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EXHIBIT 4
FORM OF
COMPANY AFFILIATE AGREEMENT
THIS COMPANY AFFILIATE AGREEMENT (this "Agreement") is made and entered
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into as of October 26, 2000, between MICROCHIP TECHNOLOGY INCORPORATED, a
Delaware corporation ("Parent"), and the undersigned stockholder of TELCOM
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SEMICONDUCTOR, INC., a Delaware corporation ("Company"), who may be deemed an
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affiliate ("Affiliate") of Company. Capitalized terms used but not otherwise
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defined herein shall have the meanings ascribed to them in the Reorganization
Agreement (as defined below).
RECITALS
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A. The Company, Merger Sub (as defined below) and Parent have entered into
an Agreement and Plan of Reorganization (the "Reorganization Agreement") which
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provides for the merger (the "Merger") of Matchbox Acquisition Corp., a wholly-
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owned subsidiary of Parent ("Merger Sub"), with and into the Company. Pursuant
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to the Merger, all issued and outstanding capital stock of the Company (the
"Company Capital Stock") as of the Effective Time (as defined in the
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Reorganization Agreement) will be converted into common stock of Parent, par
value $0.001 per share ("Parent Common Stock") as set forth in the
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Reorganization Agreement;
B. The execution and delivery of this Agreement by Affiliate is a material
inducement to Parent to enter into the Reorganization Agreement; and
C. Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of Parent after the Merger as the term "affiliate" is used (i) for
purposes of Rule 144 of the Rules and Regulations (the "Rules and Regulations")
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of the Securities and Exchange Commission (the "Commission") and (ii) in
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Accounting Series Releases 130 and 135, as amended, although nothing contained
herein shall be construed as an admission by Affiliate that Affiliate is in fact
an "affiliate" of Parent.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
1. Acknowledgments by Affiliate. Affiliate acknowledges and understands
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that the representations, warranties and covenants by Affiliate set forth
herein will be relied upon by Parent, the Company and their respective
affiliates, counsel and accounting firms for purposes of determining Parent's
eligibility to account for the Merger as a "pooling of interests." Affiliate
has carefully read this Agreement and the Reorganization Agreement and has had
the opportunity to discuss the requirements of this Agreement with Affiliate's
professional advisors, who Affiliate believes are qualified to advise
Affiliate with regard to such matters.
2. Beneficial Ownership of Company Capital Stock. The Affiliate is the
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sole beneficial owner of the number of shares of Company Capital Stock set
forth next to its name on the signature
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page hereto (the "Shares"). There are no options, warrants, calls, rights,
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commitments or agreements of any character, written or oral, to which the
Affiliate is party or by which it is bound obligating the Affiliate to issue,
deliver, sell or redeem prior to the end of the Restricted Period (as defined
in Section 3 below), or cause to be issued, delivered, sold or redeemed prior
to the end of the Restricted Period, any Shares or obligating the Affiliate to
grant or enter into any such option, warrant, call, right, commitment or
agreement prior to the end of the Restricted Period. The Affiliate has the
sole right to transfer such Shares. The Shares constitute all shares of
Company Capital Stock owned, beneficially or of record, by the Affiliate. The
Affiliate has not engaged in any sale or other transfer of the Shares in
contemplation of the Merger. All shares of Company Capital Stock and Parent
Common Stock acquired by Affiliate subsequent to the date hereof (including
shares of Parent Common Stock acquired in the Merger) shall be subject to the
provisions of this Agreement, to the extent such provisions are then still
applicable, as if held by Affiliate as of the date hereof.
3. Covenants Related to Pooling of Interests. In accordance with Staff
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Accounting Bulletin No. 65, during the period from the date 30 days prior to the
Effective Time until the day Parent publicly announces financial results
covering at least 30 days of combined operations of Parent and the Company (the
"Restricted Period"), Affiliate shall not sell, exchange, transfer, pledge,
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distribute, make any gift or otherwise dispose of or grant any option, establish
any "short" or put-equivalent position with respect to or enter into any similar
transaction (through derivatives or otherwise) intended or having the effect,
directly or indirectly, to reduce Affiliate's risk relative to any shares of
Parent Common Stock or Company Capital Stock (including the Shares). Parent
may, at its discretion, place a stock transfer notice consistent with the
foregoing, with respect to Affiliate's shares of Parent Common Stock provided
that such notice shall be countermanded as soon as practicable upon expiration
of the necessity therefor.
4. Compliance with Rule 145 and the Securities Act.
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(a) Affiliate has been advised that (i) the issuance of shares of Parent
Common Stock in connection with the Merger is expected to be effected pursuant
to a registration statement on Form S-4 promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), and the resale of such shares
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shall be subject to restrictions set forth in Rule 145 under the Securities
Act, and (ii) Affiliate may be deemed to be an affiliate of the Company.
Affiliate accordingly agrees not to sell, transfer or otherwise dispose of any
Parent Common Stock issued to Affiliate in the Merger unless (i) such sale,
transfer or other disposition is made in conformity with the requirements of
Rule 145(d) promulgated under the Securities Act, (ii) such sale, transfer or
other disposition is made pursuant to an effective registration statement
under the Securities Act or an appropriate exemption from registration, (iii)
Affiliate delivers to Parent a written opinion of counsel, reasonably
acceptable to Parent in form and substance, that such sale, transfer or other
disposition is otherwise exempt from registration under the Securities Act or
(iv) an authorized representative of the Commission shall have rendered
written advice to Affiliate to the effect that the Commission would take no
action, or that the staff of the Commission would not recommend that the
Commission take any action, with respect to the proposed disposition if
consummated (the "No Action Correspondence").
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(b) Parent shall give stop transfer instructions to its transfer agent with
respect to any Parent Common Stock received by Affiliate in the Merger and
there shall be placed on the
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certificates representing such Common Stock, or any substitutions therefor
issued prior to the end of the Restricted Period, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 APPLIES AND MAY ONLY BE TRANSFERRED (A)
IN CONFORMITY WITH RULE 145(d), OR (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (C) IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT SUCH TRANSFER IS
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and Parent shall instruct its transfer agent to
remove such legend, if Affiliate delivers to Parent (i) satisfactory written
evidence that the shares have been sold in compliance with Rule 145 (in which
case, the substitute certificate shall be issued in the name of the transferee),
(ii) the No Action Correspondence, (iii) an opinion of counsel, in form and
substance reasonably satisfactory to Parent, to the effect that public sale of
the shares by the holder thereof is no longer subject to Rule 145, or (iv) a
written request for removal of such legend after the first anniversary of the
Effective Time.
5. Termination.
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(a) This Agreement shall be terminated and shall be of no further
force and effect in the event of the termination of the Reorganization
Agreement pursuant to Article VII of the Reorganization Agreement.
6. Miscellaneous.
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(a) Waiver; Severability. No waiver by any party hereto of any
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condition or of any breach of any provision of this Agreement shall be
effective unless in writing and signed by each party hereto. In the event that
any provision of this Agreement, or the application of any such provision to
any person, entity or set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to persons, entities or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected
and shall continue to be valid and enforceable to the fullest extent permitted
by law.
(b) Binding Effect and Assignment. This Agreement and all of the
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provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor
any of the rights, interests or obligations of the parties hereto may be
assigned by either of the parties without prior written consent of the other
party hereto.
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(c) Amendments and Modification. This Agreement may not be modified,
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amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(d) Injunctive Relief. Each of the parties acknowledge that (i) the
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covenants and the restrictions contained in this Agreement are necessary,
fundamental, and required for the protection of Parent and the Company and to
preserve for Parent the benefits of the Merger; (ii) such covenants relate to
matters which are of a special, unique, and extraordinary character that gives
each of such covenants a special, unique, and extraordinary value; and (iii) a
breach of any such covenants or any other provision of this Agreement shall
result in irreparable harm and damages to Parent and the Company which cannot
be adequately compensated by a monetary award. Accordingly, it is expressly
agreed that in addition to all other remedies available at law or in equity,
Parent and the Company shall be entitled to the immediate remedy of a
temporary restraining order, preliminary injunction, or such other form of
injunctive or equitable relief as may be used by any court of competent
jurisdiction to restrain or enjoin any of the parties hereto from breaching
any such covenant or provision or to specifically enforce the provisions
hereof.
(e) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the state of Delaware, without reference to
rules of conflicts of law.
(f) Entire Agreement. This Agreement sets forth the entire
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understanding of Affiliate and Parent relating to the subject matter hereof
and supersedes all prior agreements and understandings between Affiliate and
Parent relating to the subject matter hereof.
(g) Attorneys' Fees. In the event of any legal actions or proceeding
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to enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results
in a final judgment.
(h) Further Assurances. Affiliate shall execute and/or cause to be
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delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
(i) Third Party Reliance. Counsel to and independent auditors for
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Parent and the Company shall be entitled to rely upon this Affiliate
Agreement.
(j) Survival. The representations, warranties, covenants and other
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provisions contained in this Agreement shall survive the Merger.
(k) Notices. All notices and other communications pursuant to this
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Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to
the parties at the following address (or at such other address for a party as
shall be specified by like notice):
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If to Parent:
Microchip Technology Incorporated
2355 West Chandler Boulevard
Chandler, Arizona 85224
Attention: General Counsel
Telecopy No.: (480) 899-9210
with a copy to:
Wilson Sonsini Goodrich & Rosati, Professional Corporation
One Market, Spear Tower
Suite 3300
San Francisco, CA 94105
Attention: Michael J. Kennedy, Esq.
Telecopy No.:(415) 947-2099
If to Affiliate: To the address for notice set forth on the signature
page hereof.
(l) Counterparts. This Agreement shall be executed in one or more
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counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Affiliate Agreement to be
duly executed on the day and year first above written.
MICROCHIP TECHNOLOGY AFFILIATE
INCORPORATED
By:_________________________ By:_________________________
Name:_______________________ Affiliate's Address for Notice:
Title:______________________ ____________________________
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Shares beneficially owned:
_______ shares of Company Common Stock
_______ shares of Company Common Stock
issuable upon exercise of outstanding
options
_______ shares of Parent Common Stock
[Signature Page to Company Affiliate Agreement]
