STOCKHOLDERS AGREEMENT dated as of August 17, 1999 (this
"Agreement"), among LUCENT TECHNOLOGIES INC., a Delaware
corporation ("Parent"), and the individuals and other parties
listed on Schedule A attached hereto (each, a "Stockholder"
and, collectively, the "Stockholders").
WHEREAS Parent, Dallas Merger Inc., a Massachusetts corporation and
a wholly owned subsidiary of Parent ("Sub"), and Excel Switching Corporation,
a Massachusetts corporation (the "Company"), propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement"; terms used but not defined
herein shall have the meanings set forth in the Merger Agreement), providing
for, among other things, the merger of Sub with and into the Company, upon the
terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS each Stockholder owns the number of shares of capital stock
of the Company set forth opposite such Stockholder's name on Schedule A
attached hereto (such shares of capital stock of the Company, together with
any other shares of capital stock of the Company acquired by such Stockholder
after the date hereof and during the term of this Agreement (including through
the exercise of any stock options, warrants or similar instruments), being
collectively referred to herein as the "Subject Shares"); and
WHEREAS as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that each Stockholder enter into this
Agreement.
NOW, THEREFORE, to induce Parent to enter into, and in consideration
of its entering into, the Merger Agreement, and in consideration of the
premises and the representations, warranties and agreements contained herein,
the parties hereto agree as follows:
1. Agreement to Vote Shares. Each Stockholder agrees during the term
of this Agreement to vote, or cause to be voted, its Subject Shares, in person
or by proxy, in favor of the Merger, the adoption and approval of the Merger
Agreement and the approval of the transactions contemplated by the Merger
Agreement at every meeting of the stockholders of the Company at which such
matters are considered and at every adjournment thereof.
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2. Grant of Irrevocable Proxy. Each Stockholder hereby irrevocably
grants to, and appoints, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx and any other
individual who shall hereafter be designated by Parent, and each of them, such
Stockholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of such Stockholder, to vote, or cause to
be voted, such Stockholder's Subject Shares, or grant a consent or approval in
respect of such Subject Shares, at any meeting of stockholders of the Company
or at any adjournment thereof or in any other circumstances upon which their
vote, consent or other approval is sought, in favor of the Merger, the
adoption and approval of the Merger Agreement and the approval of the
transactions contemplated by the Merger Agreement.
3. No Other Grant of Proxy. Each Stockholder will not, directly or
indirectly, grant any proxies or powers of attorney with respect to its
Subject Shares to any person in connection with its vote, consent or other
approval sought, in favor of the Merger, the adoption and approval of the
Merger Agreement and the approval of the transactions contemplated by the
Merger Agreement, other than as set forth in Section 2.
4. Transfers. Other than this Agreement, each Stockholder will not,
nor will such Stockholder permit any entity under such Stockholder's control
to, sell, transfer, pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or consent to any Transfer of, any Subject Shares
or any interest therein or enter into any contract, option or other agreement
or arrangement (including any profit sharing or other derivative arrangement)
with respect to the Transfer of, any Subject Shares or any interest therein to
any person, unless prior to any such Transfer the transferee of such Subject
Shares agrees to be subject to the provisions of this Agreement.
5. No Voting Trusts. Each Stockholder agrees that it will not enter
into any voting trust or other arrangement or agreement, or agree, in any
manner, with respect to its vote, consent or other approval sought, in favor
of the Merger, the adoption and approval of the Merger Agreement and the
approval of the transactions contemplated by the Merger Agreement (and if
entered into or executed, such voting trust or other arrangement or agreement
shall not be effective).
6. No Solicitation. Until the Merger is consummated or the Merger
Agreement is terminated, each Stockholder shall not, nor shall it permit any
investment
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banker, attorney or other advisor or representative of such Stockholder to,
directly or indirectly through another person, solicit, initiate, encourage or
otherwise facilitate any Takeover Proposal.
7. Affiliate Agreement. (a) If, at the time the Merger Agreement is
submitted for approval to the stock holders of the Company, a Stockholder is
an "affiliate" of the Company for purposes of Rule 145 under the Securities
Act or for purposes of qualifying the Merger for pooling of interests
accounting treatment under Opinion 16 of the Accounting Principles Board and
applicable SEC rules and regulations, such Stockholder shall deliver to Parent
at least 30 days prior to the Closing a written agreement substantially in the
form attached as Exhibit A to the Merger Agreement.
(b) Each Stockholder shall use reasonable efforts to cause the
transactions contemplated by the Merger Agreement, including the Merger, to be
accounted for as a pooling of interests transaction under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations. Each
Stockholder agrees that it shall take no action that would cause such
accounting treatment not to be obtained.
8. Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to
Parent in respect of himself or itself as follows:
(a) Authority. Such Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by such Stockholder and constitutes a valid and binding obligation
of such Stockholder enforceable in accordance with its terms. The execution
and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time or both) under any provision of, any trust agreement,
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or regulation applicable
to such Stockholder or to such Stockholder's property or assets. Except for
(i) such filings under the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated hereby and (ii) informational
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filings with the SEC, no consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required
by or with respect to such Stockholder in connection with the execution and
delivery of this Agreement or the consummation by such Stockholder of the
transactions contemplated hereby.
(b) The Subject Shares. Such Stockholder has good and marketable
title to the Subject Shares, free and clear of all Liens.
9. Representations and Warranties of Parent. Parent hereby
represents and warrants to each Stockholder that Parent has all requisite
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Parent, and the consummation of the transactions contemplated
hereby, has been duly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly executed and delivered by Parent and
constitutes a valid and binding obligation of Parent enforceable in accordance
with its terms.
10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled, without the
posting of any bond, to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any federal court located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which they are
entitled at law or in equity, and neither party will oppose the granting of
such relief on the basis that the other party has an adequate remedy at law.
11. Term and Termination. Subject to Section 16(f), the term of this
Agreement shall commence on the date hereof and shall terminate upon the
earlier of (i) the Effective Time and (ii) the date that is ten Business Days
after the date on which the Merger Agreement is terminated in accordance with
its terms. No such termination of this Agreement shall relieve any party
hereto from any liability for breach of this Agreement prior to termination.
12. Certain Events. Each Stockholder agrees that this Agreement and
the obligations hereunder shall attach to such Stockholder's Subject Shares
and shall be binding upon
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any Person to which legal or beneficial ownership of such Subject Shares shall
pass, whether by operation of law or otherwise, including such Stockholder's
heirs, guardians, administrators or successors. In the event of any stock
split, stock dividend, merger, reorganization, recapitaliza tion or other
change in the capital structure of the Company affecting the Subject Shares,
or the acquisition of additional shares of the Company's capital stock by such
Stockholder, the number of Subject Shares listed on Schedule A beside the name
of such Stockholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of the Company's
capital stock issued to or acquired by such Stockholder.
13. Stockholder Capacity. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes
(or shall be deemed to have made) any agreement or understanding herein in his
or her capacity as such director or officer. Without limiting the generality
of the foregoing, each Stockholder signs solely in its or his capacity as the
record and/or beneficial owner, as applicable, of such Stockholder's Subject
Shares and nothing herein shall limit or affect any actions taken by such
Stockholder (or a designee of such Stockholder) in his or her capacity as an
officer or director of the Company in exercising his or her rights under the
Merger Agreement.
14. Entire Agreement; No Third Party Beneficiaries; Amendment;
Waiver. This Agreement (including the documents and instruments referred to
herein) (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. This
Agreement may not be amended, supplemented or modified, and no provisions
hereof may be modified or waived, except by an instrument in writing signed by
each party to be charged. No waiver of any provisions hereof by any party
shall be deemed a waiver of any other provisions hereof by any such party, nor
shall any such waiver be deemed a continuing waiver of any provision hereof by
such party.
15. Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be in writing and
shall be deemed to have been duly given if mailed, by first class or
registered mail, three business days after deposit in the United States Mail,
or if telexed or telecopied, sent by telegram, or
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delivered by hand or reputable overnight courier, when confirmation is
received, in each case as follows:
If to the Stockholders, to the addresses listed on Schedule A hereto;
If to Parent, in accordance with Section 8.02 of the Merger Agreement;
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
16. Miscellaneous. (a) When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
(b) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws.
(c) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner and to the
end that the transactions contemplated hereby are fulfilled to the extent
possible.
(d) This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more of the counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that each
party need not sign the same counterpart.
(e) This Agreement shall not be assigned by any Stockholder, on the
one hand, without the prior written consent of Parent, or by Parent, on the
other hand, without the prior written consent of the Stockholders, except that
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Parent may assign, in its sole discretion, any or all of its rights, interests
and obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent; provided that notwithstanding such assignment, Parent shall remain
liable for performance of its obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
(f) The obligations of the Stockholders set forth in this Agreement
shall not be effective or binding upon the Stockholders until after such time
as the Merger Agreement is executed and delivered by Parent, Sub and the
Company.
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(g) Each Stockholder agrees to take, or cause to be taken, all
actions, and to do, or cause to be done, and assist and cooperate with the
other Stockholders in doing, all things necessary, proper or advisable to
cause a Stockholder Meeting to be held as promptly as practicable after the
date hereof.
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by
its officer thereunto duly authorized and each Stockholder has signed this
Agreement, all as of the date first written above.
LUCENT TECHNOLOGIES INC.,
by
/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President-Law
& Secretary
/s/Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx
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THE XXXXXXX FAMILY LIMITED
PARTNERSHIP,
by Xxxxxx X. Xxxxxxx, its
General Partner
/s/Xxxxxx X. Xxxxxxx
------------------------------
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SCHEDULE A
Name and Number of Percentage of
Address of Each Outstanding Voting Power of
Stockholder Shares Owned the Company
Xxxxxx X. Xxxxxxx 23,021,310 62.3%
The Xxxxxxx Family Limited Partnership 4,191,840 11.3%
