at any time during the period during which the Option is exercisable pursuant to Section 2 (the "Purchase Period"), the Company (or any successor entity thereof) will purchase from Parent (in each case as limited by subparagraph (iii) below): (1) the Option, to the extent not previously exercised, at the price set forth in subparagraph (i) below; and (2) the Option Shares, if any, acquired by Parent pursuant thereto, at the price set forth in subparagraph (ii) below: (i) The difference between the "Market/Tender Offer Price" for the Company Common Stock as of the date Parent gives notice of its intent to -4- 5 exercise its rights under this Section 6(a) (defined as the higher of (A) the highest price per share of Company Common Stock offered as of such date pursuant to any Acquisition Proposal which was made prior to such date and (B) the highest closing sale price of one share of Company Common Stock on the Nasdaq National Market during the 20 trading days ending on the trading day immediately preceding such date) and the Equivalent Exercise Price (as defined below), multiplied by the product of the number of Company Preferred Shares purchasable pursuant to the Option multiplied by one hundred, but only if the Market/Tender Offer Price is greater than the Equivalent Exercise Price (as defined below). For purposes of this Agreement, "Equivalent Exercise Price" will mean the price determined by dividing the Exercise Price by one hundred. For purposes of determining the highest price offered pursuant to any Acquisition Proposal which involves consideration other than cash, the value of such consideration will be equal to the higher of (x) if securities of the same class of the proponent as such consideration are traded on any national securities exchange or by any registered securities association, a value based on the closing sale price or asked price for such securities on their principal trading market on such date and (y) the value ascribed to such consideration by the proponent of such Acquisition Proposal, or if no such value is ascribed, a value determined in good faith by the Board of Directors of the Company. (ii) (x) The Exercise Price paid by Parent for the Company Preferred Shares acquired pursuant to this Option plus (y) (1) the difference between the Market/Tender Offer Price and the Equivalent Exercise Price (but only if the Market/Tender Offer Price is greater than the Equivalent Exercise Price), multiplied by (2) one hundred, multiplied by (3) the number of Company Preferred Shares so purchased. If Parent issued Parent Shares in connection with any exercise of the Option, the Exercise Price and the Equivalent Exercise Price each will be calculated as set forth in the last sentence of Section 4 as if Parent had exercised its right to pay cash instead of issuing Parent Shares. (iii) Notwithstanding subparagraphs (i) and (ii) above, pursuant to this Section 6 Company will not be required to pay Parent in excess of an aggregate of (x) $2,000,000 plus (y) the Exercise Price paid by Parent for Company Preferred Shares acquired pursuant to the Option minus (z) any amounts paid to Parent by the Company pursuant to Section 7.3(b) of the Reorganization Agreement. (b) Redelivery of Parent Shares. If Parent has acquired Option Shares pursuant to exercise of the Option by the issuance and delivery of Parent Shares, then Company will, if so requested by Parent, in fulfillment of its obligation pursuant to the first clause of Section 6(a)(ii) with respect to the Exercise Price paid in the form of Parent Shares only, redeliver the certificate(s) for such Parent Shares to Parent, free and clear of all claims, -5- 6 liens, charges, encumbrances and security interests of any kind or nature whatsoever, other than those imposed by Parent. (c) Payment and Redelivery of Option or Shares. In the event Parent exercises its rights under Sections 6(a) or (b), the Company will, within ten business days after Parent delivers notice pursuant to Section 6(a), pay the required amount to Parent in immediately available funds (and Parent Shares, if applicable) and Parent will surrender to the Company the Option and the certificates evidencing the Option Shares purchased by Parent pursuant thereto, and Parent will represent and warrant that such shares are then free and clear of all claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever, other than those imposed by the Company. (d) Restrictions on Transfer. Until the expiration of the Purchase Period, the Company will not sell, transfer or otherwise dispose of any Parent Shares acquired by it pursuant to this Agreement. 7. Registration Rights -6- 7 (a) Following the termination of the Reorganization Agreement, Parent (sometimes referred to herein as the "Holder") may by written notice (a "Registration Notice") to the Company (the "Registrant") request the Registrant to register under the Securities Act all or any part of the shares acquired by the Holder pursuant to this Agreement (such shares requested to be registered, the "Registrable Securities") in order to permit the sale or other disposition of such shares pursuant to a bona fide firm commitment underwritten public offering in which the Holder and the underwriters will effect as wide a distribution of such Registrable Securities as is reasonably practicable and will use reasonable efforts to prevent any person or group from purchasing through such offering shares representing more than 2% of the voting power of or 2% of the outstanding shares of Common Stock of the Registrant on a fully diluted basis (a "Permitted Offering"); provided, however, that any such Registration Notice must relate to a number of shares equal to at least 2% of the voting power of or 2% of the outstanding shares of Common Stock of the Registrant on a fully diluted basis and that any rights to require registration hereunder will terminate with respect to any shares that may be sold pursuant to Rule 144(k) under the Securities Act. The Registration Notice will include a certificate executed by the Holder and its proposed managing underwriter, which underwriter will be an investment banking firm of nationally recognized standing (the "Manager"), stating that (i) the Holder and the Manager have a good faith intention to commence a Permitted Offering and (ii) the Manager in good faith believes that, based on the then prevailing market conditions, it will be able to sell the Registrable Securities at a per share price equal to at least 80% of the per share average of the closing sale prices of the Registrant's Common Stock on the Nasdaq National Market for the twenty trading days immediately preceding the date of the Registration Notice. The Registrant will thereupon have the option exercisable by written notice delivered to the Holder within ten business days after the receipt of the Registration Notice, irrevocably to agree to purchase all or any part of the Registrable Securities for cash at a price (the "Option Price") equal to the product of (i) the number of Registrable Securities so purchased and (ii) (x) if such Registrable Securities are Company Common Stock the per share average of the closing sale prices of the Registrant's Common Stock on the Nasdaq National Market for the twenty trading days immediately preceding the date of the Registration Notice and (y) if such shares are Company Series B Preferred Stock at a price equal to one hundred multiplied by the price obtained in subsection (x). Any such purchase of Registrable Securities by the Registrant hereunder will take place at a closing to be held at the principle executive offices of the Registrant or its counsel at any reasonable date and time designated by the Registrant in such notice within ten business days after delivery of such notice. The payment for the shares to be purchased will be made by delivery at the time of such closing of the Option Price in immediately available funds. (b) If the Registrant does not elect to exercise its option to purchase pursuant to Section 7(a) with respect to all Registrable Securities, the Registrant will use all reasonable efforts to effect, as promptly as practicable, the registration under the Securities Act and the listing on the exchange or market where the Company's Common Stock is then trading of the unpurchased Registrable Securities requested to be registered in the Registration Notice; provided, however, that (i) the Holder will not be entitled to more than an aggregate of four -7- 8 effective registration statements hereunder and (ii) the Registrant will not be required to file any such registration statement during any period of time (not to exceed 40 days after a Registration Notice in the case of clause (A) below or 90 days after a Registration Notice in the case of clauses (B) and (C) below) when (A) the Registrant is in possession of material non-public information which it reasonably believes would be detrimental to be disclosed at such time and, in the opinion of counsel to such Registrant, such information would have to be disclosed if a registration statement were filed at that time; (B) the Registrant is required under the Securities Act to include audited financial statements for any period in such registration statement and such financial statements are not yet available for inclusion in such registration statement; or (C) such Registrant determines, in its reasonable judgment, that such registration would interfere with any financing, acquisition or other material transaction involving the Registrant. If consummation of the sale of any Registrable Securities pursuant to a registration hereunder does not occur within 180 days after the filing with the SEC of the initial registration statement therefor, the provisions of this Section 7 will again be applicable to any proposed registration. The Registrant will use all reasonable efforts to cause any Registrable Securities registered pursuant to this Section 7 to be qualified for sale under the securities or blue sky laws of such jurisdictions as the Holder may reasonably request and will continue such registration or qualification in effect in such jurisdictions; provided, however, that the Registrant will not be required to qualify to do business in, or consent to general service of process in, any jurisdiction by reason of this provision. (c) The registration rights set forth in this Section 7 are subject to the condition that the Holder will provide the Registrant with such information with respect to the Holder's Registrable Securities, the plan for distribution thereof, and such other information with respect to the Holder as, in the reasonable judgment of counsel for the Registrant, is necessary to enable the Registrant to include in a registration statement all material facts required to be disclosed with respect to a registration thereunder. (d) A registration effected under this Section 7 will be effected at the Registrant's expense, except for underwriting discounts and commissions and the fees and expenses of counsel to the Holder, and the Registrant will provide to the underwriters such documentation (including certificates, opinions of counsel and "comfort" letters from auditors) as are customary in connection with underwritten public offerings and as such underwriters may reasonably require. In connection with any registration, the Holder and the Registrant agree to enter into an underwriting agreement reasonably acceptable to each such party, in form and substance customary for transactions of this type with the underwriters participating in such offering. (e) Indemnification. (i) The Registrant will indemnify the Holder, each of its directors and officers and each person who controls the Holder within the meaning of Section 15 of the Securities Act, and each underwriter of the Registrant's securities, with respect to any -8- 9 registration, qualification or compliance which has been effected pursuant to this Agreement, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Registrant of any rule or regulation promulgated under the Securities Act applicable to the Registrant in connection with any such registration, qualification or compliance, and the Registrant will reimburse the Holder and, each of its directors and officers and each person who controls the Holder within the meaning of Section 15 of the Securities Act, and each underwriter for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided, that the Registrant will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Registrant by such Holder or director or officer or controlling person or underwriter seeking indemnification. (ii) The Holder will indemnify the Registrant, each of its directors and officers and each underwriter of the Registrant's securities covered by such registration statement and each person who controls the Registrant within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of any rule or regulation promulgated under the Securities Act applicable to the Holder in connection with any such registration, qualification or compliance, and will reimburse the Registrant, such directors, officers or control persons or underwriters for any legal or any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Registrant by the Holder for use therein; provided, that in no event will any indemnity under this Section 7(e) exceed the net proceeds of the offering received by the Holder. (iii) Each party entitled to indemnification under this Section 7(e) (the "Indemnified Party") will give notice to the party required to provide indemnification (the -9- 10 "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and will permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided, that counsel for the Indemnifying Party, who will conduct the defense of such claim or litigation, will be approved by the Indemnified Party (whose approval will not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, however, that the Indemnifying Party will pay such expense if representation of the Indemnified Party by counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding, and provided further, however, that the failure of any Indemnified Party to give notice as provided herein will not relieve the Indemnifying Party of its obligations under this Section 7(e) unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. No Indemnifying Party, in the defense of any such claim or litigation will, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. No Indemnifying Party will be required to indemnify any Indemnified Party with respect to any settlement entered into without such Indemnifying Party's prior consent (which will not be unreasonably withheld). 8. Adjustment Upon Changes in Capitalization; Rights Plans. (a) In the event of any change in the Company Preferred Shares by reason of stock dividends, stock splits, reverse stock splits, mergers (other than the Merger), recapitalizations, combinations, exchanges of shares and the like (including without limitation any conversion of the Company Preferred Shares into shares of Company Common Stock), the type and number of shares or securities subject to the Option, the Exercise Ratio, the Exercise Price and the other numbers herein requiring adjustment will be adjusted appropriately, and proper provision will be made in the agreements governing such transaction so that Parent will receive, upon exercise of the Option, the number and class of shares or other securities or property that Parent would have received in respect of the Company Preferred Shares if the Option had been exercised immediately prior to such event or the record date therefor, as applicable. (b) At any time during which the Option is exercisable, and at any time after the Option is exercised (in whole or in part, if at all), the Company will not amend (nor permit the amendment of) the Company Rights Plan nor adopt (nor permit the adoption of) a new stockholders rights plan, that contains provisions for the distribution or exercise of rights thereunder as a result of Parent or any affiliate or transferee being the beneficial owner of shares of the Company by virtue of the Option being exercisable or having been exercised (or as a result of beneficially owning shares issuable in respect of any Option Shares). -10- 11 9. Restrictive Legends. Each certificate representing Option Shares issued to Parent hereunder, and each certificate representing Parent Shares delivered to the Company at a Closing, will include a legend in substantially the following form: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 21, 1999, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER. 10. Listing and HSR Filing. The Company, upon the request of Parent, will promptly file an application to list the Option Shares to be acquired upon exercise of the Option for quotation on the Nasdaq National Market and will use its best efforts to obtain approval of such listing as soon as practicable. Parent, upon the request of the Company, will promptly file an application to list the Parent Shares issued and delivered to the Company pursuant to Section 4 on the New York Stock Exchange and will use its best efforts to obtain approval of such listing as soon as practicable. Promptly after the date hereof, each of the parties hereto will promptly file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice all required premerger notification and report forms and other documents and exhibits required to be filed under the HSR Act to permit the acquisition of the Option Shares subject to the Option at the earliest possible date. 11. Binding Effect. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights or remedies of any nature whatsoever by reason of this Agreement. Any shares sold by a party in compliance with the provisions of Section 7 will, upon consummation of such sale, be free of the restrictions imposed with respect to such shares by this Agreement and any transferee of such shares will not be entitled to the rights of such party. Certificates representing shares sold in a registered public offering pursuant to Section 7 will not be required to bear the legend set forth in Section 9. 12. Specific Performance. The parties hereto recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, each party hereto agrees that in addition to other remedies the other party hereto will be entitled to an injunction restraining any violation or threatened violation of the provisions of this Agreement or the right to enforce any of the covenants or agreements set forth herein by specific -11- 12 performance. In the event that any action will be brought in equity to enforce the provisions of the Agreement, neither party hereto will allege, and each party hereto hereby waives the defense, that there is an adequate remedy at law. 13. Entire Agreement. This Agreement and the Reorganization Agreement (including the appendices thereto) constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof. 14. Further Assurances. Each party hereto will execute and deliver all such further documents and instruments and take all such further action as may be necessary in order to consummate the transactions contemplated hereby. 15. Validity. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of the other provisions of this Agreement, which will remain in full force and effect. In the event any Governmental Entity of competent jurisdiction holds any provision of this Agreement to be null, void or unenforceable, the parties hereto will negotiate in good faith and will execute and deliver an amendment to this Agreement in order, as nearly as possible, to effectuate, to the extent permitted by law, the intent of the parties hereto with respect to such provision. 16. Notices. All notices and other communications hereunder will be in writing and will be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as will be specified by like notice): (1) if to Parent, to: LSI Logic Corporation 1551 McCarthy Boulevard Milpitas, California 95035 Attention: Vice President and General Counsel Telephone No.: (408) 433-7189 Telecopy No.: (408) 433-6896 with a copy to: Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304-1050 Attention: Larry W. Sonsini, Esq. Daniel R. Mitz, Esq. -12- 13 Telephone No.: (650) 493-9300 Telecopy No.: (650) 493-6811 (2) if to the Company, to: SEEQ Technology Incorporated 47200 Bayside Parkway Fremont, California 94538 Attention: President Telephone No.: (510) 226-2900 Telecopy No.: (510) 657-2837 with a copy to: Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP 155 Constitution Drive Menlo Park, California 94025 Attention: Jay K. Hachigian, Esq. Telephone No.: (650) 321-2400 Telecopy No.: (650) 321-2800 17. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed entirely within such State. 18. Expenses. Except as otherwise expressly provided herein or in the Reorganization Agreement, all costs and expenses incurred in connection with the transactions contemplated by this Agreement will be paid by the party incurring such expenses. 19. Amendments; Waiver. This Agreement may be amended by the parties hereto and the terms and conditions hereof may be waived only by an instrument in writing signed on behalf of each of the parties hereto, or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance. 20. Assignment. Neither of the parties hereto may sell, transfer, assign or otherwise dispose of any of its rights or obligations under this Agreement or the Option created hereunder to any other person, without the express written consent of the other party, except that the rights and obligations hereunder will inure to the benefit of and be binding upon any successor of a party hereto. -13- 14 21. Counterparts. This Agreement may be executed in counterparts, each of which will be deemed to be an original, but both of which, taken together, will constitute one and the same instrument. 22. Company Covenant. Promptly upon the request of Parent, Company will take all action necessary in accordance with Delaware Law and its Certificate of Incorporation and Bylaws to convene a meeting of its stockholders to be held as promptly as practicable after the date of such request, for the purpose of considering a proposal to increase the authorized capital stock of the Company sufficient to allow the Company to reserve for issuance a sufficient number of shares of its Common Stock to permit the conversion in full of the Company Preferred Shares into Common Stock as provided for in the Certificate of Designations. The Board of Directors of the Company will recommend that the stockholders of the Company vote in favor of such proposal. Until the earlier of such time as Parent has fully exercised this Option or the termination of this Option in accordance with its terms, Company will not amend the Certificate of Designations without the prior written consent of Parent. 23. Parent Covenant. Parent hereby covenants and agrees that at any meeting of stockholders held to consider a proposal to increase the authorized capital stock of the Company (or any written consent solicited therefor), Parent will vote all of the Company's shares held by it in favor of such proposal if the Company's board of directors recommends that stockholders vote in favor of such proposal. -14- 15 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written. LSI LOGIC CORPORATION By: /s/ John P. Daane ---------------------------------------- Name: John P. Daane -------------------------------------- Title: Executive Vice President ------------------------------------ SEEQ TECHNOLOGY INCORPORATED By: /s/ Phillip J. Salsbury ---------------------------------------- Name: Phillip J. Salsbury -------------------------------------- Title: President and Chief Executive Officer ------------------------------------- [SIGNATURE PAGE TO STOCK OPTION AGREEMENT] EX-3 3 FORM OF VOTING AGREEMENT 1 Exhibit 3 VOTING AGREEMENT THIS VOTING AGREEMENT (this "Agreement") is made and entered into as of February 21, 1999, among LSI Logic Corporation, a Delaware corporation ("Parent"), and the undersigned stockholder and/or option holder (the "Stockholder") of SEEQ Technology Incorporated, a Delaware corporation (the "Company"). RECITALS A. The Company, Merger Sub (as defined below) and Parent have entered into an Agreement and Plan of Reorganization and Merger (the "Reorganization Agreement"), which provides for the merger (the "Merger") of a wholly-owned subsidiary of Parent ("Merger Sub") with and into the Company. Pursuant to the Merger, all outstanding capital stock of the Company shall be converted into the right to receive common stock of Parent, as set forth in the Reorganization Agreement; B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such number of shares of the outstanding capital stock of the Company and shares subject to outstanding options and warrants as is indicated on the signature page of this Agreement; and C. In consideration of the execution of the Reorganization Agreement by Parent, Stockholder agrees to vote the Shares (as defined below) and other such shares of capital stock of the Company over which Stockholder has voting power so as to facilitate consummation of the Merger. NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows: 1. Certain Definitions. Capitalized terms not defined herein shall have the meanings ascribed to them in the Reorganization Agreement. For purposes of this Agreement: (a) "Expiration Date" shall mean the earlier to occur of (i) such date and time as the Reorganization Agreement shall have been terminated pursuant to Article VII thereof, or (ii) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Reorganization Agreement. (b) "Person" shall mean any (i) individual, (ii) corporation, limited liability company, partnership or other entity, or (iii) governmental authority. (c) "Shares" shall mean: (i) all securities of the Company (including all shares of Company Common Stock and all options, warrants and other rights to acquire shares of Company Common Stock) owned by Stockholder as of the date of this Agreement; and (ii) all additional securities of the Company (including all additional shares of Company Common Stock and all additional options, warrants and other rights to acquire shares of Company Common Stock) of which Stockholder acquires ownership during the period from the date of this Agreement through the Expiration Date. 2 (d) Transfer. A Person shall be deemed to have effected a "Transfer" of a security if such person directly or indirectly: (i) sells, pledges, encumbers, grants an option with respect to, transfers or disposes of such security or any interest in such security; or (ii) enters into an agreement or commitment providing for the sale of, pledge of, encumbrance of, grant of an option with respect to, transfer of or disposition of such security or any interest therein. 2. Transfer of Shares. (a) Transferee of Shares to be Bound by this Agreement. Stockholder agrees that, during the period from the date of this Agreement through the Expiration Date, Stockholder shall not cause or permit any Transfer of any of the Shares to be effected unless such Transfer is in accordance with any affiliate agreement between Stockholder and Parent contemplated by the Reorganization Agreement and each Person to which any of such Shares, or any interest in any of such Shares, is or may be transferred shall have: (a) executed a counterpart of this Agreement and a proxy in the form attached hereto as Exhibit A (with such modifications as Parent may reasonably request); and (b) agreed in writing to hold such Shares (or interest in such Shares) subject to all of the terms and provisions of this Agreement. (b) Transfer of Voting Rights. Stockholder agrees that, during the period from the date of this Agreement through the Expiration Date, Stockholder shall not deposit (or permit the deposit of) any Shares in a voting trust or grant any proxy or enter into any voting agreement or similar agreement in contravention of the obligations of Stockholder under this Agreement with respect to any of the Shares. 3. Agreement to Vote Shares. At every meeting of the stockholders of the Company called, and at every adjournment thereof, and on every action or approval by written consent of the stockholders of the Company, Stockholder shall cause the Shares to be voted in favor of approval of the Reorganization Agreement and the Merger and in favor of any matter that could reasonably be expected to facilitate the Merger. 4. Irrevocable Proxy. Concurrently with the execution of this Agreement, Stockholder agrees to deliver to Parent a proxy in the form attached hereto as Exhibit A (the "Proxy"), which shall be irrevocable to the fullest extent permissible by law, with respect to the Shares. 5. Representations and Warranties of the Stockholder. Stockholder (i) is the beneficial owner of the shares of Common Stock of the Company, Preferred Stock of the Company and the options and warrants to purchase shares of Common Stock of the Company indicated on the final page of this Agreement, free and clear of any liens, claims, options, rights of first refusal, co-sale rights, charges or other encumbrances; (ii) does not beneficially own any securities of the Company other than the shares of Common Stock of the Company, Preferred Stock of the Company and options and warrants to purchase shares of Common Stock of the Company indicated on the final page of this Agreement; and (iii) has full power and authority to make, enter into and carry out the terms of this Agreement and the Proxy. -2- 3 6. Additional Documents. Stockholder hereby covenants and agrees to execute and deliver any additional documents necessary or desirable, in the reasonable opinion of Parent, to carry out the intent of this Agreement. 7. Consent and Waiver. Stockholder (not in his capacity as a director or officer of the Company) hereby gives any consents or waivers that are reasonably required for the consummation of the Merger under the terms of any agreements to which Stockholder is a party or pursuant to any rights Stockholder may have. 8. Legending of Shares. If so requested by Parent, Stockholder agrees that the Shares shall bear a legend stating that they are subject to this Agreement and to an irrevocable proxy. Subject to the terms of Section 2 hereof, Stockholder agrees that Stockholder shall not Transfer the Shares without first having the aforementioned legend affixed to the certificates representing the Shares. 9. Termination. This Agreement shall terminate and shall have no further force or effect as of the Expiration Date. 10. Miscellaneous. (a) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. (b) Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by either of the parties without prior written consent of the other. (c) Amendments and Modification. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto. (d) Specific Performance; Injunctive Relief. The parties hereto acknowledge that Parent shall be irreparably harmed and that there shall be no adequate remedy at law for a violation of any of the covenants or agreements of Stockholder set forth herein. Therefore, it is agreed that, in addition to any other remedies that may be available to Parent upon any such violation, Parent shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to Parent at law or in equity. (e) Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by -3- 4 registered or certified mail (return receipt requested), postage prepaid, to the parties at the following address (or at such other address for a party as shall be specified by like notice): If to Parent: LSI Logic Corporation 1551 McCarthy Boulevard Milpitas, California 95035 Attention: Vice President and General Counsel Telephone: (408) 433-7189 Facsimile: (408) 433-6896 With a copy to: Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 Attention: Larry W. Sonsini, Esq. Daniel R. Mitz, Esq. Telephone: (650) 493-9300 Facsimile: (650) 493-6811 If to Stockholder: To the address for notice set forth on the signature page hereof. (f) Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without reference to rules of conflicts of law. (g) Entire Agreement. This Agreement and the Proxy contain the entire understanding of the parties in respect of the subject matter hereof, and supersede all prior negotiations and understandings between the parties with respect to such subject matter. (h) Effect of Headings. The section headings are for convenience only and shall not affect the construction or interpretation of this Agreement. (i) Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. [The remainder of this page has been intentionally left blank.] * * * -4- 5 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the day and year first above written. LSI LOGIC CORPORATION STOCKHOLDER By:____________________________________ By:_________________________________ Signature of Authorized Signatory Signature Name:__________________________________ Name:_______________________________ Title:_________________________________ Title:______________________________ ------------------------------------ ------------------------------------ Print Address ------------------------------------ Telephone ------------------------------------ Facsimile No. Share beneficially owned: ___________ shares of Company Common Stock ___________ shares of Company Preferred Stock ___________ shares of Company Common Stock issuable upon exercise of outstanding options or warrants [SIGNATURE PAGE TO VOTING AGREEMENT] 6 EXHIBIT A IRREVOCABLE PROXY The undersigned stockholder of SEEQ Technology Incorporated, a Delaware corporation (the "Company"), hereby irrevocably (to the fullest extent permitted by law) appoints the directors on the Board of Directors of LSI Logic Corporation, a Delaware corporation ("Parent"), and each of them, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the shares of capital stock of the Company that now are or hereafter may be beneficially owned by the undersigned, and any and all other shares or securities of the Company issued or issuable in respect thereof on or after the date hereof (collectively, the "Shares") in accordance with the terms of this Proxy. The Shares beneficially owned by the undersigned stockholder of the Company as of the date of this Proxy are listed on the final page of this Proxy. Upon the undersigned's execution of this Proxy, any and all prior proxies given by the undersigned with respect to any Shares are hereby revoked and the undersigned agrees not to grant any subsequent proxies with respect to the Shares until after the Expiration Date (as defined below). This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an interest and is granted pursuant to that certain Voting Agreement of even date herewith by and among Parent and the undersigned stockholder (the "Voting Agreement"), and is granted in consideration of Parent entering into that certain Agreement and Plan of Reorganization and Merger (the "Reorganization Agreement"), among Parent, Stealth Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), and the Company. The Reorganization Agreement provides for the merger of Merger Sub with and into the Company in accordance with its terms (the "Merger"). As used herein, the term "Expiration Date" shall mean the earlier to occur of (i) such date and time as the Reorganization Agreement shall have been validly terminated pursuant to Article VIII thereof or (ii) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Reorganization Agreement. The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the undersigned, at any time prior to the Expiration Date, to act as the undersigned's attorney and proxy to vote the Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to the Shares (including, without limitation, the power to execute and deliver written consents) at every annual, special or adjourned meeting of stockholders of the Company and in every written consent in lieu of such meeting in favor of approval of the Merger, the execution and delivery by the Company of the Reorganization Agreement and the adoption and approval of the terms thereof and in favor of each of the other actions contemplated by the Reorganization Agreement and any action required in furtherance hereof and thereof. The attorneys and proxies named above may not exercise this Proxy on any other matter except as provided above. The undersigned stockholder may vote the Shares on all other matters. Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned. 7 This Proxy is irrevocable (to the fullest extent permitted by law). This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Date. Dated:__________________________, 1999 Signature of Stockholder:_______________________ Print Name of Stockholder:______________________ Shares beneficially owned: _________ shares of the Company Common Stock _________ shares of Company Preferred Stock _________ shares of the Company Common Stock issuable upon exercise of outstanding options or warrants [SIGNATURE PAGE TO IRREVOCABLE PROXY] -----END PRIVACY-ENHANCED MESSAGE-----