EXHIBIT 4.2
AMENDED AND RESTATED SHAREHOLDER AGREEMENT
This Agreement, dated as of March 25, 1998 (the "Agreement") by and
between Integrated Measurement Systems, Inc., an Oregon corporation (the
"Company"), and Cadence Design Systems, Inc., a Delaware corporation (the
"Stockholder"), amends and entirely restates the Shareholder Agreement
between the Stockholder and the Company dated as of May 17, 1995.
WHEREAS, the Stockholder presently owns 2,759,000 shares, or
approximately 37%, of the Company's outstanding common stock; and
WHEREAS, the Board of Directors of the Company has unanimously
determined that it would be in the best interests of the Company and its
stockholders to adopt, and the Company intends to adopt, a Shareholder Rights
Plan (the "Rights Plan") with certain provisions permitting the Stockholder
to hold its existing beneficial ownership of the Company's common stock and
to acquire beneficial ownership of up to an additional 7.5% of the Company's
common stock without causing the rights (the "Rights") to be issued under the
Rights Plan to become exercisable; and
WHEREAS, in connection with adoption of the Rights Plan the Company and
the Stockholder have reached an agreement modifying their previous agreement
with respect to voting and disposing of shares of the Company's common stock
owned by the Stockholder and wish to set forth in this Agreement their mutual
understanding as to the terms of that agreement and as to certain other
matters;
NOW, THEREFORE, in consideration of the mutual premises and agreements
hereinafter set forth, and for other valuable consideration, the Company and
the Stockholder agree as follows:
1. DEFINITIONS.
1.1 DEFINITIONS.
1.1.1 "Common Stock" shall mean (i) the Company's common stock,
(ii) any other securities of the Company convertible into or exchangeable for
the Company's common stock and (iii) any other voting securities of the
Company.
1.1.2 "Shares" shall mean shares of Common Stock beneficially
owned by the Cadence Group (as defined below).
1.1.3 The terms "beneficial ownership," "person," "associate,"
"affiliate," and "group" shall have the meanings ascribed to such terms in
Rules 12b-2 and 13d-3 under the Securities Exchange Act of 1934 (the "1934
Act").
1.
1.1.4 The "Cadence Group" shall consist of (i) Stockholder, (ii)
each Subsidiary (as defined below) of Stockholder, (iii) each company or
other entity of which Stockholder is a direct or indirect Subsidiary and (iv)
each Subsidiary of a person described in the preceding clause (iii).
1.1.5 "Subsidiary" of a particular person shall mean any company
or other entity with respect to which such particular person beneficially
owns, directly or through one or more Subsidiaries, sufficient voting
securities to elect at least a majority of the Board of Directors (or
comparable body).
1.1.6 "New Shares" shall mean Shares, beneficial ownership of
which is acquired by a member of the Cadence Group after the date of this
Agreement (except Shares acquired from another member of the Cadence Group or
pursuant to a stock split, stock dividend, recapitalization or similar
transaction affecting all holders of the applicable class or type of Common
Stock equally). Reference is made to Section 1.2 for certain rules used to
determine the status of Shares as Old Shares or New Shares.
1.1.7 "Old Shares" shall mean all Shares that are not New Shares.
1.1.8 "Continuing Directors" shall mean (i) the members of the
Board of Directors of the Company on the date of this Agreement and (ii) any
subsequent directors of the Company nominated by the persons described in the
preceding clause (i) or by directors nominated by such persons, in each case
in office prior to the meeting at which such directors are elected.
1.1.9 "Holder" shall mean (i) any member of the Cadence Group
that beneficially owns Old Shares and (ii) any person who is not a member of
the Cadence Group to whom registration rights under this Agreement are
transferred in accordance with Section 4.4 of this Agreement in connection
with the transfer of Old Shares.
1.1.10 "Registrable Common Stock" shall mean (i) Old Shares and
(ii) Common Stock transferred to the Holder in a transaction in which
registration rights under this Agreement were transferred in accordance with
Section 4.4 of this Agreement.
1.2 RULES USED TO DETERMINE WHETHER SHARES ARE NEW SHARES OR OLD SHARES.
1.2.1 Shares transferred from one member of the Cadence Group to
another member of the Cadence Group shall not change their status as either
New Shares or Old Shares as the result of such transfer.
1.2.2 Shares sold pursuant to a registration statement filed
pursuant to Sections 4.1, 4.2 or 4.3 of this Agreement shall be deemed to be
Old Shares for purposes of determining the number of Shares deemed to be Old
Shares and New Shares, respectively, after such sales.
1.2.3 Shares beneficial ownership of which is sold, assigned,
conveyed or transferred by members of the Cadence Group to persons who are
not members of the Cadence
2.
Group in any manner except pursuant to a registration statement filed
pursuant to Sections 4.1, 4.2 or 4.3 of this Agreement shall be deemed to be
first New Shares, until there are no New Shares, and then Old Shares for
purposes of determining the number of Shares deemed to be Old Shares and New
Shares, respectively, after such sale, assignment, conveyance or transfer.
The transferor and transferee of such shares may vary this rule (i.e., may
designate that the Shares transferred are Old Shares) by providing written
notice of such designation to the Company within five business days after the
effective date of the transfer.
1.2.4 Shares deemed beneficially owned by the Cadence Group as
the result of the formation of a group with a person or persons not a member
or members of the Cadence Group shall be New Shares. Disposition of such
shares (either as the result of a disposition by such persons or upon the
termination of group status) shall be deemed to be the disposition of New
Shares.
1.2.5 For purposes of illustration only, and without limiting in
any way the scope of this Section 1.2, attached hereto as Exhibit A are
examples of the calculation of the number of Shares deemed to be New Shares
and Old Shares, respectively, under certain circumstances specified in such
Exhibit A, for all purposes of this Agreement.
2. RESTRICTIONS ON SALES OF COMMON STOCK.
2.1 NO RESTRICTIONS. Any member of the Cadence Group may freely
transfer Common Stock subject only to the restrictions, if any, imposed by
federal and state securities laws and the applicable provisions of the Rights
Plan; PROVIDED, HOWEVER, that no transfer shall be made to another member of
the Cadence Group unless such transferee executes a counterpart of this
Agreement thereby agreeing to be bound to the same extent as the transferor.
3. VOTING OF SHARES.
3.1 VOTING RESTRICTIONS ON ALL SHARES. Without the prior written
consent of the Company, no member of the Cadence Group shall vote any Shares
it beneficially owns and has the power to vote on the relevant record date in
favor of (i) any proposal opposed by the Company's Board of Directors to (x)
directly or indirectly amend, terminate, waive or redeem the Rights or the
Rights Plan or (y) approve or facilitate a transaction or series of related
transactions the consummation of which would cause the Rights to become
exercisable but for an amendment, termination, waiver or redemption of the
Rights or the Rights Plan or (ii) any slate of directors proposed by any
person other than the Continuing Directors (including a slate proposed by any
member of the Cadence Group) if that slate of directors has publicly
announced its intention to (x) directly or indirectly amend, terminate, waive
or redeem the Rights or the Rights Plan or (y) if elected to the Company's
Board of Directors, consider possible transactions the consummation of which
would cause the Rights to become exercisable but for such an amendment,
termination, waiver or redemption.
3.2 VOTING RESTRICTIONS ON NEW SHARES. Except with the prior written
consent of the Continuing Directors, each member of the Cadence Group shall
vote any New Shares it beneficially owns and has the power to vote on the
applicable record date on all matters in
3.
accordance with the recommendations of the Company's Board of Directors;
PROVIDED, HOWEVER, that if a majority of the Company's Board of Directors
consists of the designees of members of the Cadence Group (or persons acting
in concert with such members), any New Shares not acquired in a transaction
approved by the Continuing Directors shall not be voted.
3.3 TERMINATION OF VOTING RESTRICTIONS. The restrictions imposed by
this Section 3 shall terminate on the date that the Cadence Group ceases to
beneficially own 20% or more of the outstanding shares of Common Stock.
4. REGISTRATION RIGHTS.
4.1 PIGGYBACK REGISTRATION.
4.1.1 In the event that the Company proposes to register any
shares of Common Stock under the Securities Act of 1933, as amended (the
"1933 Act") (other than for an offering primarily or exclusively to the
employees or in connection with the acquisition of the assets or shares of,
or merger or consolidation with, another corporation), and a registration
form is available for use which may also be used for the registration of the
Common Stock beneficially owned by any Holder, the Company shall notify the
Holders at least 30 days prior to the filing of any such registration form
with the SEC, and will use its best efforts to include in such registration
all Registrable Stock with respect to which the Company has received written
request for inclusion within 10 days after such notice. Each such request
shall contain an undertaking from the Holder to provide all such information
and material and to take all such actions as may be required by the Company
in order to permit the Company to comply with all applicable federal and
state securities laws.
4.1.2 Each Holder shall pay all sales commissions or similar
selling charges with respect to Registrable Stock sold by the Holder pursuant
to a registration under Section 4.1.1. (a "Piggyback Registration"). The
Company shall pay all registration and filings fees, fees and expenses of
compliance with federal and state securities laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel and
accountants for the Company and not more than one counsel for the
participating Holders in connection with a Piggyback Registration.
4.1.3 If a Piggyback Registration is an underwritten offering and
the managing underwriters advise the Company in writing that in their opinion
the number of shares of Common Stock requested to be included in such
Registration exceeds the number which can be sold in such offering or will
have a material adverse effect on the price of the Common Stock to be sold,
the Company will include in such Registration (a) first, shares of Common
Stock the Company proposes to sell and (b) second, Registrable Stock that the
Holders have requested to be included pursuant hereto; provided, however,
that without the consent of Holders beneficially owning a majority of the
Registrable Stock to be included in the registration, the number of shares
included shall not amount to less than 30% of the total number of shares of
Common Stock included in the registration.
4.
4.1.4 Nothing in this Section 4.1 shall obligate the Company to
take any action with respect to any Holder other than Stockholder if the
Company has not been notified in writing that such Holder is a transferee of
registration rights in accordance with Section 4.4 of this Agreement prior to
the date such action is to be taken.
4.2 DEMAND REGISTRATION.
4.2.1 Subject to the terms of this Section 4.2, Holders
beneficially owning a majority of the Registrable Stock then outstanding may
request registration of Registrable Stock under the 1933 Act (a "Demand
Registration"); provided, however, that in the event that the Company,
itself, proposes to register any shares of Common Stock, such registration
shall instead be deemed to be and treated as a Piggyback Registration under
the provisions of Section 4.1 hereof. Within 20 days after receipt by the
Company of such request (a "Demand Request") (which Request shall specify the
number of shares of Registrable Stock proposed to be registered), the Company
shall thereafter, as expeditiously as practicable, both in any event within
60 days, (a) file with the SEC under the 1933 Act a registration statement on
the appropriate form concerning all Registrable Stock specified in the Demand
Request (the "Requested Shares") and (b) use its best efforts to cause such
registration statement to be declared effective.
4.2.2 The Company shall not be obligated (a) to comply with more
than three requests by the Holders for a Demand Registration, (b) to file a
registration statement within 6 months after the effective date of any
registration statement filed by the Company (other than for an offering
primarily or exclusively to employees or in connection with the acquisition
of the assets or shares of, or merger or consolidation with, another
corporation and other than any registration statement on Form S-3), whether
pursuant to this Section 4.2 or otherwise or (c) to include any Registrable
Stock held by any Holder unless (i) the Holder shall have promptly furnished
the Company with all information and statements about or pertaining to such
Holder in such detail as is deemed by the Company to be necessary or
appropriate with respect to the preparation of the registration statement and
(ii) the Holder shall have executed all affidavits and shall have provided
all letters, documents and undertakings relating thereto as is deemed
necessary or appropriate by the Company, its counsel and/or the
underwriter(s), in connection with such registration statement, the related
filings and underwriting.
4.2.3 If a Demand Registration is an underwritten offering and
the managing underwriters advise the Company and the Holders in writing that
in their opinion the number of shares of Registrable Stock to be included in
such registration exceeds the number which can be sold in such offering or
will have a material adverse effect on the price of the shares to be sold,
then the amount of Registrable Stock that may be included in such
registration shall be reduced accordingly; PROVIDED, HOWEVER, that, without
the consent of the Holders beneficially owning a majority of the shares
subject to the registration, the number of shares of Registrable Stock
included shall not amount to less than 30% of the total number of shares of
Common Stock included in the registration. If a Demand Registration is an
underwritten offering, the Company
5.
will enter into an underwriting agreement containing conventional
representations, warranties, conditions and indemnification provisions with
any underwriter which acquires Registrable Stock from the Holders.
4.2.4 If the Requested Shares sold pursuant to this Agreement
require registration or qualification with or approval of any federal or
state governmental official or authority other than registration under the
1933 Act before such Requested Shares may be sold, the Company will take all
actions reasonably required in connection with such registration or
qualification and will use its best efforts to cause any such Requested
Shares to be duly registered, qualified or approved as may be required;
provided, however, that the Company shall not be required (a) to qualify as a
foreign corporation in any jurisdiction, (b) to subject itself to taxation in
any such jurisdiction, (c) to register as a securities broker or dealer in
any jurisdiction, or (d) to modify in any material respect any business
policy or practice (including with respect to the payment of compensation or
other benefits).
4.2.5 The Company will deliver to the Holders participating in
the Demand Registration such reasonable number of copies of a definitive
prospectus included in such Demand Registration and of any revised or
supplemental prospectus filed as the Holders may from time to time reasonably
request during the period in which the Company is required to keep such
registration statement effective. The Company shall file post-effective
amendments or supplements to each such registration statement for a period of
not more than 120 days (extended by such number of days as the Holders are
requested by the Company or the Underwriters to stand back from the market)
or such shorter period as is necessary for the distribution described in such
registration statement to be completed in order that the registration
statement may be effective at all times during such period and at all times
during such period comply with various applicable federal and state
securities laws, after which time the Company may withdraw such Requested
Shares from registration to the extent not sold.
4.2.6 The Holders shall pay all sales commissions or similar
selling charges with respect to shares of Registrable Stock sold by such
Holders pursuant to a Demand Registration. The Company shall pay all fees
and disbursements of the Company's counsel and accountants. The registration
and filing fees, fees and expenses of compliance with federal and state
securities laws, printing expenses, messenger and delivery expenses and all
other expenses incurred in connection with the Demand Registration including
fees and disbursements of not more than one counsel for the Holders
participating in the Demand Registration shall be paid as follows: (i) with
respect to the first demand registration, the Company shall pay all such fees
and expenses; (ii) with respect to the second demand registration, the
Company and the Holders shall each pay half of all such fees and expenses;
and (iii) with respect to the third demand registration, the Holders shall
pay all such fees and expenses.
4.3 FORM S-3 REGISTRATION.
In case the Company shall receive from any Holder a written request that
the Company effect a registration involving the sale of more than $1,000,000
of Registrable Stock on Form S-3
6.
(or any successor form to Form S-3) and any related qualification or
compliance with respect to any Registrable Stock, then the Company will:
4.3.1 As soon as practicable, effect such registration and all
such qualifications and compliances as may be sold requested and as would
permit or facilitate the sale and distribution of all or such portion of the
Registrable Stock as are specified in such request; PROVIDED, HOWEVER, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 4.3:
(a) if Form S-3 (or any successor form to Form S-3) is not
available for such offering by the Holders;
(b) if the Company shall furnish to the Holders a certificate
signed by the President or Chief Executive Officer of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its stockholders for such
Form S-3 Registration to be effected at such time, in which event the Company
shall have the right to defer the filing of the Form S-3 registration
statement no more than once during any twelve-month period for a period of
not more than 120 days after receipt of the request of the Holders under this
Section 4.3;
(c) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for the Holders pursuant to this Section 4.3; or
(d) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or
compliance.
4.3.2 Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Stock so requested to be
registered pursuant to this Section 4.3 as soon as practicable after receipt
of the request of the Holders for such registration. The Company shall pay
all expenses incurred in connection with each registration requested pursuant
to this Section 4.3 (excluding underwriters' or brokers' discounts and
commissions), including without limitation all filing, registration and
qualification, printers' and accounting fees and the reasonable fees and
disbursements of not more than one counsel for the Holders participating in
the registration and of counsel for the Company.
4.3.3 Form S-3 registrations shall not be deemed to be demand
registrations as described in Section 4.2 above.
4.4 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Common Stock pursuant to this Section 4 may be assigned by any
Holder to a transferee or assignee of such securities provided the Company
is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
provided, further, that such assignment shall be effective only if
immediately following such transfer the further
7.
disposition of such securities by the transferee or assignee is restricted
under the 1933 Act and the transferee or assignee shall have agreed in
writing to be bound by the terms and conditions of this Agreement.
5. INJUNCTIVE AND OTHER RELIEF. The Company and the Stockholder agree
that in the event that any member of the Cadence Group breaches this
Agreement, the Company will be irreparably harmed and will be entitled to
injunctive relief and specific enforcement in addition to any other remedy
which it may have at law or in equity. The Company and the Stockholder agree
that in the event the Company breaches this Agreement, the applicable member
or members of the Cadence Group will be irreparably harmed and will be
entitled to injunctive relief and specific enforcement in addition to any
other remedy that such member or members may have at law or in equity.
6. PRESS RELEASES. All press releases and any other statements to the
public or press relating to this Agreement shall be jointly issued and agreed
upon by the Company and the Stockholder, subject to the respective
obligations of the Company and the Stockholder under state and federal
securities laws. Neither the Company nor the Stockholder nor their respective
representatives shall hold any press conferences relating to this Agreement.
7. TERMINATION. Except as otherwise provided herein, this Agreement
and all provisions hereof will remain in full force and effect as between the
Company and the Holders from the effective date hereof until the date on
which all of the shares of Common Stock beneficially owned by each Holder may
be sold to the public in a three-month period without registration under the
1933 Act.
8. ENTIRE AGREEMENT; MODIFICATION. This Agreement sets forth the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof, and merges with and supercedes any and all prior
discussions, agreements and understandings between or among them with respect
thereto, and no party shall be bound by any condition, definition, warranty
or representation, other than those expressly set forth or provided for in
this Agreement or in any document or instrument delivered pursuant to this
Agreement, or as may be set forth in writing and signed by the party or
parties to be bound thereby on or subsequent to the date hereof. This
Agreement (except for Section 4) may not be changed or modified, except by an
agreement in writing executed by the Company and members of the Cadence Group
beneficially owning a majority of the Shares. Section 4 of this Agreement
may not be changed or modified, except by an agreement in writing executed by
the Company and the Holders beneficially owning a majority of the Registrable
Shares.
9. GOVERNING LAW. This Agreement shall be governed by Oregon law
(excluding the choice of law provisions).
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts.
11. SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of this Agreement shall
remain operative and in full force and effect. If any
8.
provision contained in this Agreement is invalidated, the parties hereto will
use their best efforts to adopt an appropriate substitute for the invalidated
provision consistent with the intent of the parties.
12. BINDING EFFECT OF AGREEMENT. The terms of this Agreement shall be
binding on and inure to the benefit of the parties hereto and their
respective subsidiaries, parents or other affiliated entities, agents,
attorneys, heirs, executors, successors, representatives and assigns.
13. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or certified or registered mail, return receipt requested,
to the addresses set forth below the signatures of the respective parties
hereto. In the case of communications to the Stockholder, a copy shall be
delivered concurrently to Stockholder's General Counsel, or to such other
person or persons or to such other address or addresses as may be designated
by one to the other. In the case of communications to the Company, a copy
shall be delivered concurrently to Heller, Ehrman, White & XxXxxxxxx, 000
Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx, or
to such other person or persons or to such other address or addresses as may
be designated by one to the other.
14. THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
15. HEADINGS. The headings in the sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
9.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INTEGRATED MEASUREMENT SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
President
CADENCE DESIGN SYSTEMS, INC.
By: /s/ H. Xxxxxxx Xxxxxxx
----------------------------------
H. Xxxxxxx Xxxxxxx
Executive Vice President
10.
EXHIBIT A
Start: 37.0%
Purchase: 3.0%
New Shares: 3.0%
Old Shares: 37.0%
Start: 37.0%
Purchase: 3.0%
Sell in the market: 2.0%
New Shares: 1.0%
Old Shares: 37.0%
Start: 37.0%
Purchase: 3.0%
Sell in registered offering 2.0%
New Shares: 3.0%
Old Shares: 35.0%
Start: 37.0%
Purchase: 3.0%
Sell in the market: 5.0%
New Shares: 0%
Old Shares: 35.0%
Start: 37.0%
Purchase: 3.0%
Sell in registered offering: 5.0%
New Shares: 3.0%
Old Shares: 32.0%
Start: 37.0%
Sell: 5.0%
Purchase: 2.0%
New Shares: 2.0%
Old Shares: 32.0%
Start: 37.0%
Purchase: 2.0%
Sell in private transaction: 5.0%
New Shares: 0%
Old Shares: 34.0%
Start: 37.0%
Purchase: 2.0%
Sell in registered offering: 5.0%
New Shares: 2.0%
Old Shares: 32.0%
Start: 37.0%
Form Group with 5% Stockholder
New Shares: 5.0%
Old Shares: 37.0%
Start: 37.0%
Form Group with 5% Stockholder
Terminate Group with 5% Stockholder
New Shares: 0%
Old Shares: 37.0%
