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EXHIBIT 10.54
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SECURITIES PURCHASE AND HOLDERS AGREEMENT
By and Among
FSC SEMICONDUCTOR CORPORATION,
STERLING HOLDING COMPANY, LLC,
NATIONAL SEMICONDUCTOR CORPORATION,
and
MANAGEMENT INVESTORS
Dated as of March 11, 1997
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TABLE OF CONTENTS
Page
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Background................................................................... 1
Terms .................................................................... 2
ARTICLE I PURCHASE OF SECURITIES................................. 2
1.1 Designation of Management Investors.................... 2
1.2 Purchase of Securities................................. 2
1.3 Closing................................................ 2
1.4 Conditions to Management Investor's Obligations........ 3
1.5 Conditions to the Company's Obligations................ 3
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY................................................ 4
2.1 Representations and Warranties of the Company.......... 4
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
INVESTORS.............................................. 5
3.1 Representations, Warranties and Covenants of
Each Investor.......................................... 5
3.2 Management Investor Representations and
Warranties............................................. 5
3.3 Legend................................................. 6
3.4 Restrictions on Transfers of Securities................ 7
3.5 Notation............................................... 9
ARTICLE IV OTHER COVENANTS AND REPRESENTATIONS.................... 9
4.1 Observers' Rights...................................... 10
4.2 Financial Statements and Other Information............. 10
4.3 Regulatory Compliance Cooperation...................... 11
4.4 Sale of the Company.................................... 12
4.5 Tag-Along.............................................. 13
4.6 Preemptive Rights...................................... 15
4.7 Affiliate Transactions................................. 16
4.8 Subsequent Management Investors........................ 17
ARTICLE V CORPORATE ACTIONS...................................... 18
5.1 Certificate of Incorporation and Bylaws................ 18
5.2 Directors and Voting Agreements........................ 18
5.3 Right to Remove Certain of the Company's
Directors.............................................. 19
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5.4 Right to Fill Certain Vacancies in Company's
Board.................................................. 19
5.5 Directors of Xxxxxxxxx and Voting Agreements........... 19
5.6 Amendment of Certificate and Bylaws.................... 19
5.7 Termination of Voting Agreements....................... 20
5.8 Officers............................................... 20
ARTICLE VI ADDITIONAL RESTRICTIONS ON TRANSFERS OF
INCENTIVE SECURITIES HELD BY MANAGEMENT
INVESTORS.............................................. 20
6.1 Certain Definitions.................................... 20
6.2 Restrictions on Transfer............................... 21
6.3 Purchase Option........................................ 23
6.4 Involuntary Transfers.................................. 28
6.5 Purchaser Representative............................... 29
6.6 Section 83(b) Elections................................ 29
6.7 Termination of Restrictions on Incentive
Securities............................................. 29
ARTICLE VII REGISTRATION RIGHTS.................................... 29
ARTICLE VIII DEFINITIONS............................................ 30
ARTICLE IX MISCELLANEOUS.......................................... 31
9.1 Amendment and Modification............................. 31
9.2 Survival of Representations and Warranties............. 31
9.3 Successors and Assigns; Entire Agreement............... 32
9.4 Separability........................................... 32
9.5 Notices................................................ 32
9.6 Governing Law.......................................... 34
9.7 Headings............................................... 34
9.8 Counterparts........................................... 34
9.9 Further Assurances..................................... 34
9.10 Termination............................................ 34
9.11 Remedies............................................... 34
9.12 Party No Longer Owning Securities...................... 34
9.13 No Effect on Employment................................ 34
9.14 Pronouns............................................... 34
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EXHIBITS
Exhibit A-1 Certificate of Incorporation of the Company
Exhibit A-2 Bylaws of the Company
Exhibit A-3 Certificate of Incorporation of Xxxxxxxxx
Exhibit A-4 Bylaws of Xxxxxxxxx
Exhibit B Registration Rights Agreement
Exhibit C NSC Note
Exhibit D Side Letter
SCHEDULES
Schedule I Management Investors; Management Securities
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SECURITIES PURCHASE AND HOLDERS AGREEMENT
SECURITIES PURCHASE AND HOLDERS AGREEMENT, dated March
11, 1997 (the "Agreement"), by and among FSC SEMICONDUCTOR CORPORATION, a
Delaware corporation (the "Company"), STERLING HOLDING COMPANY, LLC, a Delaware
limited liability company ("Sterling"), NATIONAL SEMICONDUCTOR CORPORATION, a
Delaware corporation ("NSC"), and the individuals and trust(s) listed as
"Management Investors" on Schedule I hereto (collectively, the "Management
Investors"). As used herein, Sterling, NSC and the Management Investors are
sometimes referred to individually as an "Investor" and collectively as the
"Investors."
Background
A. NSC and Sterling are parties to an Agreement and
Plan of Recapitalization dated January 24, 1997 (the "Recap Agreement") pursuant
to which, NSC is selling certain assets and assigning certain liabilities
relating to the Business (as defined in the Recap Agreement) to Xxxxxxxxx
Semiconductor Corporation ("Fairchild"), a wholly-owned subsidiary of the
Company, Fairchild is purchasing such assets and assuming such liabilities, and
Sterling and Management Investors are acquiring certain securities of the
Company.
B. The authorized capital stock of the Company
consists of shares of the Company's Class A Common Stock, par value $.01 per
share ("Class A Common Stock"), the Company's Class B Common Stock, par value
$.01 per share ("Class B Common Stock" and collectively with the Class A Common
Stock, the "Common Stock") (collectively hereinafter referred to as the "Common
Stock" or "Shares"), and the Company's Series A 12% Cumulative Compounding
Preferred Stock, par value $.01 per share ("Preferred Stock").
C. The Recap Agreement provides that Sterling may
designate members of management of the Business (as defined in the Recap
Agreement) to purchase certain of the Class A Common Stock and Preferred Stock
to be acquired by Sterling under the Recap Agreement and Sterling desires to
designate Management Investors (including the trusts described in D. immediately
below) as such Persons and Management Investors desire to purchase the shares of
Class A Common Stock and Preferred Stock listed opposite their names on Schedule
I.
D. Elections by any individual Management Investor to
purchase the shares referred to in C. immediately above shall be deemed to be
satisfied, for purposes of this Agreement, by the
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purchase of the shares by (i) the trustee of the Trust Under the National
Semiconductor Corporation Deferred Compensation Plan (the "Rabbi Trust"), dated
March 11, 1997 by and between National Semiconductor Corporation and X.X. Xxxxxx
& Co., which is being assumed by Fairchild from NSC, and (ii) Key Trust Company,
N.A., as trustee of the Xxxxxx Xxxxxx 401(k) Profit Sharing Plan F.B.O. Xxxxxx
X. Xxxxx (collectively, the "Trust Management Investors"). The trustees of the
Trust Management Investors are permitted and authorized to acquire and hold such
shares.
E. As used herein, the term "Securities" shall mean the
Preferred Stock and Common Stock held beneficially or of record by any party
hereto, including shares of Common Stock and all other securities of the Company
(or a successor to the Company) received on account of ownership of the
Preferred Stock and Common Stock, including all securities issued in connection
with any merger, consolidation, stock dividend, stock distribution, stock split,
reverse stock split, stock combination, recapitalization, reclassification,
subdivision, conversion or similar transaction in respect thereof.
F. The Investors and the Company wish to set forth certain
agreements regarding their future relationships and certain rights and
obligations with respect to the Securities.
Terms
In consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
PURCHASE OF SECURITIES
1.1 Designation of Management Investors. Sterling
designates the Management Investors as the "Management Investors" under the
Recap Agreement and designates the number of shares of Class A Common Stock and
the number of shares of Preferred Stock set forth opposite each Management
Investor's name on Schedule I (collectively, the "Management Securities") hereto
as the Securities that such Management Investor will purchase at the closing of
the transactions contemplated by the Recap Agreement (the "Recap Closing"),
which Securities Sterling would otherwise have purchased.
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1.2 Purchase of Securities. Subject to the terms and
conditions set forth herein, at the Closing the Company will issue and sell to
each of the Management Investors, and each of the Management Investors will
purchase, such Management Investor's Management Securities at a purchase price
of $.50 per share of Class A Common Stock, and $1,000 per share of Preferred
Stock.
1.3 Closing. The closing of the purchase and sale of the
Management Securities (the "Closing") will take place on the date of the Recap
Closing (the "Closing Date"). At the Closing, the Company will deliver to each
Management Investor certificates evidencing the number of shares of Class A
Common Stock and the number of shares of Preferred Stock to be purchased by such
Management Investor, against payment of the purchase price therefor by wire
transfer of immediately available funds or by certified check; provided,
however, that the trustee of each Trust Management Investor shall purchase said
trust's shares of Management Securities, as designated on Schedule I or by
written notice from Xxxxxxxxx or said trustee delivered to the Company prior or
at the Closing.
1.4 Conditions to Management Investor's Obligations. The
obligation of each Management Investor to purchase such Management Investor's
Management Securities at the Closing is subject to the satisfaction on or prior
to the Closing Date of the following conditions:
(a) The representations and warranties of the Company set
forth in Article II shall be true and correct in all material respects on and as
of the Closing Date as though then made, and all covenants of the Company set
forth in Article I required to be performed on or prior to the Closing shall
have been performed in all material respects.
(b) The Company's Certificate of Incorporation and Bylaws
shall be substantially in the forms of Exhibits A-1 and A- 2, respectively.
(c) The Company shall have delivered to each of the
Management Investors certificates for the Management Securities being purchased
by such Management Investor.
(d) The conditions to the Recap Closing shall have been
satisfied or waived.
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(e) All corporate and other proceedings, if any, taken or
to be taken by the Company in connection with the transactions contemplated
hereby shall have been taken.
(f) The Rabbi Trust shall be funded on the Closing Date
with all benefits which have been deferred and made payable into said trust by
prior action of the individual Management Investors in accordance with the
National Semiconductor Corporation Deferred Compensation Plan.
1.5 Conditions to the Company's Obligations. The obligations
of the Company to issue and sell the Management Securities to each Management
Investor as set forth herein at the Closing are subject to the satisfaction on
or prior to the Closing of the following conditions:
(a) The representations and warranties of each Investor
set forth in Article III shall be true and correct in all material respects at
and as of the Closing Date as though then made, and all covenants of each
Investor required to be performed at or prior to the Closing shall have been
performed in all material respects.
(b) The conditions to the Recap Closing shall have been
satisfied or waived.
(c) Such Management Investor shall have delivered the
purchase price required of such Management Investor pursuant to this Article I.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE COMPANY
2.1 Representations and Warranties of the Company. The Company
represents and warrants to, and covenants and agrees with, each of the Investors
as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
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(b) The Company has all requisite corporate power and
corporate authority to execute, deliver and perform this Agreement and to
consummate the transactions provided for herein without the need for the consent
of any other Person.
(c) The execution, delivery and performance by the Company
of this Agreement and the consummation by the Company of the transactions
contemplated hereby, including, but not limited to, the issuance and sale of the
Securities to be issued by it, and this Agreement constitutes the valid and
binding obligations of the Company, enforceable against the Company in
accordance with the terms hereof.
(d) The Securities when issued in compliance with the
provisions of this Agreement will be validly issued, fully paid and
non-assessable.
(e) As of the Closing, the authorized capital stock of the
Company will consist of (i) 30,000,000 shares of Class A Common Stock, of which
7,300,000 shares will be issued and outstanding immediately after the Closing;
(ii) 30,000,000 shares of Class B Common Stock, of which 8,300,000 shares will
be issued and outstanding immediately after the Closing and (iii) 70,000 shares
of Preferred Stock, of which 70,000 shares will be issued and outstanding
immediately after the Closing. As of the Closing, there will be no rights,
subscriptions, warrants, options, conversion rights, or agreements of any kind
outstanding to purchase from the Company, or otherwise require the Company to
issue, any shares of capital stock of the Company or securities or obligations
of any kind convertible into or exchangeable for any shares of capital stock of
the Company; provided, however, that the Company has authorized an employee
stock option plan authorizing the issuance of options or restricted stock for up
to 5% of the Common Stock on a fully-diluted basis; the Company will not be
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock; and the shares of Common
Stock and Preferred Stock held by the Investors will constitute all of the
outstanding shares of the Company's capital stock.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF INVESTORS
3.1 Representations, Warranties and Covenants of Each
Investor. Each of the Investors severally represents and warrants to, and
covenants and agrees with, the Company that such Investor has the requisite
legal right, power and authority (including, if applicable, the due
authorization by all necessary corporate action) to enter into this Agreement
and to perform such Investor's obligations hereunder and to consummate the
transactions provided for herein without the need for the consent of any other
Person; and this Agreement has been duly authorized, executed and delivered and
constitutes the valid and binding obligation of such Investor enforceable
against such Investor in accordance with the terms hereof.
3.2 Management Investor Representations and Warranties. Each
Management Investor (other than the Trust Management Investors, which are
representing and warranting as to paragraphs (a), (b), (e) and (f) only)
severally represents and warrants to the Company and the other Investors that:
(a) The Securities are being purchased by such Management
Investor for investment, and not with a view to any distribution thereof that
would violate the Securities Act of 1933, as amended (the "Securities Act"), or
the applicable state securities laws of any state; and such Management Investor
will not distribute the Securities in violation of the Securities Act or the
applicable securities laws of any state.
(b) Such Management Investor understands that the
Securities have not been registered under the Securities Act or the securities
laws of any state and must be held indefinitely unless subsequently registered
under the Securities Act and any applicable state securities laws or unless an
exemption from such registration becomes or is available.
(c) Such Management Investor is financially able to hold
the Securities for long-term investment, believes that the nature and amount of
the Securities being purchased are consistent with such Management Investor's
overall investment program and financial position, and recognizes that there are
substantial risks involved in the purchase of the Securities.
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(d) Such Management Investor confirms that (i) such
Management Investor is familiar with the business of the Company and Xxxxxxxxx,
(ii) such Management Investor has had the opportunity to ask questions of the
officers and directors of the Company and Xxxxxxxxx and to obtain (and that such
Management Investor has received to its satisfaction) such information about the
business and financial condition of the Company and Xxxxxxxxx as it has
reasonably requested, and (iii) such Investor, either alone or with such
Investor's representative (as defined in Rule 501(h) promulgated under the
Securities Act), if any, has such knowledge and experience in financial and
business matters that such Management Investor is capable of evaluating the
merits and risks of the prospective investment in the Securities.
(e) Such Management Investor's residence, business
address, business and residence telephone numbers and social security number or,
in the case of each Trust Management Investor, its business address, telephone
number and taxpayer identification number, are as set forth below his, her or
its signature to this Agreement.
(f) In formulating a decision to enter into this
Agreement, such Management Investor has relied solely upon (i) the provisions of
this Agreement, and (ii) except in the case of the Trust Management Investors,
an independent investigation of the Company's and Xxxxxxxxx'x business and upon
consultations with his or her legal and financial advisers with respect to this
Agreement and the nature of his, her or its investment; and that in entering
into this Agreement no reliance was placed by any such Management Investor upon
any representations or warranties other than those contained in this Agreement.
3.3 Legend. The certificates representing the Securities shall
bear the following legend in addition to any other legend required under
applicable law:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO THE TERMS AND CONDITIONS OF A SECURITIES PURCHASE
AND HOLDERS AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS
SPECIFIED THEREIN, DATED AS OF MARCH 11, 1997, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
THE SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE
SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE
SECURITIES ARE TRANSFERABLE OR OTHERWISE DISPOSABLE ONLY UPON
PROOF OF COMPLIANCE THEREWITH.
3.4 Restrictions on Transfers of Securities.
The following restrictions on Transfer shall apply to all
Securities owned by any Restricted Investor. As used herein, "Restricted
Investor" shall mean any Investor or Permitted Transferee (except a Permitted
Transferee by virtue of Section 3.4(b)(iv) hereof):
(a) No Restricted Investor shall Transfer (other than in
connection with a redemption or purchase by the Company which shall in any event
be subject to Section 3.4(c)) any Securities unless (i) such Transfer is to a
Person approved in advance in writing by the holders of at least fifty percent
(50%) of the outstanding Common Stock then held by the Restricted Investors
(including shares held by the transferor), (ii) such Transfer complies with the
provisions, if applicable, of Sections 4,4, 4,5 and 4.6, this Section 3.4, and,
in addition, in the case of Incentive Securities, Article VI of this Agreement
and (iii) such Transfer is not prohibited by Section 3.4(c). Any purported
Transfer in violation of this Agreement shall be null and void and of no force
and effect and the purported transferee shall have no rights or privileges in or
with respect to the Company. As used herein, "Transfer" includes the making of
any sale, exchange, assignment, hypothecation, gift, security interest, pledge
or other encumbrance, or any contract therefor, any voting trust or other
agreement or arrangement with respect to the transfer of voting rights or any
other beneficial interest in any of the Securities, the creation of any other
claim thereto or any other transfer or disposition whatsoever, whether voluntary
or involuntary, affecting the right, title, interest or possession in or to such
Securities.
Prior to any proposed Transfer of any Securities, the
holder thereof shall give written notice to the Company describing the manner
and circumstances of the proposed
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Transfer accompanied by a written opinion of legal counsel, addressed to the
Company and the transfer agent, if other than the Company, and reasonably
satisfactory in form and substance to each addressee, to the effect that the
proposed Transfer of the Securities may be effected without registration under
the Securities Act and applicable state securities laws. Each certificate
evidencing the Securities transferred shall bear the legends set forth in
Section 3.3, except that such certificate shall not bear such legend if the
opinion of counsel referred to above is to the further effect that such legend
is not required in order to establish compliance with any provision of the
Securities Act or applicable state securities laws.
Nothing in this Section 3.4(a) shall prevent the
Transfer, free of any restrictions under this Agreement, of Securities by a
Restricted Investor to one or more of its Permitted Transferees, or to the
Company (subject to Section 3.4(c)); provided, however, that each such Permitted
Transferee shall take such Securities subject to and be fully bound by the terms
of this Agreement applicable to it with the same effect as if it were a party
hereto; and provided, further, that (i) no Person (other than a Permitted
Transferee by virtue of Section 3.4(b)(iv) hereof) shall be a Permitted
Transferee unless such transferee becomes a party to this Agreement, and (ii) no
Transfer shall be effected except in compliance with the registration
requirements of the Securities Act and any applicable state securities laws or
pursuant to an available exemption therefrom.
(b) As used herein, "Permitted Transferee" shall mean:
(i) in the case of any Investor or Permitted
Transferee who is a natural Person, such Person's spouse or children or
grandchildren (in each case, natural or adopted), any trust for the sole benefit
of such Person and such Person's spouse or children or grandchildren (in each
case, natural or adopted), any charitable trust the grantor of which is an
Investor or Permitted Transferee, or any corporation or partnership in which the
direct and beneficial owner of all of the equity interest is such individual
Person or such Person's spouse or children or grandchildren (in each case,
natural or adopted) (or any trust for the benefit of such Persons);
(ii) in the case of any Investor or Permitted
Transferee who is, in each case, a natural Person, the heirs,
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executors, administrators or personal representatives upon the death of such
Person or upon the incompetency or disability of such Person for purposes of the
protection and management of such Person's assets;
(iii) in the case of NSC, any Affiliate (as hereinafter
defined) of NSC;
(iv) in the case of any Investor or Permitted Transferee,
any Person if such Person takes such Securities pursuant to a sale in connection
with a Public Offering (as defined in Section 6.1(c)) or following a Public
Offering in open market transactions or under Rule 144 under the Securities Act;
(v) in the case of Sterling or any Permitted Transferee of
Sterling, Citicorp Venture Capital Ltd., Citicorp N.A., any officer, employee or
director of Citicorp Venture Capital Ltd. or Citicorp N.A., any trust,
partnership or other entity established solely for the benefit of such officers,
employees or directors, or any qualified institutional buyer, as such term is
defined in Rule 144A, organized under the laws of the United States or any State
thereof (provided that such qualified institutional buyer shall only be a
Permitted Transferee of up to 3% of the outstanding Common Stock and up to $2.2
million in liquidation value of Preferred Stock);
(vi) in the case of NSC, Citicorp Venture Capital Ltd., or
Citicorp N.A., any Person who acquires or succeeds to 50% or more of the
outstanding capital stock or assets of such Person or engages in any similar
extraordinary transaction involving such Person; and
(vii) in the case of a Trust Management Investor, the one
or more individual Management Investors participating in the plan to which the
trust relates or any Permitted Transferee of any such individual Management
Investor;
(c) Notwithstanding anything to the contrary contained herein,
the Company and each Restricted Investor agrees that, without the prior written
consent of NSC, (i) so long as the Company's 11.74% Subordinated Note due 2009
(attached hereto as Exhibit C) issued to NSC on the date hereof remains
outstanding, it will not Transfer any Securities or engage in any transaction
which would require the Company to redeem any amount outstanding under such Note
pursuant to the redemption provisions contained in
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Section 4 thereof (other than a Public Equity Offering (as defined in such
Note)) and (ii) it will not Transfer any Securities or engage in any transaction
or series of transactions which would require a payment (whether in cash,
securities or other property) to NSC pursuant to the terms of the letter from
NSC to the Company and Citicorp Venture Capital Ltd. dated the date hereof
regarding Extraordinary Transactions (as defined therein) (attached hereto as
Exhibit D).
(d) As used herein, "Affiliate" means with respect to any
Person, a corporation in which such Person owns, directly or indirectly through
one or more intermediaries at least fifty percent (50%) of the outstanding
capital stock of such corporation.
3.5 Notation. A notation will be made in the appropriate
transfer records of the Company with respect to the restrictions on transfer of
the Securities referred to in this Agreement.
ARTICLE IV
OTHER COVENANTS AND REPRESENTATIONS
4.1 Observers' Rights. So long as Sterling or its Affiliates
own at least 10% of the Common Stock outstanding, if no employee of Sterling or
its Affiliates is a member of the Company's Board of Directors, Sterling shall
have the right to designate two observers (the "Observers") to attend meetings
of the Company's Board of Directors and committees thereof. If only one employee
of Sterling is a member of the Company's Board of Directors, Sterling shall have
the right to designate one Observer to attend meetings of the Company's Board of
Directors and committees thereof. So long as NSC or its Affiliates own at least
10% of the Common Stock outstanding, if no officer of NSC is a member of the
Company's Board of Directors, NSC shall have the right to designate one Observer
to attend meetings of the Company's Board of Directors and committees thereof.
The Observers shall not have the right to vote on any matter presented to the
Board of Directors or any committee thereof. The Company shall give each
Observer written notice of each meeting of the Board of Directors and committees
thereof at the same time and in the same manner as the members of the Board of
Directors or such committee receive notice of such meetings, and the Company
shall permit each Observer to attend as an observer all meetings of its Board of
Directors and committees thereof. Each Observer shall be entitled to receive all
written materials and
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other information given to the directors in connection with such meetings at the
same time such materials and information are given to the directors, and each
Observer shall keep such materials and information confidential. If the Company
proposes to take any action by written consent in lieu of a meeting of its Board
of Directors or a committee thereof, the Company shall give written notice
thereof to each Observer prior to the effective date of such consent. The
Company shall provide to each Observer all written materials and other
information given to the directors in connection with such action by written
consent at the same time such materials and information are given to the
directors, and each Observer shall keep such materials and information
confidential. The Company shall pay the reasonable out-of-pocket expenses of
each Observer incurred in connection with attending such meetings.
4.2 Financial Statements and Other Information. So long as
Sterling, Citicorp Venture Capital Ltd. or NSC owns any of the Securities, the
Company shall deliver to Citicorp Venture Capital Ltd. (if any Securities are
then owned by it or Sterling) and NSC (if any Securities are then owned by NSC):
(a) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year of the
Company, consolidated balance sheets of the Company and its subsidiaries as of
the end of such period, and consolidated statements of income and cash flows of
the Company and its subsidiaries for the period then ended prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein, and subject to the
absence of footnotes and to year-end adjustments;
(b) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a consolidated and
consolidating balance sheet of the Company and its subsidiaries as of the end of
such year, and consolidated and consolidating statements of income and cash
flows of the Company and its subsidiaries for the year then ended prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein, together with an
auditor's report thereon of a firm of established national reputation; and
(c) to the extent the Company is required by law or
pursuant to the terms of any outstanding indebtedness of the Company to prepare
such reports, any annual reports, quarterly
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reports and other periodic reports pursuant to Section 13 or 15(d) of the
Exchange Act actually prepared by the Company as soon as available.
4.3 Regulatory Compliance Cooperation. (a) So long as Sterling
or its Affiliates beneficially own any of the Securities, before the Company
redeems, purchases or otherwise acquires, directly or indirectly, or converts or
takes any action with respect to the voting rights of, any shares of any class
of its capital stock or any securities convertible into or exchangeable for any
shares of any class of its capital stock, the Company shall give Sterling thirty
(30) days prior written notice of such pending action. Upon the written request
of Sterling made within thirty (30) days after its receipt of any such notice,
stating that after giving effect to such action Sterling would have a Regulatory
Problem (as described below), the Company will defer taking such action for such
period (not to extend beyond ninety (90) days after Sterling's receipt of the
Company's original notice) as Sterling reasonably requests to permit it and its
Affiliates to reduce the quantity of Securities held by it and its Affiliates in
order to avoid the Regulatory Problem. In addition, the Company will not be a
party to any merger, consolidation, recapitalization or other transaction
pursuant to which Sterling would be required to take any voting securities, or
any securities convertible into voting securities, which might reasonably be
expected to cause Sterling to have a Regulatory Problem. For purposes of this
paragraph, a Person will be deemed to have a "Regulatory Problem" when such
Person and such Person's associates, as that term is defined under the
regulations of the Small Business Administration, would own, control or have
power over a greater quantity of securities of any kind issued by the Company
than are permitted to be owned under any requirement of any governmental
authority applicable to such Person.
(b) As long as Sterling holds any Preferred Stock, the
Company shall notify Sterling (a) at least 15 days prior to taking any action
after which the number of record holders of the Company's voting stock would be
increased from fewer than 50 to 50 or more, and (b) of any other action or
occurrence after which the number of record holders of the Company's voting
stock was increased (or would increase) from fewer than 50 to 50 or more, as
soon as practicable after the Company becomes aware that such other action or
occurrence has occurred or is proposed to occur.
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(c) Promptly after the end of each fiscal year (but in any
event prior to February 28 of each year) the Company shall deliver to Sterling a
written assessment of the economic impact of Sterling's investment in the
Company, specifying the full-time equivalent jobs created or retained in
connection with the investment, the impact of the investment on the businesses
of the Company in terms of expanded revenue and taxes, and other economic
benefits resulting from the investment, including but not limited to, technology
development or commercialization, minority business development, urban or rural
business development, expansion or exports.
4.4 Sale of the Company.
(a) Subject to Section 3.4(c), so long as the Company has
not consummated a Public Offering (as defined in Section 6.1(c)), if holders of
at least fifty percent (50%) of the Common Stock then outstanding vote in favor
of (at a duly called and duly held meeting of stockholders of the Company) or
consent in writing to the merger or consolidation of the Company or the sale of
all or substantially all of its assets or sale of all of the outstanding capital
stock or any other similar transaction (any of the foregoing, an "Approved
Sale"), (i) each Restricted Investor will consent to, vote for, and raise no
objections against, and waive dissenters and appraisal rights (if any) with
respect to, the Approved Sale, (ii) if the Approved Sale includes a sale of the
Preferred Stock, each Restricted Investor will agree to sell and will be
permitted to sell all of such Restricted Investor's Preferred Stock on the terms
and conditions approved by the holders of a majority of the Common Stock then
outstanding, and (iii) if the Approved Sale is structured as a sale of stock,
each Restricted Investor will agree to sell and will be permitted to sell all of
such Restricted Investor's Common Stock on the terms and conditions approved by
the holders of a majority of the Common Stock then outstanding. Each Restricted
Investor will take all necessary and desirable actions in connection with the
consummation of an Approved Sale.
(b) Subject to Section 3.4(c), at least ten days prior to
any Approved Sale, the Company shall notify each Restricted Investor in writing
of the proposed Approved Sale, which notice shall set forth the terms of such
Approved Sale. The obligations of each of the Investors with respect to an
Approved Sale are subject to the satisfaction of the conditions that: upon the
consummation of the Approved Sale all of the Restricted
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Investors will receive the same form and amount of consideration per share of
Common Stock, or if any holder of Common Stock is given an option as to the form
and amount of consideration to be received, all Restricted Investors will be
given the same option.
4.5 Tag-Along.
(a) (i) Except as otherwise provided in Sections
4.5(a)(iii) and 4.5(a)(v) and subject to Section 3.4(c), no "Seller" (as
hereinafter defined) shall sell any Securities in any transaction or series of
related transactions unless all "Holders" (as hereinafter defined) are offered
an equal opportunity to participate in such transaction or transactions pro rata
based on the relative number of shares of such Securities owned by each Holder
and on identical terms (including amount and type of consideration paid). As
used in this Section 4.5, "Seller" shall mean Sterling and its Affiliates and
NSC and its Affiliates; and "Holders" shall mean the Restricted Investors.
(ii) If at any xxxx Xxxxxx proposes any sale of
Securities subject to these provisions, the Seller shall notify the Company in
writing of the proposed sale. Such notice (the "Seller's Notice") shall set
forth: (A) the number of shares of Securities subject to the proposed sale; (B)
the name and address of the proposed purchaser; and (C) the proposed amount of
consideration and terms and conditions of payment offered by such proposed
purchaser. The Company shall promptly, and in any event within 15 days of the
Company's receipt of the Seller's Notice, deliver or cause to be delivered the
Seller's Notice to each Holder. A Holder may exercise the tag-along right by
delivery of a written notice (the "Tag-Along Notice") to the Seller within 15
days of the date the Company delivered or caused to be delivered the Seller's
Notice. The Tag-Along Notice shall state the number of Securities that the
Holder proposes to include in the proposed sale, up to the maximum pro rata
share described above. If a Holder entitled to participate therein delivers a
Tag-Along Notice, such holder shall be obligated to sell that number of
Securities specified in the Tag-Along Notice upon the same terms and conditions
as the Seller is selling, conditioned upon and contemporaneously with completion
of the Seller's sale of its Securities (except as provided in Section
4.5(a)(vi)). If no Tag-Along Notice is received during the 15-day period
referred to above, the Seller shall have the right for a 120-day period to
effect the proposed sale of Securities on terms and conditions no
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more favorable to the Seller than those stated in the Seller's Notice and in
accordance with the provisions of this Section 4.5.
(iii) Notwithstanding anything herein to the contrary,
a Seller may make any of the following Transfers without offering the Holders
the opportunity to participate: (a) Transfers by a Seller to any Permitted
Transferee, provided that the proposed Permitted Transferee (except a Permitted
Transferee by virtue of Section 3.4(b)(iv) hereof) agrees in writing to be bound
by the provisions of this Agreement; (b) sales pursuant to an effective
registration statement under the Securities Act; (c) sales pursuant to an
Approved Sale; and (d) sales other than those specified in the foregoing (a)
through (c) which are made in compliance with Section 3.4(a) and in the
aggregate do not exceed 5% of the Security outstanding.
(iv) Each Investor acknowledges for itself and its
transferees that Sterling may assign tag-along rights relating to Securities
transferred by it pursuant to the terms of this Agreement and such transferees
will (a) have the same opportunity to participate in sales by Sterling as
provided to the parties hereto, and (b) be included in the calculation of the
pro rata basis upon which Holders may participate in a sale.
(v) The tag-along obligations of the Sellers provided
under this Section 4.5 shall terminate upon the earlier of (a) the consummation
of a Public Offering (as defined in Section 6.1(d)); provided, however, that the
tag-along obligations of Sterling and its Affiliates solely with respect to
transfers by such Persons to the Company or its Affiliates shall not terminate
upon consummation of a Public Offering, (b) as to Sterling, with respect to a
Security, the day after the date on which Sterling and its Affiliates own less
than 5% of such Security, and (c) as to NSC, with respect to a Security, the day
after the date on which NSC and its Affiliates own less than 5% of such
Security, and upon the termination of such tag-along obligations, the rights of
the Holders with respect thereto shall also terminate.
(vi) Notwithstanding the requirements of this Section
4.5, a Seller may sell a Security at any time without complying with the
requirements of Section 4.5(a)(ii) so long as such sale is solely for cash and
the Seller deposits into escrow with an independent third party at the time of
sale that amount of the consideration received in the sale equal to the "Escrow
Amount." The "Escrow Amount" shall equal that amount of
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consideration as all the Holders would have been entitled to receive if they had
the opportunity to participate in the sale on a pro rata basis, determined as if
each Holder (A) delivered a Tag-Along Notice to the Seller in the time period
set forth in Section 4.5(a)(ii) and (B) proposed to include all of its
Securities which it would have been entitled to include in the sale.
No later than the date of the sale, the Seller shall
notify the Company in writing of the proposed sale. Such notice (the "Escrow
Notice") shall set forth the information required in the Seller's Notice, and in
addition, such notice shall state the name of the escrow agent and the account
number of the escrow account. The Company shall promptly, and in any event
within 10 days, deliver or cause to be delivered the Escrow Notice to each
Holder.
A Holder may exercise the tag-along right described in
this clause (vi) by delivery to the Seller, within 15 days of the date the
Company delivered or caused to be delivered the Escrow Notice, of (i) a written
notice specifying the number of Securities it proposes to sell, and (ii) the
certificates representing such Securities, with transfer powers duly endorsed in
blank.
Promptly after the expiration of the 15th day after
the Company has delivered or caused to be delivered the Escrow Notice, (A) the
Seller shall purchase that number of Securities as Seller would have been
required to include in the sale had Seller complied with the provisions of
Section 4.5(a)(ii), (B) the Company shall cause to be released from the escrow
to the Holder from whom Seller purchases Securities pursuant to clause (A) of
this paragraph the applicable amount of consideration due to such Holder
together with any interest thereon, and (C) all remaining funds and other
consideration held in escrow shall be released to Seller.
4.6 Preemptive Rights.
(a) If the Company proposes to issue and sell any of its
shares of Common Stock or any securities containing options or rights to acquire
any shares of Common Stock or any securities convertible or exchangeable into
shares of Common Stock to Citicorp Venture Capital Ltd., Sterling or any of
their respective Affiliates, the Company will first offer to each of the other
Investors a portion of the number or amount of such securities
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proposed to be sold in any such transaction or series of related transactions
equal to the product of (i) the percentage each such Investor and such
Investor's Permitted Transferees (except a Permitted Transferee by virtue of
Section 3.4(b)(iv)) holds of all shares of Common Stock then held by the
Restricted Investors and (ii) the number of shares represented by the securities
proposed to be issued and sold by the Company in any such transaction or series
of related transactions, all for the same price and upon the same terms and
conditions as the securities that are being offered to Citicorp Venture Capital
Ltd., Sterling and their respective Affiliates in such transaction or series of
transactions; provided, however, that if the aggregate amount of such securities
to be sold in any such transaction or series of transactions represents more
than 10% of the outstanding Common Stock after giving effect to such transaction
or series of transactions and the securities being sold in such transaction or
series of transactions are not being sold pursuant to a firm commitment
underwritten public offering, then the Company shall obtain an opinion from an
investment banking firm of national reputation stating that the consideration
received by the Company is fair from a financial point of view.
(b) Notwithstanding the foregoing, the provisions of this
Section 4.6 shall not be applicable to the issuance of shares of Common Stock
(i) upon the conversion of shares of one class of Common Stock into shares of
another class, (ii) as a dividend on all the outstanding shares of Common Stock,
(iii) in any transaction in respect of a Security that is available to all
holders of such Security on a pro rata basis, (iv) in connection with grants of
stock or options to employees or directors of the Company or (v) in an offering
or sale of securities pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended.
(c) The Company will deliver or cause to be delivered to
the Investors a written notice setting forth the terms and conditions (including
the consideration per share) upon which the Investors may purchase such shares
or other securities (the "Preemptive Notice"). After receiving a Preemptive
Notice, an Investor must deliver or cause to be delivered to the Company a
written notice (the "Preemptive Reply"), within 45 days of the date of such
Preemptive Notice that such Investor agrees to purchase the shares or other
securities offered pursuant to this Section 4.6 on the date of sale to Citicorp
Venture Capital Ltd., Sterling and their respective Affiliates. If any Investor
fails to make a
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Preemptive Reply in accordance with this Section 4.6, shares or other securities
offered to such Investor in accordance with this Section 4.6 may thereafter, for
a period not exceeding six months following the expiration of such 45-day
period, be issued, sold or subjected to rights or options to Citicorp Venture
Capital Ltd., Sterling and their respective Affiliates at a price not less than
that at which they were offered to the Investors and on such other terms and
conditions no more favorable than those offered to the Investors. Any such
shares or other securities not so issued, sold or subjected to rights or options
to Citicorp Venture Capital Ltd., Sterling and their respective Affiliates
during such six-month period will thereafter again be subject to the preemptive
rights provided for in this Section 4.6.
4.7 Affiliate Transactions. So long as NSC holds any of the
Common Stock, without the prior written consent of NSC, the Company will not,
directly or indirectly, nor will it permit any of its subsidiaries, directly or
indirectly, to engage in any transaction or series of transactions (other than
pursuant to the Operating Agreements (as defined in the Recap Agreement)) with
any Person who prior to such transaction or series of transactions is a holder
of 15% or more of the Common Stock or an Affiliate of any such holder (other
than the Company and its subsidiaries) except (i) on terms and conditions that
are no less favorable to the Company or its subsidiaries, as the case may be,
than the terms and conditions which the Company or such subsidiary, as the case
may be, could obtain in a transaction with an unaffiliated Person on an arm's
length basis, and (ii) if such transaction involves an amount in excess of $1.0
million, such transaction has been approved by a majority of the disinterested
members of the board of directors of the Company. The restrictions contained in
this Section 4.7 shall not prohibit: (i) the payment of any dividends,
principal, interest or other amounts in respect of any of the Securities in
accordance with their terms; (ii) the prepayment or redemption of any of the
Securities in accordance with their terms; (iii) the grant of stock options or
similar rights to employees and directors of the Company in the ordinary course
of business and pursuant to plans approved by the Board of Directors; (iv) fees,
compensation, expense reimbursements or employee benefit arrangements paid to
and indemnity provided for the benefit of directors, officers or employees of
the Company or any direct or indirect subsidiary of the Company in the ordinary
course of business and (v) any transaction in respect of a Security that is
available to all holders of such Security on a pro rata basis.
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4.8 Subsequent Management Investors. (a) In the
event that the Company issues and sells shares of Class A Stock and Preferred
Stock to any member of management of the Business (hereinafter referred to as a
"Subsequent Management Investor"), the Company shall have the right and option
at any time and from time to time to repurchase from Sterling such number of
shares of Class A Stock and Preferred Stock, as the Company shall designate to
be sold to such Subsequent Management Investor at a purchase price equal to the
price paid by Management Investors for such Class A Stock and Preferred Stock at
the time of issuance of such Class A Stock and Preferred Stock (but in no event
at a price less than $.50 per share of Class A Common Stock, and $1,000 per
share of Preferred Stock plus accrued and unpaid dividends thereon through the
date of repurchase) multiplied by the number of shares of Class A Stock and
Preferred Stock, respectively, repurchased from Sterling. The number of shares
of Securities to be repurchased pursuant to this Section 4.8 shall not exceed
108,880 shares of Common Stock and 224 shares of Preferred Stock, and any
repurchase of such Securities shall be made pro rata between Class A Stock and
Preferred Stock in proportion to the aggregate number of shares of Class A Stock
and Preferred Stock subject to the repurchase right contained in this Section
4.8. Subsequent Management Investors shall be required to purchase Securities in
the same proportion of Class A Stock to Preferred Stock and to agree to be bound
by this Agreement as Management Investors including but not limited to the
provisions of Article VI hereof with respect to 10/17 of such shares of Class A
Stock.
(b) Such repurchase shall be exercised by written
notice to Sterling signed by an officer of the Company on behalf of the Company
or by its designee(s), as the case may be. Such notice shall set forth the
number of shares of Class A Stock and Preferred Stock desired to be purchased
and shall set forth a time and place of closing which shall be no earlier than
10 days and no later than 60 days after the date such notice is sent. At such
closing, Sterling shall deliver the certificates evidencing the number of shares
of Class A Stock and Preferred Stock to be repurchased by the Company and/or its
designee(s), accompanied by stock powers duly endorsed in blank or duly executed
instruments of transfer, and any other documents that are necessary to transfer
to the Company and/or its designee(s) good title to such of the shares of Class
A Stock and Preferred Stock to be transferred, free and clear of all pledges,
security interests, liens, charges, encumbrances, equities, claims and options
of whatever nature other than those imposed under this Agreement, and
concurrently with such delivery,
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the Company and/or its designee(s) shall deliver to Sterling the full amount of
the repurchase price for such shares of Class A Stock and Preferred Stock in
cash by certified or bank cashier's check.
ARTICLE V
CORPORATE ACTIONS
5.1 Certificate of Incorporation and Bylaws. Each
Investor has reviewed the Certificates of Incorporation and Bylaws of each of
the Company and Xxxxxxxxx in the forms attached hereto as Exhibits X-0, X-0, X-0
and A-4, respectively, and hereby approves and ratifies the same in
substantially the form attached.
5.2 Directors and Voting Agreements. (a) Each
Restricted Investor agrees that it shall take, at any time and from time to
time, all action necessary (including voting the Class A Common Stock owned by
him, her or it, calling special meetings of stockholders and executing and
delivering written consents) to ensure that the Board of Directors of the
Company is composed at all times of seven Persons as follows: Xxxx Xxxx (so long
as he continues to own Securities); Xxxxxx Xxxxxx (so long as he continues to
own Securities); the President of the Company if either of Xxxx Xxxx or Xxxxxx
Xxxxxx is no longer serving on the Board of Directors, if NSC so chooses, so
long as NSC continues to own Securities, one individual designated by NSC
provided that such person shall initially be either Xxxxx X. Xxxxx or Xxxxxx
Xxxxxxx (until the earlier of the second anniversary of the Closing Date or the
date upon which such person ceases to be an executive officer of NSC) and
thereafter shall be an executive officer of NSC reasonably acceptable to the
remaining directors; two individuals designated by Sterling; and the remaining
directors such independent directors, as shall be designated by Sterling (to the
extent permitted by applicable law as determined by Sterling in its sole
discretion), subject to the right of the Chief Executive Officer of the Company
to veto the election of any such independent director, provided, that in the
event that Sterling concludes that it is unable to designate, or elects not to
designate for any reason, one or more of such independent directors or the
election of any such independent director is not approved by the holders of a
majority of the outstanding shares of Class A Common Stock, such directorship(s)
shall not be filled by the remaining members of the Company's Board of Directors
but shall remain vacant until the
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election of a director designated by Sterling to fill such vacancy in accordance
with this Section 5.2.
(b) Each Investor agrees to take all necessary
action to cause the board of directors of the Company to be as set forth in
Section 5.2(a) (including, without limitation, voting or causing to be voted or
acting by written consent with respect to, all shares of Common Stock entitled
to be voted thereon now or hereafter owned or held by such Investor in favor of
such Persons) and to act itself (if a member of the board of directors) or cause
its nominee (if any) on the board of directors to vote or act by written consent
to cause the board of directors of the Company to be as set forth in Section
5.2(a).
5.3 Right to Remove Certain of the Company's
Directors. Each of Sterling and NSC, as the case may be, may request that any
director designated by it be removed (with or without cause) by written notice
to the other Investors, and, in any such event, each Investor shall promptly
consent in writing or vote or cause to be voted all shares of common stock
entitled to vote thereon now or hereafter owned or controlled by it for the
removal of such Person as a director. In the event any Person ceases to be a
director, such Person shall also cease to be a member of any committee of the
Board of Directors of the Company.
5.4 Right to Fill Certain Vacancies in Company's
Board. In the event that a vacancy is created on the Company's Board of
Directors at any time by the death, disability, retirement, resignation or
removal (with or without cause) of a director designated by Sterling or NSC, as
the case may be, or if otherwise there shall exist or occur any vacancy on the
Company's Board of Directors in a directorship subject to designation by
Sterling or NSC, as the case may be, such vacancy shall not be filled by the
remaining members of the Company's Board of Directors but each Investor hereby
agrees promptly to consent in writing or vote or cause to be voted all shares of
common stock entitled to vote thereon now or hereafter owned or controlled by it
to elect that individual designated to fill such vacancy and serve as a
director, as shall be designated by Sterling or NSC, as the case may be.
5.5 Directors of Xxxxxxxxx and Voting Agreements.
The Company shall take, and each of the Investors agrees that it shall cause the
Company to take, at any time and from time to time, all action necessary
(including voting all shares of common stock of Xxxxxxxxx owned by the Company,
calling special meetings of
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stockholders and executing and delivering written consents) to ensure that the
Board of Directors of Xxxxxxxxx is identical to the Board of Directors of the
Company.
5.6 Amendment of Certificate and Bylaws. Each
Investor agrees that it shall not consent in writing or vote or cause to be
voted any shares of Common Stock now or hereafter owned or controlled by it in
favor of any amendment, repeal, modification, alteration or rescission of, or
the adoption of any provision in the Company's Certificate of Incorporation or
Bylaws inconsistent with this Agreement or which treats any Investor differently
from any other Investor with respect to such Investor's rights in or ownership
of the Securities.
5.7 Termination of Voting Agreements. The voting
agreements in Sections 5.2, 5.3, 5.4, 5.5 and 5.6 shall terminate on the earlier
of (i) the date the Company consummates a Public Offering (as defined in Section
6.1(d)) (if requested by the underwriter with respect to such offering) and (ii)
the date when Sterling and its Permitted Transferees and their respective
Affiliates no longer own at least 15% of the issued and outstanding Common
Stock.
5.8 Officers. Each Investor approves the election
of the following officers of the Company, together with such other officers as
may be elected or appointed by the Company or its Board of Directors:
Name Position
---- --------
Xxxx X. Xxxx Chairman, President and Chief
Executive Officer
Xxxxxx X. Xxxxxx Executive Vice President and Chief
Financial Officer
Xxxxx X. Xxxxx Executive Vice President and
General Manager, Memory and
Discrete Products Group
W. Xxxxx Xxxxxxx Executive Vice President and
General Manager, Logic Products
Group
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Xxxxxxx Xxxxxx Senior Vice President, Worldwide
Sales and Marketing
Xxxxx Xxxxx Corporate Controller
Xxxxxx X. Xxxxx Executive Vice President, General
Counsel, Chief Administrative
Officer and Secretary
Xxxxxxx X. Xxxxx Treasurer
ARTICLE VI
ADDITIONAL RESTRICTIONS ON TRANSFERS OF
INCENTIVE SECURITIES HELD BY MANAGEMENT INVESTORS
6.1 Certain Definitions. The terms defined below
shall have the following meanings when used in this Article VI:
(a) "Company" means the Company and all other
entities in which the Company from time to time owns, directly or indirectly,
fifty percent (50%) or more of the stock or other securities representing
ownership therein.
(b) "Cause", when used in connection with the
termination of a Management Investor's employment with the Company, means the
Management Investor's (i) act or acts of dishonesty or criminality that, in the
good faith judgment of the Board of Directors, has had or could have an adverse
effect on the Company; (ii) the commission by the Management Investor of any act
of fraud, embezzlement or misappropriation; (iii) the material breach by the
Management Investor of any provision of a written employment agreement between
the Management Investor and the Company which is not cured within any applicable
grace period; (iv) failure by the Management Investor to take or refrain from
taking any material action, which is within the capacity of the Management
Investor, as specified in written directions of the board of directors or the
Chief Executive Officer of the Company; or (v) failure to perform such
Management Investor's duties as an employee as reasonably determined by the
Board of Directors of the Company, with the approval of the Chief Executive
Officer of the Company, acting in good faith after reasonable notice to such
employee by the Board of
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Directors of the Company and, if so recommended by the Board of Directors, after
such employee has not cured such failure after 30 days opportunity to do so.
(c) "Incentive Securities" means the shares of
Common Stock for each Management Investor designated as Incentive Securities on
Schedule I, and all other securities of the Company (or a successor to the
Company) received on account of ownership of the Incentive Securities, including
any and all incentive securities issued in connection with any merger,
consolidation, stock dividend, stock distribution, stock split, reverse stock
split, stock combination, recapitalization, reclassification, subdivision,
conversion or similar transaction in respect thereof.
(d) "Public Offering" means a successfully
completed firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act (other than a Special
Registration Statement (as defined in Section 6.3(a)(iii))) in respect of the
offer and sale of shares of Common Stock resulting in the sale by the Company
and any stockholder selling shares of Common Stock in such offering of not less
than 10% of the then outstanding shares of Common Stock (after giving effect to
such sale).
6.2 Restrictions on Transfer. In addition to the
restrictions imposed by Section 3.4 (including Section 3.4(c)), and
notwithstanding anything to the contrary contained herein, but subject to
Section 6.7 hereof, no Management Investor shall effect a Transfer of any
Incentive Securities prior to the fifth anniversary of the Closing Date other
than (i) pursuant to Section 4.4 in connection with an Approved Sale, (ii)
pursuant to Section 4.5 in connection with the exercise of "Tag-Along Rights",
(iii) pursuant to Section 6.3 in connection with the Purchase Option (as
hereinafter defined), (iv) with the consent of the Company (as evidenced by a
resolution duly adopted by at least a majority of the non-employee members of
the Company's Board of Directors), (v) to a Permitted Transferee of the
Management Investor in question or (vi) in connection with a Public Offering in
which such Management Investor is permitted to participate. In exercising the
consent and approval provided for in clause (iv), the Company may employ its
sole discretion in evaluating the nature of the proposed transferee and the
Company may impose such conditions on Transfer as it deems appropriate in its
sole discretion, including, but not limited to, requirements that the transferee
be an employee of the Company or Xxxxxxxxx and that the
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transferee purchase the Management Investor's Incentive Securities as a
"Management Investor" subject to the restrictions of this Article VI. In the
event any Transfer is authorized pursuant to clause (iv) to an employee of the
Company as a "Management Investor," such employee shall execute an agreement, in
form and substance satisfactory to the Company, pursuant to which such employee
shall agree to be bound by the terms and conditions of this Agreement, and such
other provisions as the Company may determine, and upon such execution such
employee shall be entitled to the benefit of such provisions hereof and such
other provisions as the Company determines and are set forth in such agreement.
Any purported Transfer in violation of this Agreement shall be null and void and
of no force and effect and the purported transferees shall have no rights or
privileges in or with respect to the Company. Notwithstanding the foregoing
provisions, each Management Investor agrees that he will not effect a Transfer
of any Incentive Securities prior to the lapse of such period of time following
acquisition thereof as may be required to comply with applicable securities
laws.
For the purposes of this Agreement, the
"Permitted Transferees" of a Management Investor shall be as set forth in
Section 3.4(b)(i), (ii), or (vii); provided, that, as a condition to a Transfer
to any Permitted Transferee such Permitted Transferee shall agree, in writing
and in form and substance reasonably satisfactory to the Company, to become
bound, and thereby shall become bound, by all the terms of this Agreement
applicable to the Management Investor transferring such Incentive Securities.
The Termination Date (as hereinafter defined) for a Permitted Transferee shall
be the Termination Date with respect to the Management Investor who first
acquired the Incentive Securities held by such Permitted Transferee pursuant to
this Agreement.
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6.3 Purchase Option.
(a) General Terms. Subject to Section 3.4(c),
in the event that on or prior to the fifth anniversary of the Closing Date, any
individual Management Investor shall cease to be employed by the Company or
Xxxxxxxxx for any reason (including, but not limited to, death, temporary or
permanent disability, retirement at age 65 or more under the Company's or
Xxxxxxxxx'x normal retirement policies, resignation or termination by the
Company or Xxxxxxxxx, as the case may be, with or without Cause), other than by
reason of a leave of absence approved by the Company or Xxxxxxxxx, as the case
may be, such Management Investor (or his heirs, executors, administrators,
transferees, successors or assigns) shall give prompt notice to the Company of
such termination (except in the case of termination by the Company with or
without Cause), and the Company, or one or more designee(s) selected by a
majority of the members of the Board of Directors, shall have the right and
option at any time within 90 days after the later of the effective date of such
termination of employment (the "Termination Date") or the date of the Company's
receipt of the aforesaid notice, to purchase from such Management Investor, or
his heirs, executors, administrators, transferees, successors or assigns, as the
case may be, any or all of the Incentive Securities then owned by such
Management Investor (and his Permitted Transferees), including any Incentive
Securities distributable (on account of such cessation of employment) to such
individual Management Investor from a Trust Management Investor, at a purchase
price equal to the Option Purchase Price (as hereinafter defined). The Company
or its designee(s) shall give notice to the terminated Management Investor (or
his heirs, executors, administrators, transferees, successors or assigns) of its
intention to purchase Incentive Securities at any time not later than 90 days
after the Termination Date. (The right of the Company and its designee(s) set
forth in this Section 6.3 to purchase a terminated Management Investor's
Incentive Securities is hereinafter referred to as the "Purchase Option"). As a
condition to purchasing a Management Investor's Incentive Securities pursuant to
this Section 6.3, any designee(s) selected by the Board of Directors must agree
in writing to assume the Company's obligations under Section 6.3(a)(iii). A
designee's satisfaction of such obligation will relieve the Company of its
obligations under Section 6.3(a)(iii) with regard to the particular terminated
Management Investor and such Management Investor shall thereafter have no
recourse against the Company under Section 6.3(a)(iii).
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(i) Exercise of Purchase Option. The
Purchase Option shall be exercised by written notice to the terminated
Management Investor (or his heirs, executors, administrators, transferees,
successors or assigns) signed by an officer of the Company on behalf of the
Company or by its designee(s), as the case may be. Such notice shall set forth
the number of Incentive Securities desired to be purchased and shall set forth a
time and place of closing which shall be no earlier than 10 days and no later
than 60 days after the date such notice is sent. At such closing, the seller
shall deliver the certificates evidencing the number of Incentive Securities to
be purchased by the Company and/or its designee(s), accompanied by stock powers
duly endorsed in blank or duly executed instruments of transfer, and any other
documents that are necessary to transfer to the Company and/or its designee(s)
good title to such of the Incentive Securities to be transferred, free and clear
of all pledges, security interests, liens, charges, encumbrances, equities,
claims and options of whatever nature other than those imposed under this
Agreement, and concurrently with such delivery, the Company and/or its
designee(s) shall deliver to the seller the full amount of the Option Purchase
Price for such Incentive Securities in cash by certified or bank cashier's
check.
(ii) Option Purchase Price. If the
Management Investor shall be terminated by the Company without Cause or shall
cease to be employed by the Company or Xxxxxxxxx by reason of death, normal
retirement at age 65 or more under the Company's or Xxxxxxxxx'x normal
retirement policies, or temporary or permanent disability, the "Option Purchase
Price" for the Incentive Securities to be purchased from such Management
Investor pursuant to the Purchase Option (such number of Incentive Securities
being the "Purchase Number") shall equal the price calculated as set forth in
the table below opposite the applicable Termination Date of such Management
Investor:
Option
If the Termination Date Occurs: Purchase Price
------------------------------- --------------
On or prior to the first Adjusted Cost Price
anniversary of the Closing multiplied by
Date 80% of the Purchase
Number, plus Fair Market
Value Price multiplied by 20% of
the Purchase Number
33
After the first anniversary of the Closing Date, and on or prior to the second
anniversary of the Closing Date
Adjusted Cost Price multiplied by 60% of the Purchase Number, plus Fair Market
Value Price multiplied by 40% of the Purchase Number
After the second anniversary of the Closing Date, and on or prior to the third
anniversary of the Closing Date
Adjusted Cost Price multiplied by 40% of the Purchase Number, plus Fair Market
Value Price multiplied by 60% of the Purchase Number
After the third anniversary of the Closing Date, and on or prior to the fourth
anniversary of the Closing Date
Adjusted Cost Price multiplied by 20% of the Purchase Number, plus Fair Market
Value Price multiplied by 80% of the Purchase Number
After the fourth anniversary of the Closing Date and on or prior to the fifth
anniversary of the Closing Date
Fair Market Value Price multiplied by the Purchase Number
Notwithstanding anything to the contrary contained
herein, if the Management Investor shall cease to be employed by the Company or
Xxxxxxxxx for any reason other than those set forth in the first sentence of
this Section 6.3(a)(ii) (including, but not limited to, any voluntary
termination of employment by the Management Investor or any termination for
Cause), the Option Purchase Price for all Incentive Securities to be purchased
from the Management Investor (and his Permitted Transferees) pursuant to the
Purchase Option shall equal the Adjusted Cost Price multiplied by the Purchase
Number.
As used herein:
(A) "Adjusted Cost Price" for each share of Incentive
Securities (including any accrued dividends thereon) means the original purchase
price per share for such Securities as set forth in Article I (including any
Incentive Securities which have been converted into other shares of capital
stock of the Company, and adjusted for any stock dividend payable upon, or
subdivision or combination of, the Securities) plus interest at a rate of 6% per
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34
annum calculated from the date of purchase to the date of the closing of the
exercise of the Purchase Option;
(B) "Fair Market Value Price" means for each share of
Common Stock, (i) the difference between (x) the sum of (A) 3.8 times EBITDA and
(B) the exercise price of any securities exercisable for shares of Common Stock
and (y) the sum of (A) the amount of all outstanding Indebtedness of the Company
and its subsidiaries and (B) the amount that would be required to be paid in
redemption of any outstanding preferred stock of the Company, all as reflected
in the Company's consolidated financial statements as of the end of the fiscal
quarter immediately preceding the Termination Date (as hereinafter defined),
divided by (ii) the number of shares of Common Stock outstanding (adjusted to
reflect the pro forma exercise in full of any dilutive securities, regardless of
whether such securities are exercisable at the time or would otherwise satisfy
any requirements under generally accepted accounting principles as they relate
to the determination of "dilutive securities"); provided, however, that in no
event shall the Fair Market Value Price be less than the Adjusted Cost Price;
and
(C) "EBITDA" and "Indebtedness" shall have the
respective meanings set forth in the Indenture dated March 11, 1997 by and among
the Company, Xxxxxxxxx and United States Trust Company of New York, as in effect
on the date hereof.
(iii) Adjustments to Option Purchase Price. If
the Company or its designee exercises the Purchase Option with respect to any or
all of the Incentive Securities of any Management Investor whose employment with
the Company was terminated by the Company without Cause (the "Called Shares"),
and if within twelve months after the closing pursuant to such exercise of the
Purchase Option by the Company or its designee:
(A) the Company is merged into, consolidated with or
otherwise combined with or acquired by another Person, or
there is a liquidation of the Company, or there is a
Public Offering (a "Subsequent Offering") of the Company's
Common Stock pursuant to an effective registration
statement under the Securities Act (other than a Special
Registration Statement), and
(B) the per share consideration received by the
stockholders of the Company in such transaction, or the
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35
per share net proceeds received for the Company's Common
Stock in the Subsequent Offering, as the case may be (in
each case after being adjusted downward to reflect what
the per share consideration or per share net offering
proceeds, as the case may be, would have been had the
Shares of such terminated Management Investor purchased by
the Company or its designee pursuant to the Purchase
Option been outstanding on the date of the closing of such
transaction or Subsequent Offering) exceeds the Fair
Market Value Price used in calculating the Option Purchase
Price with respect to shares of Common Stock pursuant to
the exercise of the Purchase Option,
then such Management Investor shall be entitled to receive from the Company or
its designee an amount per Called Share equal to such excess multiplied by the
applicable Adjusted Fair Value Price Percentage (as hereinafter defined) within
30 days after the closing of any such transaction or Subsequent Offering.
"Adjusted Fair Value Price Percentage" means (i) 20% plus (ii) 20% multiplied by
the number of full years elapsed between the Closing Date and the Termination
Date for such Management Investor.
As used herein:
"Special Registration Statement" means (i) a
registration statement on Forms S-8 or S-4 or any similar or successor form or
any other registration statement relating to an exchange offer or an offering of
securities solely to the Company's employees or security holders or (ii) a
registration statement registering a Unit Offering; and
"Unit Offering" shall mean a Public Offering of a
combination of debt and equity securities of the Company in which (i) not more
than 10% of the gross proceeds received from the sale of such securities is
attributed to such equity securities, and (ii) after giving effect to such
offering, the Company does not have a class of equity securities required to be
registered under the Securities Exchange Act of 1934, as amended.
(b) Company's Right of First Refusal. In the event
that, on or prior to the fifth anniversary of the Closing Date, (i) a Management
Investor is no longer employed by the Company; (ii) the Company or its designee
has not exercised the Purchase
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36
Option with respect to all of such Management Investor's Incentive Securities;
and (iii) the Management Investor thereafter proposes to sell any or all of such
Management Investor's Incentive Securities to a third party in a bona fide
transaction, the Management Investor may not Transfer such Incentive Securities
without first offering to sell such Incentive Securities to the Company pursuant
to this Section 6.3(b).
The Management Investor shall deliver a written
notice (a "Sale Notice") to the Company describing in reasonable detail the
Incentive Securities being offered, the name of the offeree, the purchase price
requested and all other material terms of the proposed Transfer. Upon receipt of
the Sale Notice, the Company, or a designee selected by a majority of the
non-employee members of the Board of Directors of the Company, shall have the
right and option to purchase all, but not less than all, of the Incentive
Securities being offered at the price and on the terms of the proposed Transfer
set forth in the Sale Notice. Within 30 days after receipt of the Sale Notice,
the Company shall notify such Management Investor whether or not it wishes to
purchase all of the offered Incentive Securities.
If the Company elects to purchase the offered
Incentive Securities, the closing of the purchase and sale of such Incentive
Securities shall be held at the place and on the date established by the Company
in its notice to the Management Investor in response to the Sale Notice, which
in no event shall be less than 10 or more than 60 days from the date of such
notice. In the event that the Company does not elect to purchase all the offered
Incentive Securities, the Management Investor may, subject to the other
provisions of this Agreement, Transfer the offered Incentive Securities to the
offeree specified in the Sale Notice at a price no less than the price specified
in the Sale Notice and on other terms no more favorable to the transferee(s)
thereof than specified in the Sale Notice during the 180-day period immediately
following the last date on which the Company could have elected to purchase the
offered Incentive Securities. Any such Incentive Securities not transferred
within such 180-day period will be subject to the provisions of this Section
6.3(b) upon subsequent Transfer.
6.4 Involuntary Transfers. In the event that the
Incentive Securities owned by any Management Investor shall be subject to sale
or other Transfer (the date of such sale or transfer shall hereinafter be
referred to as the "Transfer Date") prior to the fifth anniversary of the
Closing Date by reason of
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37
(i) bankruptcy or insolvency proceedings, whether voluntary or involuntary, or
(ii) distraint, levy, execution or other involuntary Transfer, then such
Management Investor shall give the Company written notice thereof promptly upon
the occurrence of such event stating the terms of such proposed Transfer, the
identity of the proposed transferee, the price or other consideration, if
readily determinable, for which the Incentive Securities are proposed to be
transferred, and the number of Incentive Securities to be transferred. After its
receipt of such notice or, failing such receipt, after the Company otherwise
obtains actual knowledge of such a proposed Transfer, the Company, or a designee
selected by a majority of the non-employee members of the Board of Directors of
the Company, shall have the right and option to purchase all, but not less than
all of such Incentive Securities which right shall be exercised by written
notice given by the Company to such proposed transferor within 60 days following
the Company's receipt of such notice or, failing such receipt, the Company's
obtaining actual knowledge of such proposed Transfer. Any purchase pursuant to
this Section 6.4 shall be at the price and on the terms applicable to such
proposed Transfer. If the nature of the event giving rise to such involuntary
Transfer is such that no readily determinable consideration is to be paid for
the Transfer of the Incentive Securities, the price to be paid by the Company
shall be the Option Purchase Price that would have been applicable hereunder had
the Management Investor incurred a Termination Date as of the date of such
proposed Transfer for the Incentive Securities. The closing of the purchase and
sale of Incentive Securities shall be held at the place and the date to be
established by the Company, which in no event shall be less than 10 or more than
60 days from the date on which the Company gives notice of its election to
purchase the Incentive Securities. At such closing, the Management Investor
shall deliver the certificates evidencing the number of Incentive Securities to
be purchased by the Company, accompanied by stock powers duly endorsed in blank
or duly executed instruments of transfer, and any other documents that are
necessary to transfer to the Company good title to such of the securities to be
transferred, free and clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims and options of whatever nature other than those
imposed under this Agreement, and concurrently with such delivery, the Company
shall deliver to the Management Investor the full amount of the purchase price
for such Incentive Securities in cash by certified or bank cashier's check.
6.5 Purchaser Representative. If the Company or any
Investor enters into any negotiation or transaction for which Rule
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38
506 (or any similar rule then in effect) promulgated by the Securities and
Exchange Commission under the Securities Act may be available with respect to
such negotiation or transaction (including a merger, consolidation or other
reorganization), each Management Investor will, at the request of the Company,
appoint a purchaser representative (as such term is defined in Rule 501(h)
promulgated by the Securities and Exchange Commission under the Securities Act)
reasonably acceptable to the Company. If any Management Investor appoints the
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if any Management Investor declines
to appoint the purchaser representative designated by the Company such
Management Investor will appoint another purchaser representative (reasonably
acceptable to the Company), and such Management Investor will be responsible for
the fees of the purchaser representative so appointed.
6.6 Section 83(b) Elections. Each individual
Management Investor shall make the election to include in his income, in the
year he purchases the Incentive Securities, the excess, if any, of the fair
market value of the Incentive Securities at that time over the purchase price
per share, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended, in the manner and within the time period specified by the regulations
promulgated thereunder.
6.7 Termination of Restrictions on Incentive
Securities. The restrictions contained in Sections 6.1 through 6.4 shall
terminate at such time as the Company has consummated a Public Offering.
ARTICLE VII
REGISTRATION RIGHTS
The Investors shall have registration rights with respect
to the Shares as set forth in the Registration Rights Agreement attached hereto
as Exhibit B. Each of the Investors agrees not to effect any public sale or
distribution of any securities of the Company during the periods specified in
the Registration Rights Agreement, except as permitted by the Registration
Rights Agreement, and each such Investor agrees to be bound by the rights of
priority to participate in offerings as set forth therein.
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39
ARTICLE VIII
DEFINITIONS
As used in this Agreement, the following terms shall have
the following meanings:
Term As Defined in Section
---- ---------------------
Adjusted Cost Price ............................................................................... 6.3(a)(ii)(A)
Adjusted Fair Value Price Percentage .............................................................. 6.3(a)(iii)
Affiliate ......................................................................................... 3.4(d)
Agreement ......................................................................................... Recital
Approved Sale ..................................................................................... 4.4(a)
Called Shares ..................................................................................... 6.3(a)(iii)
Cause ............................................................................................. 6.1(b)
Class A Common Stock .............................................................................. Recital
Class B Common Stock .............................................................................. Recital
Closing Date ...................................................................................... 1.3
Closing ........................................................................................... 1.3
Common Stock ...................................................................................... Recital
Company ........................................................................................... Recital and 6.1(a)
Escrow Amount ..................................................................................... 4.5(a)(vi)
Escrow Notice ..................................................................................... 4.5(a)(vi)
EBITDA............................................................................................. 6.3(a)(ii)(C)
Xxxxxxxxx ......................................................................................... Recital
Fair Market Value Price ........................................................................... 6.3(a)(ii)(B)
Holders ........................................................................................... 4.5(a)(i)
Incentive Securities............................................................................... 6.1(c)
Investors ......................................................................................... Recital
Management Investors .............................................................................. Recital
Management Securities ............................................................................. 1.1
NSC................................................................................................ Recital
Observers ......................................................................................... 4.1
Option Purchase Price ............................................................................. 6.3(a)(ii)
Permitted Transferee .............................................................................. 3.4(b) and 6.2
Preemptive Notice.................................................................................. 4.6(c)
Preemptive Reply................................................................................... 4.6(c)
Preferred Stock.................................................................................... Recital
Public Offering ................................................................................... 6.1(d)
Purchase Option ................................................................................... 6.3(a)(i)
Purchase Number ................................................................................... 6.3(a)(ii)
Recap Agreement ................................................................................... Recital
Recap Closing...................................................................................... 1.1
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Regulatory Problem ................................................................................ 4.3
Restricted Investor................................................................................ 3.4(a)
Sale Notice ....................................................................................... 6.3(b)
Securities Act .................................................................................... 3.2(a)
Securities ........................................................................................ Recital
Seller ............................................................................................ 4.5(a)(i)
Seller's Notice ................................................................................... 4.5(a)(ii)
Shares ............................................................................................ Recital
Special Registration Statement .................................................................... 6.3(a)(iii)
Sterling........................................................................................... Recital
Subsequent Offering ............................................................................... 6.3(a)(iii)(A)
Tag-Along Notice .................................................................................. 4.5(a)(ii)
Termination Date .................................................................................. 6.3(a)
Transfer Date ..................................................................................... 6.4
Transfer .......................................................................................... 3.4(a)
Unit Offering ..................................................................................... 6.3(a)(iii)
"Person" means and includes any individual, corporation,
partnership, firm, association, joint venture, joint stock company, trust or
other entity, or any government or regulatory administrative or political
subdivision or agency, department or instrumentality thereof.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment and Modification. This Agreement may be amended
or modified, or any provision hereof may be waived, provided that such
amendment, modification or waiver is set forth in a writing executed by (i) the
Company, (ii) Sterling (so long as Sterling and its Permitted Transferees own in
the aggregate at least 25% of the outstanding Common Stock on a fully diluted
basis) and (iii) the holders of a majority of the outstanding Common Stock on a
fully diluted basis (including Shares owned by Sterling and its Affiliates) held
by the Investors; provided, however that (x) the provisions of this Agreement
which affect NSC's rights or obligations hereunder cannot be amended, modified
or waived, unless NSC also executes such amendment, modification or waiver and
(y) without the approval of the holders of a majority of the outstanding Common
Stock then held by Management Investors, (A) the provisions of this Agreement
cannot be amended to treat Management Investors differently than the other
Investors and (B) the provisions of Sections 4.5, 4.6, 4.7, 5.2 and 9.1 and
Article VI of
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41
this Agreement may not be amended or modified to the detriment of Management
Investors. No course of dealing between or among any Persons having any interest
in this Agreement will be deemed effective to modify, amend or discharge any
part of this Agreement or any rights or obligations of any Person under or by
reason of this Agreement. If any amendment is made to this Agreement without the
consent of NSC, the Company shall promptly notify NSC of such amendment.
9.2 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements set forth in this
Agreement shall survive the Closing.
9.3 Successors and Assigns; Entire Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and permitted assigns and executors, administrators and heirs of each
party hereto. This Agreement sets forth the entire agreement and understanding
among the parties and supersedes all prior agreements and understandings,
written or oral, relating to the subject matter of this Agreement.
9.4 Separability. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remaining provisions shall remain in full force and effect unless deletion of
such provision causes this Agreement to become materially adverse to any party,
in which event the parties shall use reasonable efforts to arrive at an
accommodation which best preserves for the parties the benefits and obligations
of the offending provision.
9.5 Notices. All notices provided for or permitted hereunder
shall be made in writing by hand-delivery, registered or certified first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery to the
other party at the following addresses (or at such other address as shall be
given in writing by any party to the others):
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42
If to the Company to:
FSC Semiconductor Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
with required copies to:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Xxxxx X. Xxxx and
Xxxx X. ("Chip") Xxxxxx
Telecopy: (000) 000-0000
and
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: G. Xxxxxx X'Xxxxxxx
Telecopy: (000) 000-0000
If to Sterling, to:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Xxxxx X. Xxxx and
Xxxx X. ("Chip") Xxxxxx
Telecopy: (000) 000-0000
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43
with a required copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: G. Xxxxxx X'Xxxxxxx
Telecopy: (000) 000-0000
If to NSC to:
National Semiconductor Corporation
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
with a required copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
If to the Management Investors or any of them, to
their addresses as listed in the books of the Company.
All such notices shall be deemed to have been duly given:
when delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal law of Delaware, without giving effect
to principles of conflicts of law.
9.7 Headings. The headings preceding the text of the sections
and subsections of this Agreement are for convenience of reference only and
shall not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect.
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44
9.8 Counterparts. This Agreement may be executed in two or
more counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
9.9 Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
9.10 Termination. Unless sooner terminated in accordance with
its terms, this Agreement shall terminate on the tenth anniversary of the
Closing Date.
9.11 Remedies. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The parties
agree that the provisions of this Agreement shall be specifically enforceable,
it being agreed by the parties that the remedy at law, including monetary
damages, for breach of such provision will be inadequate compensation for any
loss and that any defense in any action for specific performance that a remedy
at law would be adequate is waived.
9.12 Party No Longer Owning Securities. If a party hereto
ceases to own any Securities, such party will no longer be deemed to be an
Investor or Management Investor for purposes of this Agreement.
9.13 No Effect on Employment. Nothing herein contained shall
confer on any Management Investor the right to remain in the employ of the
Company or any of its subsidiaries or Affiliates.
9.14 Pronouns. Whenever the context may require, any pronouns
used herein shall be deemed also to include the corresponding neuter, masculine
or feminine forms.
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45
IN WITNESS WHEREOF, the parties hereto have executed this
Securities Purchase and Holders Agreement the day and year first above written.
FSC SEMICONDUCTOR CORPORATION
By:________________________________
Its:_______________________________
STERLING HOLDING COMPANY, LLC
By:________________________________
Its:_______________________________
NATIONAL SEMICONDUCTOR CORPORATION
By:________________________________
Its:_______________________________
TRUST MANAGEMENT INVESTOR
By:________________________________
Its: Trustee
MANAGEMENT INVESTORS:
___________________________________
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