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EXHIBIT 2
FORM OF
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
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of October 26, 2000, among MICROCHIP TECHNOLOGY INCORPORATED, a Delaware
corporation ("Parent"), and TELCOM SEMICONDUCTOR, INC., a Delaware corporation
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(the "Company"). Capitalized terms used but not otherwise defined herein will
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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 a wholly-owned subsidiary of Parent
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("Merger Sub") with and into the Company. Pursuant to the Merger, all
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outstanding capital stock of the Company will be converted into the right to
receive Parent Common Stock.
B. As a condition to Parent's willingness to enter into the Reorganization
Agreement, Parent has requested that Company agree, and Company has so agreed,
to grant to Parent an option to acquire shares of Company's Common Stock, $0.001
par value per share (the "Company Shares"), upon the terms and subject to the
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conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Reorganization Agreement
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
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herein, the Company hereby grants to Parent an irrevocable option (the
"Option") to acquire up to a number of Company Shares equal to 19.9% of the
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issued and outstanding shares as of the date of this Agreement (the "Option
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Shares"), in the manner set forth below by paying cash at a price per share
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of $15.00 (the "Exercise Price"). The Exercise Price and the number of Option
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Shares granted hereunder shall be subject to adjustment as set forth herein.
2. Exercise of Option.
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(a) The Option may be exercised by Parent, in whole or in part, at
any time or from time to time (i) after termination of the Reorganization
Agreement pursuant to Section 7.01(g) thereof or (ii) upon the occurrence of
any event causing the Termination Fee to become payable pursuant to Section
7.03(b)(ii) of the Reorganization Agreement (any of the events described in
clause (i) and (ii) of this sentence being referred to herein as an "Exercise
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Event"). In the event Parent wishes to exercise the Option, Parent will deliver
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to the Company a written notice (each an "Exercise Notice") specifying the
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total number of Option Shares it wishes to acquire. Each closing
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of a purchase of Option Shares (a "Closing") will occur on a date and at a
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time prior to the termination of the Option designated by Parent in an Exercise
Notice delivered at least two (2) business days prior to the date of such
Closing, which Closing will be held at the principal offices of the Company.
(b) The Option will terminate upon the earliest of (i) the Effective
Time, (ii) twelve (12) months following the date on which the Reorganization
Agreement is terminated pursuant to Section 7.01(b) or 7.01(d)(i) thereof, if
no event causing the Termination Fee to become payable pursuant to Section
7.03(b)(ii) of the Reorganization Agreement has occurred, (iii) twelve (12)
months following the date on which the Reorganization Agreement is terminated
pursuant to Section 7.1(g) thereof, (iv) in the event the Reorganization
Agreement has been terminated pursuant to Section 7.01(b) or 7.01(d)(i) thereof
and the Termination Fee became payable pursuant to Section 7.03(b)(ii) thereof,
twelve (12) months after payment of the Termination Fee; and (v) the date on
which the Reorganization Agreement is terminated other than pursuant to
Sections 7.01(b), 7.01(d)(i) or 7.01(g); provided, however, that if the Option
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cannot be exercised by reason of any applicable government order or because the
waiting period related to the issuance of the Option Shares under the HSR Act
will not have expired or been terminated, then the Option will not terminate
until the tenth business day after such impediment to exercise will have been
removed or will have become final and not subject to appeal.
3. Conditions to Closing. The obligation of Company to issue Option
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Shares to Parent hereunder is subject to the conditions that (A) any waiting
period under the HSR Act applicable to the issuance of the Option Shares
hereunder will have expired or been terminated; (B) all material consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, any Federal, state or local administrative agency or commission
or other Federal state or local governmental authority or instrumentality, if
any, required in connection with the issuance of the Option Shares hereunder
will have been obtained or made, as the case may be; and (C) no preliminary or
permanent injunction or other order by any court of competent jurisdiction
prohibiting or otherwise restraining such issuance will be in effect. It is
understood and agreed that at any time during which the Option is exercisable,
the parties will use their respective best efforts to satisfy all conditions to
Closing, so that a Closing may take place as promptly as practicable.
4. Closing. At any Closing, (A) the Company will deliver to Parent a
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single certificate in definitive form representing the number of Company Shares
designated by Parent in its Exercise Notice, such certificate to be registered
in the name of Parent and to bear the legend set forth in Section 10 hereof,
against delivery of (B) payment by Parent to the Company of the aggregate
purchase price for the Company Shares so designated and being purchased by
delivery of a certified check or bank check.
5. Representations and Warranties of the Company. Company represents and
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warrants to Parent that (A) Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder; (B) the execution and delivery of this Agreement by
the Company and consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this
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Agreement or any of the transactions contemplated hereby; (C) this Agreement
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company and, assuming this Agreement
constitutes a legal, valid and binding obligation of Parent, is enforceable
against the Company in accordance with its terms; (D) except for any filings
required under the HSR Act, the Company has taken all necessary corporate and
other action to authorize and reserve for issuance and to permit it to issue
upon exercise of the Option, and at all times from the date hereof until the
termination of the Option will have reserved for issuance, a sufficient number
of unissued Company Shares for Parent to exercise the Option in full and will
take all necessary corporate or other action to authorize and reserve for
issuance all additional Company Shares or other securities which may be
issuable pursuant to Section 8(a) upon exercise of the Option, all of which,
upon their issuance and delivery in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable; (E) upon
delivery of the Company Shares and any other securities to Parent upon exercise
of the Option, Parent will acquire such Company Shares or other securities free
and clear of all material claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever, excluding those imposed by Parent;
(F) the execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws or equivalent organizational
documents of the Company or any of its subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any of its subsidiaries or by which its or any of their respective
properties is bound or affected or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company's or any of its subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties are bound or affected; and (G) the execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization
or permit of, or filing with, or notification to, any Governmental Entity
except pursuant to the HSR Act.
6. Put Right.
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(a) Parent Put. At the request of and upon notice by Parent (the "Put
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Notice"), at any time during the period during which the Option is exercisable
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pursuant to Section 2 (the "Purchase Period"), the Company (or any successor
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entity thereof) will purchase from Parent all or any portion of the Option, to
the extent not previously exercised, at the price set forth below at:
The difference between the "Market/Tender Offer Price" for the Company
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Shares as of the date Parent gives notice of its intent to exercise its rights
under this Section 6(a) (defined as the higher of (A) the highest price per
share offered as of such date pursuant to any Acquisition Proposal which was
made prior to such date and (B) the average closing sale price of Company Shares
then on the Nasdaq National Market during the five (5) trading days ending on
the trading day immediately preceding such date) and the Exercise Price,
multiplied by the number of Company Shares purchasable pursuant to the Option,
but only if the Market/Tender Offer Price is greater than
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the Exercise Price. For purposes of determining the highest price offered
pursuant to any Acquisition Proposal which involves consideration other than
cash, the value of such consideration will be equal to the higher of (x) if
securities of the same class of the proponent as such consideration are traded
on any national securities exchange or by any registered securities
association, a value based on the closing sale price or asked price for such
securities on their principal trading market on such date and (y) the value
ascribed to such consideration by the proponent of such Acquisition Proposal,
or if no such value is ascribed, a value determined in good faith by the Board
of Directors of the Company.
(b) Payment and Redelivery of Option or Shares. In the event Parent
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exercises its rights under Section 6(a) by delivery of a Put Notice, the
Company will, within twenty (20) business days after Parent delivers such
notice, pay the required amount to Parent in immediately available funds and
Parent will surrender to the Company all or such portion of the Option with
respect to which the Put Notice relates and the certificates evidencing the
Company Shares purchased by Parent pursuant to such Put Notice.
7. Registration Rights.
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(a) Following the termination of the Reorganization Agreement, Parent
(sometimes referred to herein as the "Holder") may by written notice (a
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"Registration Notice") to the Company (the "Registrant") request the Registrant
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to register under the Securities Act all or any part of the shares acquired by
the Holder pursuant to this Agreement (such shares requested to be registered,
the "Registrable Securities") in order to permit the sale or other disposition
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of any or all shares of the Registrable Securities that have been acquired by
or are issuable to Holder upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by Holder, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision. Holder agrees to cause, and to cause any underwriters of
any sale or other disposition to cause, any sale or other disposition pursuant
to such registration statement to be effected on a widely distributed basis so
that upon consummation thereof no purchaser or transferee will own beneficially
more than 5.0% of the then-outstanding voting power of Registrant. Upon a
request for registration, the Registrant will have the option exercisable by
written notice delivered to the Holder within ten (10) business days after the
receipt of the Registration Notice, irrevocably to agree to purchase all or any
part of the Registrable Securities for cash at a price (the "Option Price")
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equal to the product of (i) the number of Registrable Securities so purchased
and (ii) the per share average of the closing sale prices of the Registrant's
Common Stock on the Nasdaq National Market for the ten (10) trading days
immediately preceding the date of the Registration Notice. Any such purchase
of Registrable Securities by the Registrant hereunder will take place at a
closing to be held at the principle executive offices of the Registrant or its
counsel at any reasonable date and time designated by the Registrant in such
notice within ten business days after delivery of such notice. The payment for
the shares to be purchased will be made by delivery at the time of such closing
of the Option Price in immediately available funds.
(b) If the Registrant does not elect to exercise its option to
purchase pursuant to Section 7(a) with respect to all Registrable Securities,
the Registrant will use all reasonable efforts to effect, as promptly as
practicable, the registration under the Securities Act of the unpurchased
Registrable Securities requested to be registered in the Registration Notice
and to keep such
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registration statement effective for such period not in excess of 90 calendar
days from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition; provided,
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however, that the Holder will not be entitled to more than an aggregate of
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two (2) effective registration statements hereunder. The obligations of
Registrant hereunder to file a registration statement and to maintain its
effectiveness may be suspended for up to 120 calendar days in the aggregate if
the Board of Directors of Registrant shall have determined that the filing of
such registration statement or the maintenance of its effectiveness would
require premature disclosure of material nonpublic information that would
materially and adversely affect Registrant or otherwise interfere with or
adversely affect any pending or proposed offering of securities of Registrant
or any other material transaction involving Registrant. If consummation of the
sale of any Registrable Securities pursuant to a registration hereunder does
not occur within 90 days after the filing with the SEC of the initial
registration statement therefor, the provisions of this Section 7 will again be
applicable to any proposed registration. The Registrant will use all
reasonable efforts to cause any Registrable Securities registered pursuant to
this Section 7 to be qualified for sale under the securities or blue sky laws
of such jurisdictions as the Holder may reasonably request and will continue
such registration or qualification in effect in such jurisdictions; provided,
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however, that the Registrant will not be required to qualify to do business in,
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or consent to general service of process in, any jurisdiction by reason of this
provision. If Registrant effects a registration under the Securities Act of
Company Common Stock for its own account or for any other stockholders of
Registrant (other than on Form S-4 or Form S-8, or any successor form), it will
allow Holder the right to participate in such registration by selling its
Registrable Securities, and such participation will not affect the obligation
of Registrant to effect demand registration statements for Holder under this
Section 7; provided that, if the managing underwriters of such offering advise
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Registrant in writing that in their opinion the number of shares of Company
Common Stock requested to be included in such registration exceeds the
reasonable number which can be sold in such offering, Registrant will include
the shares requested to be included therein by Holder pro rata with the shares
intended to be included therein by Registrant.
(c) The registration rights set forth in this Section 7 are subject
to the condition that the Holder will provide the Registrant with such
information with respect to the Holder's Registrable Securities, the plan for
distribution thereof, and such other information with respect to the Holder as,
in the reasonable judgment of counsel for the Registrant, is necessary to
enable the Registrant to include in a registration statement all facts required
to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 7 will be effected at
the Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant will provide
to the underwriters such documentation (including certificates, opinions of
counsel and "comfort" letters from auditors) as are customary in connection
with underwritten public offerings and as such underwriters may reasonably
require. In connection with any registration, the Holder and the Registrant
agree to enter into an underwriting agreement reasonably acceptable to each
such party, in form and substance customary for transactions of this type with
the underwriters participating in such offering.
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(e) Indemnification.
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(i) The Registrant will indemnify the Holder, each of its
directors and officers and each person who controls the Holder within the
meaning of Section 15 of the Securities Act, and each underwriter of the
Registrant's securities, with respect to any registration, qualification or
compliance which has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, or any violation by the Registrant of any rule or
regulation promulgated under the Securities Act applicable to the Registrant in
connection with any such registration, qualification or compliance, and the
Registrant will reimburse the Holder and, each of its directors and officers
and each person who controls the Holder within the meaning of Section 15 of the
Securities Act, and each underwriter for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action; provided, that the
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Registrant will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Registrant by such Holder or director or officer or controlling person or
underwriter seeking indemnification.
(ii) The Holder will indemnify the Registrant, each of its
directors and officers and each underwriter of the Registrant's securities
covered by such registration statement and each person who controls the
Registrant within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
such registration statement, prospectus, offering circular or other document,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Holder of any rule or regulation
promulgated under the Securities Act applicable to the Holder in connection
with any such registration, qualification or compliance, and will reimburse the
Registrant, such directors, officers or control persons or underwriters for any
legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability
or action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Registrant by the Holder for use therein; provided, that in no event
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will any indemnity under this Section 7(e) exceed the net proceeds of the
offering received by the Holder.
(iii) Each party entitled to indemnification under this
Section 7(e) (the "Indemnified Party") will give notice to the party required
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to provide indemnification (the "Indemnifying Party") promptly after such
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Indemnified Party has actual knowledge of any claim as
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to which indemnity may be sought, and will permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided, that counsel for the Indemnifying Party, who will conduct the
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defense of such claim or litigation, will be approved by the Indemnified Party
(whose approval will not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense; provided, however,
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that the Indemnifying Party will pay such expense if representation of the
Indemnified Party by counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between the
Indemnified Party and any other party represented by such counsel in such
proceeding, and provided further, however, that the failure of any Indemnified
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Party to give notice as provided herein will not relieve the Indemnifying Party
of its obligations under this Section 7(e) unless the failure to give such
notice is materially prejudicial to an Indemnifying Party's ability to defend
such action. No Indemnifying Party, in the defense of any such claim or
litigation will, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party will be required to indemnify any
Indemnified Party with respect to any settlement entered into without such
Indemnifying Party's prior consent (which will not be unreasonably withheld).
8. Adjustment Upon Changes in Capitalization.
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(a) In the event of any change in the Company Shares by reason of
stock dividends, stock splits, reverse stock splits, mergers (other than the
Merger), recapitalizations, combinations, exchanges of shares and the like, the
type and number of shares or securities subject to the Option, and the Exercise
Price will be adjusted appropriately, and proper provision will be made in the
agreements governing such transaction so that Parent will receive, upon
exercise of the Option, the number and class of shares or other securities or
property that Parent would have received in respect of the Company Shares if
the Option had been exercised immediately prior to such event or the record
date therefor, as applicable.
(b) Without limiting the parties' relative rights and obligations
under the Reorganization Agreement, if the number of outstanding shares of
Company Common Stock increases after the date of this Agreement (other than
pursuant to an event described in Section 8(a)), the number of shares of
Company Common Stock subject to the Option (including those Option Shares which
may have already been exercised) will be adjusted so that it equals 19.9% of
the number of shares of Company Common Stock then issued and outstanding,
without giving effect to any Option Shares.
9. Profit Limitation.
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(a) Notwithstanding any other provision in this Agreement or the
Reorganization Agreement, in no event shall Parent's Total Profit (as defined
below) exceed $12,000,000 (the "Maximum Profit") and, if Parent's Total Profit
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otherwise would exceed the Maximum Profit, Parent, at its sole discretion shall
either (i) reduce the number of Option Shares subject to the Option, (ii) pay
cash to the Company, or (iii) any combination of the foregoing, so that
Parent's actual realized Total Profit shall not exceed the Maximum Profit after
taking into account the foregoing
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actions; provided, however, that to the extent the payment by the Company of
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cash to Parent in satisfaction of the Termination Fee pursuant to Section 7.03
of the Reorganization Agreement would cause Parent's Total Profit to exceed the
Maximum Profit (after Parent has had an opportunity to reduce Parent's Total
Profit pursuant to this Section 9(a)), then the Company need not pay such cash
portion of the Termination Fee.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
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aggregate amount (before taxes) of (i) (A) any amounts received by Parent on
the repurchase of the Option by the Company pursuant to Section 6, plus (B) any
Termination Fee paid by the Company and received by Parent pursuant to the
Reorganization Agreement, minus (ii) the amounts of any cash previously paid by
Parent to the Company pursuant to Section 2.
(c) For purposes of Section 9(a) and clause (i) of Section 9(b), the
value of any Option Shares delivered by Parent to the Company shall be the
Market/Tender Offer Price of such Options Shares.
10. Restrictive Legends. Each certificate representing Option Shares
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issued to Parent hereunder will include a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF OCTOBER
26, 2000, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such reference if such Option Shares have been
registered pursuant to the Securities Act, such Option Shares have been sold in
reliance on and in accordance with Rule 144 under the Securities Act or Holder
has delivered to Registrant a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Registrant
and its counsel, to the effect that such legend is not required for purposes of
the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend will be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do not
require the retention of such reference.
11. Listing and HSR Filing. The Company, upon the request of Parent, will
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promptly file an application to list the Company Shares to be acquired upon
exercise of the Option for quotation on the Nasdaq National Market (or any other
national securities exchange or quotation system or which the Company Common
Stock is then listed) and will use its best efforts to obtain approval of such
listing as soon as practicable. Promptly after the date hereof, each of the
parties hereto will promptly file with the Federal Trade Commission and the
Antitrust Division of the United States
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Department of Justice all required premerger notification and report forms and
other documents and exhibits required to be filed under the HSR Act to permit
the acquisition of the Company Shares subject to the Option at the earliest
possible date.
12. Binding Effect. This Agreement will be binding upon and inure to the
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benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained in this Agreement, express or implied, is intended
to confer upon any person other than the parties hereto and their respective
successors and permitted assigns any rights or remedies of any nature whatsoever
by reason of this Agreement. Any shares sold by a party in compliance with the
provisions of Section 7 will, upon consummation of such sale, be free of the
restrictions imposed with respect to such shares by this Agreement and any
transferee of such shares will not be entitled to the rights of such party.
Certificates representing shares sold in a registered public offering pursuant
to Section 7 will not be required to bear the legend set forth in Section 10.
13. Specific Performance. The parties hereto recognize and agree that if
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for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party hereto agrees that in addition to
other remedies the other party hereto will be entitled to an injunction
restraining any violation or threatened violation of the provisions of this
Agreement or the right to enforce any of the covenants or agreements set forth
herein by specific performance. In the event that any action will be brought
in equity to enforce the provisions of the Agreement, neither party hereto will
allege, and each party hereto hereby waives the defense, that there is an
adequate remedy at law.
14. Entire Agreement. This Agreement and the Reorganization Agreement
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(including the appendices thereto) constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof.
15. Further Assurances. Each party hereto will execute and deliver all
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such further documents and instruments and take all such further action as may
be necessary in order to consummate the transactions contemplated hereby.
16. Validity. The invalidity or unenforceability of any provision of this
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Agreement will not affect the validity or enforceability of the other provisions
of this Agreement, which will remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto will negotiate
in good faith and will execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
17. 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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(a) if to Parent, to:
Microchip Technology Incorporated
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
(b) if to the Company, to:
Telcom Semiconductor, Inc.
1300 Terra Bella Avenue
Mountain View, California 94043
Attention: Chief Executive Officer
Telecopy No.: (650) 940-9633
with a copy to:
Jenkens & Gilchrist, a Professional Corporation
1445 Ross Avenue
Suite 3200
Dallas, TX 75202
Attention: John R. Holzgraefe, Esq.
Gregory J. Schmitt, Esq.
Telecopy No.: (214) 885-4300
18. Governing Law. This Agreement will be governed by and construed in
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accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State.
19. Expenses. Except as otherwise expressly provided herein or in the
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Reorganization Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement will be paid by the party incurring
such expenses.
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<PAGE>
20. Amendments; Waiver. This Agreement may be amended by the parties
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hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
21. Assignment. Neither of the parties hereto may sell, transfer,
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assign or otherwise dispose of any of its rights or obligations under this
Agreement or the Option created hereunder to any other person, without the
express written consent of the other party, except that the rights and
obligations hereunder will inure to the benefit of and be binding upon any
successor of a party hereto.
22. Counterparts. This Agreement may be executed in counterparts, each of
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which will be deemed to be an original, but both of which, taken together, will
constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
MICROCHIP TECHNOLOGY INCORPORATED
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
TELCOM SEMICONDUCTOR, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
[Signature Page to Stock Option Agreement]
