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Exhibit 2
SAFEGUARD STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of February 16, 1998 (this "Agreement")
by the undersigned stockholder (the "Stockholder") of Coherent
Communications Systems Corporation, a Delaware corporation (the
"Company"), for the benefit of Tellabs, Inc., a Delaware corporation
("Parent").
WHEREAS, Parent, Cardinal Merger Co., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Sub"), and the Company are entering
into an Agreement and Plan of Merger, dated as of February 16, 1998 (the
"Merger Agreement"), whereby, upon the terms and subject to the
conditions set forth in the Merger Agreement, each issued and
outstanding share of the Common Stock, par value $.01 per share, of the
Company ("Company Common Stock") not owned directly or indirectly by
Parent or the Company, will be converted into shares of Common Stock,
par value $.01 per share, of Parent ("Parent Common Stock");
WHEREAS, stockholder owns 4,843,342 shares of Company Common Stock (such
shares of Company Common Stock, 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, 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 required that the Stockholder agree, and in order
to induce Parent to enter into the Merger Agreement the Stockholder has
agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, the Stockholder agrees as
follows:
1. Capitalized Terms.
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Capitalized terms used in this Agreement that are not defined herein
shall have such meanings as set forth in the Merger Agreement.
2. Covenants of Stockholder.
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Until the termination of this Agreement in accordance with Section
5, Stockholder agrees as follows:
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(a) At the Stockholders Meeting (or at any adjournment thereof) or
in any other circumstances upon which a vote, consent or other
approval with respect to the Merger or the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) the
Subject Shares in favor of the Merger, the adoption of the
Merger Agreement and the approval of the terms thereof and each
of the other transactions contemplated by the Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares
against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or
any subsidiary thereof or any other Takeover Proposal or (ii)
any amendment of the Company's Certificate of Incorporation or
Bylaws or other proposal or transaction involving the Company or
any of its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent or
nullify the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement or change in
any manner the voting rights of any class of capital stock of
the Company. The Stockholder further agrees not to commit or
agree to take any action inconsistent with the foregoing.
(c) The Stockholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of (including by gift) (collectively,
"Transfer"), or enter into any contract, option or other
arrangement (including any profit-sharing arrangement) with
respect to the Transfer of the Subject Shares to any person or
(ii) enter into any voting arrangement, whether by proxy, voting
agreement or otherwise, in relation to the Subject Shares, and
agrees not to commit or agree to take any of the foregoing
actions.
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(d) The Stockholder shall not, nor shall the Stockholder permit any
affiliate, director, officer, employee, investment banker,
attorney or other advisor or representative of the Stockholder
to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or
indirectly participate in any discussions or negotiations
regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes or may reasonably be
expected to lead to, any Takeover Proposal.
(e) The Stockholder shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with Parent in doing, all things
necessary, proper or advisable to consummate and make effective,
in the most expeditious manner practicable, the Merger and the
other transactions contemplated by the Merger Agreement.
Stockholder makes the covenants and agreements contained in this
Section 2 solely in Stockholder's capacity as a stockholder of the
Company and nothing contained in this Agreement shall limit the
ability of Stockholder, to the extent Stockholder is a director of
the Company, to discharge Stockholder's fiduciary duties as a
director of the Company under applicable law.
3. The Subject Shares.
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The Stockholder represents and warrants to Parent that (i) the
Stockholder is the record and beneficial owner of, and has good and
marketable title to, the Subject Shares, (ii) the Stockholder does
not own, of record or beneficially, any shares of capital stock of
the Company other than the Subject Shares and (iii) the Stockholder
has the sole right to vote, and the sole power of disposition with
respect to, the Subject Shares, and none of the Subject Shares is
subject to any voting trust, proxy or other agreement, arrangement
or restriction with respect to the voting or disposition of such
Subject Shares, except as contemplated by this Agreement.
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4. Affiliates Letter.
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Stockholder agrees to execute and deliver on a timely basis an
Affiliate Letter in the form of Exhibit A to the Merger Agreement,
when and if requested by Parent.
5. Termination.
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The obligations of the Stockholder hereunder shall terminate upon
the earlier of the termination of the Merger Agreement pursuant to
Section 8.1 thereof or the Effective Time; provided, however, that
if the Merger Agreement is terminated pursuant to Sections 8.1(d),
8.1(e) or 8.1(f) of the Merger Agreement, this Agreement shall not
terminate until 60 days following the termination of the Merger
Agreement.
6. Further Assurances.
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Stockholder will, from time to time, execute and deliver, or cause
to be executed and delivered, such additional or further consents,
documents and other instruments as Parent may reasonably request for
the purpose of effectively carrying out the transactions
contemplated by this Agreement.
7. Successors, Assigns and Transferees Bound.
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Any successor, assignee or transferee (including a successor,
assignee or transferee as a result of the death of the Stockholder,
such as an executor or heir) shall be bound by the terms hereof, and
the Stockholder shall take any and all actions necessary to obtain
the written confirmation from such successor, assignee or transferee
that it is bound by the terms hereof.
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8. Remedies.
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The Stockholder acknowledges that money damages would be both
incalculable and an insufficient remedy for any breach of this
Agreement by it, and that any such breach would cause Parent
irreparable harm. Accordingly, the Stockholder agrees that in the
event of any breach or threatened breach of this Agreement, Parent,
in addition to any other remedies at law or in equity it may have,
shall be entitled, without the requirement of posting a bond or
other security, to equitable relief, including injunctive relief and
specific performance.
9. Severability.
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The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such
jurisdiction, or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. If in the opinion of
Parent's independent accountants, any provision hereof would cause
the Merger to be ineligible for "pooling of interest" accounting
treatment, it shall be deemed to be ineffective and inapplicable.
10. Amendment.
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This Agreement may be amended only by means of a written instrument
executed and delivered by both the Stockholder and Parent.
11. Governing Law.
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This Agreement shall be governed by, and construed in accordance in
accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
12. Counterparts.
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For the convenience of the parties, this Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
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13. Termination of Loan Agreement.
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The loan agreement between the Stockholder and the Company
referenced in the Company's Proxy Statement for its 1997 Annual
Meeting of Stockholders has been terminated and is of no force or
effect and no amounts are owing to the Stockholder or the Company
thereunder.
14. Termination of Administrative Services Agreement.
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The Stockholder agrees to take all necessary action to cause the
Administrative Services Agreement dated as of May 7, 1997 between
the Company and the Stockholder (the "Services Agreement") to be
terminated effective immediately before the Effective Time (or such
later time thereafter as may be requested by Parent, not to exceed
one hundred eighty (180) days following the Effective Time) on terms
that are reasonably satisfactory to Parent, which terms shall
include that the Company shall have no continuing obligations under
the such agreements following such termination and that the
Stockholder shall not be entitled to receive any consideration in
connection with such termination other than a termination fee,
payable by the Company at the time of such termination, equal to the
Services Fee (as defined in Section 3 of the Services Agreement)
payable with respect to the period commencing on the date of such
termination and ending on December 31, 1998. The Stockholder
represents to Parent that a true and complete copy of such agreement
has been delivered to Parent and that all amounts due to Stockholder
from the Company thereunder up to and including January 1, 1998 have
been paid in full.
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SAFEGUARD SCIENTIFICS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
Accepted and Agreed to
as of the date noted above:
TELLABS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
