STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (as amended from time to time, this
"Agreement"), dated as of April ___, 2000, by and among: (i) Actel Integrated
Communications, Inc., an Alabama corporation (the "Company"), (ii) the
Purchasers (the "Series E Investors") listed on Schedule 1 to the Stock Purchase
Agreement dated as of the date hereof (the "Stock Purchase Agreement"), (iii)
the holders of the Company's common stock, without par value per share (the
"Common Stock"), listed on the signature pages hereto (the "Common
Stockholders") and (iv) the other holders of Series A Preferred Stock, Series B
Preferred Stock or Series D Preferred Stock of the Company listed on the
signature pages hereto (the "Other Preferred Stockholders"; together with the
Series E Investors, the Common Stockholders and such other Persons who may
become party to this Agreement pursuant to its terms, the "Stockholders").
WHEREAS, the Common Stockholders own substantially all of the issued and
outstanding shares of the Company's Common Stock; and
WHEREAS, concurrently with the execution and delivery of this Agreement and
pursuant to the Stock Purchase Agreement, the Company has agreed to issue and
sell to the Series E Investors, and the Series E Investors have severally agreed
to purchase from the Company, certain shares of the Company's Series E
Convertible Preferred Stock, par value $0.01 per share (the "Series E Preferred
Stock"), subject to the terms and conditions set forth in the Stock Purchase
Agreement; and
WHEREAS, the obligation of the Series E Investors to enter into the Stock
Purchase Agreement and purchase the Series E Preferred Stock is conditioned upon
the execution and delivery by each of the parties hereto of this Agreement; and
WHEREAS, the parties hereto desire to set forth their mutual agreement
regarding various matters relating to the Company, including certain
restrictions with respect to the ownership of shares of the Company's capital
stock, corporate governance and certain other matters;
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Definitions. As used in this Agreement, the following
-------------------
terms shall have the following respective meanings:
"Affiliate" means, with respect to any Person, any Person that, directly or
indirectly, controls, is controlled by or is under common control with such
first-named Person. For the purposes of this definition, "control" (including
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise. In
addition, in the case of each Stockholder that is a partnership, an "Affiliate"
of such Stockholder shall include the partners thereof.
"Bylaws" means the Company's Bylaws, as the same may hereafter be amended
in accordance with applicable law and the terms thereof and hereof.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock Equivalents" means any stock, warrants, rights, calls,
options, debt or other securities exchangeable or exercisable for or convertible
into Common Stock.
"Common Stockholder Shares" means, collectively, the shares of Common Stock
held by the Common Stockholders, including shares of Common Stock issuable upon
conversion of any option, warrant or other convertible security granted or
issued by the Company, whether outstanding as of the date of this Agreement or
granted or issued thereafter.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
including the rules and regulations of the Commission promulgated thereunder.
"Fully-Diluted Basis" gives effect, as of the date of the determination,
without duplication, to (i) all shares of Common Stock outstanding at the time
of determination plus (ii) all shares of Common Stock issuable upon conversion
of
2
<PAGE>
the Series E Preferred Stock or any other convertible securities of the Company
or upon the exercise of any then vested option, warrant or similar right
(whether or not presently exercisable) to acquire shares of Common Stock, as if
such Series E Preferred Stock or other convertible securities had been so
converted or such option, warrant or similar right had been so exercised.
"Investor Group" means the Series E Investors and their Permitted
Transferees who have acquired Series E Preferred Stock in accordance with this
Agreement, as a group.
"Percentage Ownership" means, as of the date of determination, with respect
to any Stockholder, such Stockholder's ownership of Common Stock (including,
without limitation, securities of the Company convertible into Common Stock as a
percentage of the outstanding Common Stock on a Fully-Diluted Basis.
"Permitted Transferee" means:
(a) with respect to any Series E Investor: (i) any Affiliate of
such Series E Investor; (ii) any other member of the Investor Group; or (iii)
the Company; and
(b) with respect to any Common Stockholder: (i) any Affiliate of
such Common Stockholder; (ii) any member of the Investor Group; (iii) the
Company; (iv) any Common Stockholder; (v) any member of the immediate family and
lineal descendants of a Common Stockholder, that is an individual, or any
limited partnership, limited liability company or custodianship, exclusively for
the benefit of such Common Stockholder, his spouse or his lineal descendants or,
if at any time after any such transfer there shall be no then living spouse or
lineal descendants, then to the ultimate beneficiaries of any such trust or for
the estate of a deceased beneficiary; or (vi) the estate, executors,
testamentary trustees, beneficiaries, legatees, administrators or personal
representatives of a Common Stockholder (only upon the death of such Common
Stockholder).
(c) "Person" means any individual, corporation, partnership,
limited liability company, limited liability partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Stock" means all authorized and issued shares of Series E
Preferred Stock and all other authorized and issued preferred stock of the
Company (including all Securities issued or issuable on such shares as a
dividend or otherwise) or upon conversion of or upon exercise of a right under
such shares.
3
<PAGE>
"Qualified Public Offering" means the closing of an underwritten firm
commitment public offering, pursuant to an effective registration statement
under the Securities Act (other than a registration statement on Form S-4, S-8
or similar form), covering the offer and sale of Common Stock to the public at a
public offering price of at least $12.00 per share (subject to appropriate
adjustment for Recapitalization Events) and that results in at least $75,000,000
of gross proceeds to the Company.
"Recapitalization Events" shall mean stock splits, stock dividends,
combinations, recapitalizations, reorganizations, reclassifications, mergers,
consolidations and other similar events.
"Registration Rights Agreement" means that certain Agreement, dated as of
April ___, 2000, by and among the Company and the Series E Investors, as the
same may be amended from time to time.
"Securities" means shares of Common Stock or Common Stock Equivalents or
other securities of the Company, other than debt securities that are not Common
Stock Equivalents, whether owned on the date hereof or hereafter acquired.
"Securities Act" means the Securities Act of 1933, as amended, including
the rules and regulations of the Commission promulgated thereunder.
"Series E Preferred Stock" means all shares of Series E Convertible
Preferred Stock, par value $0.01 per share, of the Company purchased by the
Series E Investors pursuant to the Stock Purchase Agreement or distributed to
the Series E Investors by the Company, and shall be deemed to include, to the
extent the context so permits, all Securities issued or issuable to any Series E
Investor, including, without limitation, on conversion of any such shares of
Series E Preferred Stock, as well as any such shares of Series E Preferred Stock
from time to time acquired from a Series E Investor by a Permitted Transferee
(other than the Company) pursuant to this Agreement, including without
limitation Securities held by a Permitted Transferee as a result of conversion
of Series E Preferred Stock.
"Stock Purchase Agreement" means that certain Stock Purchase Agreement,
dated as of April ___, 2000, by and among the Company and the Series E
Investors, as the same may amended from time to time.
"Subsidiary" means, with respect to the Company, (i) any corporation that,
as of the applicable time, the Company and/or its subsidiaries own equity
securities with voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have voting power by reason of the happening
of any
4
<PAGE>
contingency) and (ii) any partnership, limited liability company, association,
joint venture or other entity or other entity (a) in which, at the time, the
Company and/or one or more Subsidiaries of the Company has more than 50% equity
interest at the time or (b) as to which, at the time, the Company and/or one or
more of its Subsidiaries is the general partner or managing member, by contract
or otherwise.
"Transfer" (including with correlative meanings the terms "Transferred",
"Transferee" and "Transferor") means, directly or indirectly, any transfer,
sale, distribution, assignment, pledge, encumbrance or other disposition of
Securities or the rights to acquire Securities therein, irrespective of whether
any of the foregoing are effected voluntarily or involuntarily, by operation of
law or otherwise, or whether inter vivos or upon death.
ARTICLE 2
TRANSFERS OF STOCK
SECTION 2.1 General Restrictions.
----------------------
(a) No Stockholder shall Transfer or otherwise dispose of any
Securities at any time, unless such Transfer complies with Article 2 of this
Agreement.
(b) Prior to the earlier of (x) the third anniversary of the date
hereof and (y) the date of consummation of an IPO (as defined below), no
Stockholder may Transfer all, or any part of, or interest in, the Securities
held by it at any time other than to a Permitted Transferee of such Stockholder
(including transferees pursuant to Section 2.5 hereof) (provided, however, that
these restrictions shall not apply to: (i) any transfer by Murdock
Communications Corporation of some or all of its Series A Preferred Stock in any
private placement transaction that is consummated prior to May 29, 2000; or (ii)
the transfer by Rich Courtney of up to 200,000 shares of Common Stock of the
Company owned by him, provided, in each case, that any Persons purchasing such
shares of Series A Preferred Stock or Common Stock shall have become, prior to
or upon the effective date of such purchase, parties to this Agreement and shall
have agreed to be bound by the terms, conditions and obligations of this
Agreement, including without limitation, those that relate to subsequent
Transfers of such Securities; provided, however, in both cases, the Transferees
must be reasonably satisfactory to the Series E Investors. No Transfer to a
Permitted Transferee shall be made pursuant to the immediately preceding
sentence unless the Permitted Transferee (except in any instance in which such
Permitted Transferee is the Company) shall have executed and delivered to the
Company, as a condition to its acquisition of
5
<PAGE>
such Securities, an instrument in form and substance reasonably satisfactory to
the Company confirming that such Permitted Transferee takes such Securities, or
interest therein, subject to, and agrees to be bound by, all the terms,
conditions and obligations of this Agreement. No Transfer shall be made other
than in accordance with the registration requirements of the Securities Act and
all applicable state securities or "blue sky laws" or pursuant to any exemption
from registration under the Securities Act and all applicable state securities
laws or "blue sky laws." Notwithstanding the foregoing provisions of this
section 2.1(b), the restrictions imposed by this section 2.1(b) upon the
transferability of any Securities shall terminate when such Securities have been
registered under the Securities Act and sold by the holder thereof in accordance
with such registration or sold pursuant to Rule 144 under the Securities Act
(after receipt by the Company of a legal opinion from counsel reasonably
satisfactory to the Company that such transfer is permitted). In connection
with the termination of restrictions on transferability of Securities provided
for hereunder, the holder of a certificate representing such Securities as to
which such restrictions shall have terminated shall be entitled to receive from
the Company, upon surrender to the Company of the Certificate(s) representing
such Securities, one or more new certificates for such Securities not bearing
the restrictive legend set forth in section 2.3; provided, however, that any
legend endorsed on any such certificate under applicable state securities laws
and the stop transfer instructions with respect to such shares shall be removed
only upon receipt by the Company of an order of the appropriate state securities
authority authorizing such removal. Prior to any proposed Transfer of any
Securities (other than pursuant to a registration of such Securities under the
Registration Rights Agreement), the holder thereof shall give written notice to
the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company
(only in the case of Transfers other than to a Permitted Transferee), shall be
accompanied by an opinion of counsel reasonably satisfactory to the Company to
the effect that (i) the proposed transfer of the Common Shares may be effected
without registration under the Securities Act; and (ii) the proposed transfer of
the Common Shares complies with the limitations on transfers set forth in
Article 2 of this Agreement.
(c) The rights granted to each Stockholder under this Article 2
shall inure to the benefit of any of its respective Permitted Transferees as
though such Permitted Transferee were the same type of stockholder as the
Transferor; provided, however, that such Permitted Transferee shall be required
to comply with all applicable provisions of this Article 2 to the same extent as
the Transferor Stockholder.
6
<PAGE>
SECTION 2.2 Preemptive Rights.
-------------------
(a) Subject to Section 2.2(e) hereof, each Series E Investor and
its Transferees, successors and assigns (each, a "Holder") shall be entitled to
a preemptive right to purchase its pro rata share of all or any part of any New
Securities (as defined below) which the Company may, from time to time, sell and
issue. Such Holder's pro rata share, for purposes of this preemptive right, is
the ratio that the number of whole shares of Common Stock then held by such
Holder on a Fully-Diluted Basis bears to the total number of shares of the then
outstanding shares of Common Stock of the Company on a Fully-Diluted Basis.
(b) Except as set forth in the next sentence, "New Securities"
shall mean any shares of capital stock of the Company, including Common Stock,
whether or not now authorized, and rights, options or warrants to purchase said
shares of capital stock of the Company. Notwithstanding the foregoing, "New
Securities" does not include (i) securities offered to employees, officers,
managers or directors pursuant to plans approved by the Board of Directors, or
under options approved by the Board of Directors; (ii) securities issued in
connection with the acquisition of another Person or business or a material
portion of the assets thereof by the Company by merger, purchase of assets or
otherwise or in a transaction governed by Rule 145 under the Securities Act;
(iii) securities issued on conversion of any outstanding securities (including
the Series E Preferred Shares or outstanding rights to acquire Securities); (iv)
securities issued in connection with the purchase or acquisition of equipment
from third party vendors and approved by the Board of Directors; (v) securities
issued pursuant to a public offering of securities of the Company (including an
offering pursuant to Rule 144A under the Securities Act); (vi) securities issued
pursuant to the conversion or exercise of rights under securities or agreements
outstanding as of the date hereof, (vii) as approved by the Board of Directors;
(viii) securities issued pursuant to the Company's credit facilities; or (ix)
securities issued in connection with a Recapitalization Event.
(c) In the event the Company proposes to undertake an issuance of
New Securities, it shall give the Holders of the Series E Preferred Stock
written notice of its intention, describing the type of New Securities, and the
price and terms upon which the Company proposes to issue the same. Each Holder
of Series E Preferred Stock shall have fifteen (15) days from the date of
receipt of any such notice to agree to purchase up to its respective pro rata
share of such New Securities for the price and upon the terms specified in the
notice by giving written notice to the Company and stating therein the quantity
of New Securities to be purchased.
7
<PAGE>
(d) In the event a Holder fails to exercise such preemptive right
within said fifteen-day period (each such Holder a "Non-Electing Holder"), the
Company shall give the Holders that have elected to exercise such preemptive
right within said thirty-day period (each such Holder an "Electing Holder")
written notice of each Non-Electing Holder's failure to exercise its preemptive
right to purchase its pro rata share of the New Securities (such securities, the
"Additional New Securities"). Each Electing Holder shall have ten (10) days
from the date of receipt of any such notice to elect to purchase up to its pro
rata share of the Additional New Securities by giving written notice to the
Company and stating therein the quantity of such New Securities to be purchased.
(e) In the event any Electing Holder fails to exercise its
preemptive rights pursuant to section 2.2(d), or in the event no Holders
exercise their respective preemptive rights, within said twenty-five-day period,
the Company shall have (120) days thereafter to sell or enter into an agreement
(pursuant to which the sale of such New Securities covered thereby shall be
closed, if at all, within (60) days from the date of said agreement) to sell
such New Securities not elected to be purchased by Holders at the price and upon
the terms no more favorable to the purchasers of such securities than specified
in the Company's notice. In the event the Company has not sold such New
Securities or entered into an agreement to sell the Additional New Securities
within said twenty-five day period (or sold and issued Additional New Securities
in accordance with the foregoing within 60 days from the date of said
agreement), the Company shall not thereafter issue or sell such New Securities,
without first offering such securities in the manner provided in this section
7.2.
(f) The preemptive rights granted under this section 2.2 shall
expire upon the earliest of: (A) the conversion of Series E Preferred Stock
into Common Stock; (B) the closing of (and shall not apply to) a bona fide
underwritten initial public offering; and (C) the date on which the Holders and
their Affiliates no longer own, in the aggregate, at least 5% of the outstanding
Common Stock (on an "as-converted" basis) of the Company.
2.3 Restrictive Legend. Unless and until otherwise permitted by
-------------------
section 2.1, each certificate for Common Stock or Preferred Stock issued to each
Stockholder, or to any subsequent Permitted Transferee of such certificate,
shall be stamped or otherwise imprinted with the following restrictive legend in
addition to any legend required by applicable law:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS
AGREEMENT AMONG ACTEL INTEGRATED COMMUNICATIONS, INC. (THE "COMPANY") AND THE
STOCKHOLDERS FROM
8
<PAGE>
TIME TO TIME PARTIES THERETO, A COPY OF WHICH AGREEMENT IS ON FILE WITH THE
SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND
(A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH AN OPINION
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS
AGREEMENT, INCLUDING RESTRICTIONS RELATING TO THE EXERCISE OF ANY VOTING RIGHTS
GRANTED BY THE SECURITIES."
SECTION 2.4 Effect of Void Transfers. In the event of any purported
----------------------------
Transfer of any Securities of the Company in violation of the provisions of this
Agreement, such purported Transfer shall be void ab initio and of no effect and
the Company shall not give effect to such Transfer.
SECTION 2.5 Pledges. Each Management Stockholder will be permitted to
--------
pledge Securities of the Company held by such Management Stockholder so long as
such pledges agrees in writing to be bound by the terms of this Agreement.
SECTION 2.6 Tag-Along Rights.
------------------
(a) So long as the Series E Investors and their Permitted
Transferees beneficially own (as defined under the Exchange Act) in the
aggregate at least 5% of the outstanding Common Stock (including securities
convertible into Common Stock) on a Fully-Diluted Basis, in the event that a
Series E Investor or any of its Permitted Transferees proposes to transfer at
any time all or any portion of the outstanding Common Stock (including
securities convertible into Common Stock) beneficially owned by such Series E
Investor and/or Permitted
9
<PAGE>
Transferees ("Selling Stockholder"), other than (1) in a bona fide public
offering, (2) pursuant to Rule 144 (or any successor provision) under the
Securities Act or (3) to one or more Permitted Transferees, the Selling
Stockholder making such transfer will notify each of the other Stockholders in
writing (a "Transfer Notice") of such proposed sale (A "Proposed Sale") and the
material terms of the Proposed Sale as of the date of the Transfer Notice (the
"Transfer Terms"). The Transfer Notice will be delivered to the Stockholders
not less than fifteen (15) days prior to the consummation of the Proposed Sale
and not more than five (5) days after the execution of the definitive agreement
relating to the Proposed Sale, if any (the "Sale Agreement"). If within ten
(10) days of receipt by the Stockholders of such Transfer Notice, the Selling
Stockholder thereof delivering such notice receives from any Stockholder and/or
its Permitted Transferees a written request (a "Stockholder Request") to include
in the Proposed Sale Common Stock or other securities of the Company owned by
such Stockholder or Permitted Transferee, the Stockholder's and/or its Permitted
Transferee's Common Stock or other securities so requested will be so included
as provided herein.
(b) Except as may otherwise be provided herein, the Common Stock
or other securities of the Company subject to a Transfer Request will be
included in a Proposed Sale pursuant hereto and in any agreements with
purchasers relating thereto on the same terms and subject to the same conditions
applicable to the Common Stock or other securities which the Selling Stockholder
hereof proposes to sell in the Proposed Sale. Such terms and conditions shall
include, without limitation: the sales price; the payment of fees; commissions
and expenses; the provision of representations, warranties and indemnifications;
provided that any indemnification provided by the Selling Stockholders that has
submitted a Stockholder Request shall (except with respect to legal title to the
relevant securities) be pro rata in proportion with the total consideration to
be received for all of the Common Stock and/or other securities to be sold. The
sales price to which holders of shares of Common Stock, Series A Preferred
Stock, Series B Preferred Stock and Series D Preferred Stock shall be entitled
in such Proposed Sale shall be calculated based on the assumption that,
immediately prior to the consummation of the Proposed Sale, each of the Series A
Preferred Stock, the Series B Preferred Stock, the Series D Preferred Stock and
the Series E Preferred Stock were converted into Common Stock and all of the
shares of Common Stock (including the shares of Preferred Stock so deemed to be
converted) received the same per share consideration in the Proposed Sale.
(c) The number of shares of Common Stock or other securities by
the Company which each Stockholder and/or Permitted Transferee thereof that has
submitted a Stockholder Request (a "Co-Sale Seller") will have the right to
require the proposed Transferee to purchase from such Co-Sale Seller in the
Proposed Sale pursuant to a Stockholder Request will be a number of shares of
10
<PAGE>
Common Stock and other securities up to the product (rounded up to the nearest
whole number) of: (i) the quotient determined by dividing [A] the aggregate
number of shares of Common Stock owned by such Co-Sale Seller on an "as
converted basis" by [B] the aggregate number of Common Stock beneficially owned
by all Selling Stockholders and the aggregate number of Securities beneficially
owned by all Co-Sellers, in each case, on an "as converted basis"; and (ii) the
total number of Common Stock on an "as converted basis" proposed to be acquired
by the Transferee in the contemplated transfer. For purposes of this
subparagraph (c), "as converted basis" shall mean that any securities of the
Company that are convertible into shares of Common Stock are assumed to be
converted at the exclusive or conversion price applicable under the terms of
such securities as of the date of the Transfer Notice.
(d) Upon delivering a Stockholder Request, such Stockholder or
Permitted Transferee thereof will, if requested by the Selling Stockholder,
execute and deliver a custody agreement and power of attorney in form and
substance satisfactory to the Selling Stockholder which is to sell such Common
Stock or other securities of such Stockholder or Permitted Transferee thereof
pursuant hereto. Such custody agreement and power of attorney will provide,
among other things, that such Stockholder and/or Permitted Transferee will
deliver to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such Common Stock (duly
endorsed in blank by the registered owner or owners thereof) or other securities
and irrevocably appoint such custodian and attorney-in-fact as his agent and
attorney-in-fact with full power and authority to act under such custody
agreement and power of attorney on his behalf with respect to the matters
specified therein.
ARTICLE 3
BOARD OF DIRECTORS
SECTION 3.1 Composition of Board of Directors.
-------------------------------------
(a) Prior to the date on which the Company consummates a bona fide
underwritten public offering of Common Stock pursuant to an effective
registration statement under the Securities Act (other than Form S-8 or any
successor or similar form) (an "IPO"): (i) the Board of Directors of the
Company (the "Board") shall consist of seven (7) members; (ii) stockholders
shall have the right to nominate directors as set forth below; (iii) subject to
section 3.4(g), all Stockholders shall comply with the provisions of this
Article 3 to ensure that designees are appointed or elected, as the case may be,
to (or removed from) the Board; and (iv) the rights described in the provisions
of this Article 3 are personal to the party named in such provision and cannot
be assigned.
11
<PAGE>
(b) Nominees for election to the Board pursuant to Sections 3.1(c)
and (d) will be chosen by majority vote of the persons or group entitled to make
such nomination under this Agreement that continue to own Securities on such
date.
(c) Prior to the earlier of (i) the date on which the Company
consummates an IPO and (ii) the date on which the holders of Common Stock on the
date hereof and their Permitted Transferees no longer beneficially own (as such
term is defined in the Exchange Act) at least 50% of the shares of Common Stock
held by such holders of Common Stock on the date hereof (after giving effect to
any Recapitalization Events), the Common Stockholders on the date hereof shall
have the right to designated one (1) individual to be director (the "Common
Stock Director").
(d) Prior to the date on which the Company consummates a Qualified
Public Offering, the Series E Investors shall have the right to nominate four
(4) individuals to be directors (each, a "Series E Director") with Sandler
Capital Management and its Affiliates (collectively, "Sandler") having the right
to designate two (2) of the four directors and DB Capital Partners, SBIC, L.P.
and its Affiliates (collectively, "DBCP") having the right to designate two (2)
of the four directors.
Notwithstanding anything herein to the contrary, if all of the conditions
to the Second Closing Date and the Third Closing Date, as the case may be (as
defined in the Stock Purchase Agreement) have been satisfied and if Sandler or
DBCP, as the case may be, fails to perform any funding obligations to purchase
the Series E Preferred Stock at the Second Closing Date and the Third Closing
Date, as the case may be, Sandler or DBCP, as the case may be, will lose the
right to designate one director.
(e) Prior to the date of consummation of an IPO, by unanimous
written consent, the Common Stock Director and Series E Directors shall have the
right to nominate one (1) individual to be director (the "Independent
Director"). Such director shall be independent and not an Affiliate of the
Common Stock Director or Series E Investors or their respective Permitted
Transferees.
(f) Prior to the date of consummation of an IPO, one (1) director
shall be the President and Chief Executive Officer of the Company (the "CEO
Director").
(g) Prior to the earlier of (i) the date of consummation of an IPO
and (ii) the date on which the Series E Investors no longer own in the aggregate
at lest 25% of the outstanding Common Stock on a Fully-Diluted Basis, the
Chairman of the Board shall be selected by the majority of the voting power of
the Series E Investors.
12
<PAGE>
(h) Following the date on which the Company consummates a
Qualified Public Offering and until such date as Sandler or DBCP, as the case
may be, no longer own at least 2.5% of the shares of Common Stock then
outstanding or 25% of the Common Stock (through the conversion of the Series E
Preferred Stock) originally purchased by Sandler or DBCP, as the case may be,
under the Stock Purchase Agreement, (x) each Stockholder agrees to vote the
shares of Common Stock owned of record by them in favor of one nominee for
director named by Sandler and one nominee for director named by DBCP and (y) the
Company shall, subject to the fiduciary duties of the Board of Directors, cause
each director named by Sandler and DBCP to be nominated for election. Following
the date on which the Company consummates an IPO and until the earlier of such
date as: (i) the consummation of a Qualified Public Offering; and (ii) the
Common Stockholders no longer own at least 25% of the aggregate shares of Common
Stock held by them as of the date hereof, (x) the Series E Investors each agree
to vote the shares of Common Stock owned of record by them in favor of each of
the Independent Director, the CEO Director and the Common Stock Director and (y)
the Company shall, subject to the fiduciary duties of the Board of Directors,
cause each such director to be nominated for election.
(i) Upon a Transfer by Sandler or DBCP, as the case may be, of 50%
or more of their respective shares of Series E Preferred Stock (or underlying
shares of Common Stock), the transferee in such Transfer shall be entitled to
exercise all of Sandler's or DBCP's, as the case may, director designation
rights under this section 3.1.
SECTION 3.2 Removal. Each director nominated as aforesaid by any
-------
Stockholder or group of Stockholders and duly elected to the Board shall be
subject to removal only at the request of the Stockholder or group of
Stockholders which nominated or designated such director.
SECTION 3.3 Election of Directors. Prior to the date of consummation of
----------------------
an IPO (or a Qualified Public Offering, in the case of Board nominees designated
by Series E Investors), each Stockholder shall vote all of its shares of
Securities, as applicable, for the election (or removal) of the nominees
designated as provided in sections 3.1(c), (d), (e) and (f) hereof and, in the
event of a vacancy in the Board created by the death, resignation or removal of
a director, shall vote its shares of Securities, as applicable, for the election
of a nominee to be designated by the Stockholder or group of Stockholders which
nominated or designated such director (unless such vacancy has resulted from the
termination of the power of such group to nominate such director, in which case
the replacement nominee may be designated by the Board). Prior to the date of
consummation of an IPO (or a Qualified Public Offering, in the case of Board
nominees designated by Series E Investors), the Company shall take such lawful
action as shall be reasonably required in order to facilitate the nomination,
removal and election of directors as aforesaid.
13
<PAGE>
SECTION 3.4 Other Board Matters. Prior to the completion of an IPO:
---------------------
(a) except as otherwise set forth in this Agreement, an action or
decision of the Board shall require the consent or vote of a majority of the
Directors;
(b) a majority of the total number of incumbent directors
(including the Common Stock Director, CEO Director or Independent Director)
shall be necessary to constitute a quorum for the transaction of business at any
meeting of the Board (provided that the Common Stock Director, CEO Director or
Independent Director shall not be entitled to refuse to attend a properly called
meeting for the purpose of preventing a quorum (a "Boycott") and if such Common
Stock Director, CEO Director or Independent Director refuses to attend more than
two (2) consecutive meetings without just cause, such refusal shall constitute a
"De Factor" Boycott);
(c) except as otherwise provided in this Agreement, the action of
a majority of the Directors present at any meeting at which there is a quorum,
when duly assembled, is valid;
(d) unless as otherwise set forth in this Agreement, a meeting at
which a quorum is initially present may continue to transact business,
notwithstanding the withdrawal of Directors, if any action taken is approved by
a majority of the required quorum for such meeting;
(e) the Board may designate one or more committees, including,
without limitation, an Executive Committee, to have and exercise such power and
authority as the Board shall specify, provided that each Person or group of
Persons that then has a right to designate directors of the Company as set forth
above shall also have the right to designate a number of members to such
Committee in the same portion as the number of directors that such Person or
group of Persons may then designate as compared to the size of the board
(provided that if such Person or group of Persons then has the right to
designate at least one director, such Person or group of Persons shall have the
right to designate at least one member of each such committee);
(f) the following actions shall not be taken by the Company or any
Subsidiary without obtaining the approval of at least a five-member majority of
the Board (including at least one of the CEO Director, the Common Stock Director
or the Independent Director):
(i) appoint, dismiss or replace the Chief Executive Officer
of the Company or any Subsidiary or replace him as a board nominee,
14
<PAGE>
(ii) enter into any agreement for obtaining credit or
financing from a third party lender permitting aggregate borrowings thereunder
of $100 million or more,
(iii) enter into a merger, recapitalization, reorganization,
consolidation or similar transaction with another Person (other than
transactions involving solely the Company and/or one or more of its
Subsidiaries), enter into a plan or arrangement of reorganization, liquidate or
dissolve, or sell, lease or transfer all or substantially all of the assets of
the Company as its Subsidiaries, taken as a whole,
(iv) determine the size of the Board of Directors or any
material Subsidiary or appoint the members of the Board of Directors of any
material Subsidiary,
(v) engage in any transactions between the Corporation or any
Subsidiary, on the one hand, and any Stockholder or Affiliate thereof, on the
other hand (with respect to any such transaction, the approval of at least two
of the CEO Director, the Common Stock Director or the Independent Director shall
also have been obtained),
(vi) amend its articles or by-laws;
(vii) create any non-wholly owned Subsidiaries, or transfer
or sell any stock of a Subsidiary other than to a wholly owned Subsidiary of the
Company or to the Company; or
(viii) expenditures by the Company, individually or in the
aggregate, of more than $1,000,000.
(g) if required, each Stockholder will vote its Securities in a
manner to effect the decisions of the Board of Directors in accordance with this
Section 3.4, unless such Stockholder reasonably determines in good faith, based
on advice of counsel, that such action would violate its fiduciary duties under
applicable law.
(h) until the earlier of the Third Closing Date and the Third
Closing Termination Date, the Board shall meet at least monthly and thereafter
the Board shall meet at least quarterly.
Nothing in Section 3.4(f) shall be construed as preventing the holders of
Series E Preferred Stock from selling their shares of Series E Preferred Stock
at any time after the earlier of the consummation of an IPO and three years from
the
15
<PAGE>
date hereof, if a five-member majority of the Board of Directors of the Company
(including the approval of one of the CEO Director, the Common Stock Director or
the Independent Director) has failed to approve a Transaction involving a Change
of Control (as defined in the Restated Articles) so long as such holders comply
with section 2.6.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS AND THE COMPANY
Each of the Company and each Stockholder (each, a "Representing Party")
hereby severally, but not jointly, represents and warrants to each other
Representing Party as follows as of the date such party executes and delivers
this Agreement:
SECTION 4.1 Organization, Qualification and Power. Such Representing
----------------------------------------
Party (other than any Representing Party which is an individual) is a
corporation or limited partnership, as the case may be, duly organized, validly
existing and in good standing under the laws of the state or foreign
jurisdiction of its organization, and it has the requisite corporate or
partnership power and authority, as the case may be, to own and hold its
properties, and to carry on its business in all material respects as conducted
or presently proposed to be conducted. Such Representing Party (other than any
Representing Party which is an individual) has requisite corporate or
partnership power and authority to execute, deliver and perform this Agreement.
SECTION 4.2 Authorization of Agreement; No Conflict. The execution,
-------------------------------------------
delivery and performance by such Representing Party of this Agreement have been
duly authorized by all requisite corporate, partnership and individual action,
as the case may be, of such Representing Party, if any, and will not violate any
provision of law, any order of any court or other agency of government, any of
such Representing party's organizational documents, if any, or any provision of
any indenture, agreement or other instrument to which such Representing Party or
any of such Representing Party's properties or assets is bound, or conflict,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any such indenture, agreement or other instrument.
SECTION 4.3 Validity. This Agreement has been duly executed and delivered
--------
by such Representing Party and (assuming due execution and delivery by the other
Representing parties) constitutes a legal, valid and binding obligation of such
Representing Party, enforceable against such Representing Party in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
16
<PAGE>
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally and except as to the extent the
availability of equitable remedies may be limited to general principles of
equity.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 Access to Company Records. Prior to the consummation of an
----------------------------
IPO, subject to any confidentiality agreement pursuant to which the Company may
be a party, so long as any party or its Affiliates, collectively, continue to
hold at least 5% of the outstanding Common Stock (on an "as-converted" basis) or
20% of the Series E Preferred Stock originally purchased under the Stock
Purchase Agreement, any party and its Affiliates shall be entitled to review the
financial and corporate books and records of the Company and to meet with the
executive officers and independent accountants of the Company for purposes
reasonably related to such party's ownership of Common Stock or Preferred Stock,
which review and/or meetings shall take place at reasonable times during the
normal business hours of the Company and in such a manner as to unduly interfere
with the conduct of the Company's business.
SECTION 5.2 Press Releases and Filings. For so long as any party and its
---------------------------
Affiliates, collectively, continue to hold at least 5% of the outstanding Common
Stock (on an "as-converted" basis) or 20% of the Series E Preferred Stock
originally purchased under the Stock Purchase Agreement, the Company covenants
and agrees to provide such party or its Affiliates, promptly after release or
filing, with copies of any press releases or other public announcements
concerning the Company and copies of any filing by the Company with the
Commission.
SECTION 5.3 Entire Agreement; Amendment. This Agreement embodies the
-----------------------------
entire agreement of the parties hereto with respect to the subject matter
hereof. Any provision of this Agreement may be amended, waived or modified if,
but only if, such amendment, waiver or modification is in writing and is signed
by: (i) the holders of at least a majority of the Preferred Stock issued to the
Series E Investors under the Stock Purchase Agreement; (ii) the holders of at
least a majority of the Common Stockholder Shares; and (iii) the holders of at
least a majority of the shares held by the Other Preferred Stockholders;
whenever any provision of this Agreement requires action or approval by the
holders of a specified number of Preferred Stock or Common Stockholder Shares,
such action or approval may be evidenced by a written consent executed by the
requisite holders of Preferred Stock or Common Stockholder Shares, without any
requirement of a meeting or prior notice to the other holders of such Preferred
17
<PAGE>
Stock. The parties hereto intend, agree and understand that this Agreement
amends and supersedes and replaces in its entirety any and all prior agreements
pertaining to the subject matter hereof.
SECTION 5.4 Binding Effect; Benefits. This Agreement and all the
--------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and
permitted assigns. Except as expressly provided herein, nothing in this
Agreement is intended to confer on any Persons, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. Nothing in this Agreement
shall be construed to give the Stockholders or any other Person any claim
against the Company or its assets thereof, other than as a stockholder of the
Company.
SECTION 5.5 Additional Securities Subject to Agreement. All the
----------------------------------------------
provisions of this Agreement shall apply, to the full extent set forth herein,
with respect to the Securities of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the
Securities of the Company or such other securities or by reason of any stock
dividend, split, reverse split, combination, recapitalization, reclassification,
merger, consolidation or otherwise.
SECTION 5.6 Notices. All notices, requests, consents, and other
-------
communications hereunder shall be in writing and shall be deemed effectively
given and received when delivered in person or by national overnight courier
service or by certified or registered mail, return receipt requested, or by
facsimile, addressed as follows:
(a) if to the Company at
Actel Integrated Communications, Inc.
450 Laurel Street
Bank One Centre
North Tower
Suite 2101
Baton Rouge, LA 70801
Attention: General Counsel
Telecopier: 225-267-6767
with a copy to:
Gordon, Arata, Mccollam, Duplantis & Eagan, L.L.P.
201 St. Charles Avenue, Suite 4000
New Orleans, Louisiana 70170-4000
Attention: Cathy Chessin
Telecopier: 504-582-1121
18
<PAGE>
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Philip T. Ruegger III
Telecopier: 212-455-2502
(b) if to any Stockholder:
The address reflected on the records of the company or, in any such case,
at such other address or addresses as shall have been furnished in writing by
such party to the others.
SECTION 5.7 Severability. The invalidity, illegality or unenforceability
------------
of one or more of the provisions of this Agreement in any jurisdiction shall not
affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
SECTION 5.8. Headings. The headings of the sections of this Agreement are
---------
inserted for convenience only and shall not constitute a part of this Agreement.
SECTION 5.9 Counterparts. This Agreement may be in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
SECTION 5.10 Applicable Law and Venue.
---------------------------
(a) THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF
LAW.
(b) THE FEDERAL AND STATE COURTS OF THE STATE OF NEW YORK SHALL
HAVE EXCLUSIVE JURISDICTION OVER THE PARTIES WITH RESPECT TO ANY DISPUTE OR
CONTROVERSY BETWEEN THEM ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THOSE COURTS, INCLUDING, BUT NOT LIMITED TO
19
<PAGE>
THE IN PERSONAM JURISDICTION AND SUBJECT MATTER JURISDICTION OF THOSE COURTS,
WAIVES ANY OBJECTIONS TO SUCH JURISDICTION ON THE GROUNDS OF VENUE OR FORUM NON
CONVIENS, THE ABSENCE OF IN PERSONAM OR SUBJECT MATTER JURISDICTION AND ANY
SIMILAR GROUNDS, CONSENTS TO SERVICE OF PROCESS BY MAIL (IN ACCORDANCE WITH
SECTION 7.9) OR ANY OTHER MANNER PERMITTED BY LAW AND IRREVOCABLY AGREES TO BE
BOUND BY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
SECTION 5.11 Further Assurance. Each party hereto shall do and perform or
-----------------
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
SECTION 5.12 Specific Performance. Each of the parties hereto
---------------------
acknowledges and agrees that in the event of any breach of this Agreement, the
nonbreaching party or parties would be irreparably harmed and could not be made
whole by monetary damages. It is accordingly agreed that the parties hereto
will waive the defense in any action for specific performance that a remedy at
law would be adequate and that the parties hereto, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement in any arbitration of this
Agreement or in any action instituted in any court of the United States or any
state thereof having subject matter jurisdiction of such action.
SECTION 5.13 Rights Cumulative; Waiver. The rights and remedies of the
---------------------------
Stockholders and the Company under this Agreement shall be cumulative and not
exclusive of any rights or remedies which any party hereto would otherwise have
hereunder or at law or in equity or by statute, and no failure or delay by any
such party in exercising any right or remedy shall impair any such right or
remedy or operate as a waiver of such right or remedy, nor shall any single or
partial exercise of any power or right preclude such party's other or further
exercise or the exercise of any other power or right. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by
any party hereto to exercise any right or privilege hereunder shall be deemed a
waiver of such party's rights or privileges hereunder or shall be deemed a
waiver of such party's rights to exercise the same at any subsequent time or
times hereunder.
20
<PAGE>
SECTION 5.14 Construction. The use of the singular or plural or masculine,
------------
feminine or neuter gender shall not be given an exclusionary meaning and, where
applicable, shall be intended to include the appropriate number or gender, as
the case may be.
SECTION 5.15 Group Actions. For purposes of this Agreement, any action to
-------------
be taken by a group of Stockholders shall be determined by the vote of the
holders of a majority of such group, unless a greater percentage shall have been
expressly set forth in this Agreement with respect to such action.
SECTION 5.16 Injunctive Relief. The Stockholders and their Permitted
------------------
Transferees acknowledge and agree that a violation of any of the terms of this
Agreement will cause the Stockholders and their Permitted Transferees
irreparable injury for which adequate remedy at law is not available.
Accordingly, it is agreed that each Stockholder and Permitted Transferee shall
be entitled to an injunction, restraining order or other equitable relief to
prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in any court of competent jurisdiction in the
United States or any state thereof, in addition to any other remedy to which
they may be entitled at law or equity.
SECTION 5.17 Other Stockholders' Agreements. The Support, Voting and
--------------------------------
Board Composition Agreement, dated as of March 10, 1999, as amended, by and
among the Company, John Beck, Richard Courtney and Murdock Communications
Corporation has been terminated and is null and void. None of the Stockholders
nor any of their Permitted Transferees shall enter into any stockholder
agreement or arrangement of any kind with any Person with respect to any
Securities which is inconsistent with the provisions of this Agreement or which
may impair its ability to comply with this Agreement.
SECTION 5.18 Successors, Assigns and Transferees. This Agreement shall
-------------------------------------
bind and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns. This Agreement may not be
assigned by any party hereto (except pursuant to Section 2.1, and only if the
assigning party continues to be bound by this Agreement) without the prior
written consent of each of the other parties.
SECTION 5.19 Further Assurances. At any time to time after the date
-------------------
hereof, the parties agree to cooperate with each other, and at the request of
any other party, to execute and delivery any further instruments or documents
and to take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
21
<PAGE>
SECTION 5.20 Initiation and Expiration of Certain Obligations.
-----------------------------------------------------
Notwithstanding any provision herein to the contrary, it shall be a condition
precedent to each of the rights and obligations of the parties to this Agreement
that the First Closing (as defined in the Stock Purchase Agreement) shall have
occurred in accordance with Section 1.2(a) of the Stock Purchase Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
SIGNATURES ON FOLLOWING PAGE
22
<PAGE>
ACTEL INTEGRATED
COMMUNICATIONS, INC.
By:
---------------------------------
Name:
Title:
SERIES E INVESTORS:
SANDLER CAPITAL PARTNERS IV, L.P.
By: SANDLER INVESTMENT PARTNERS, L.P.,
General Partner
By: SANDLER CAPITAL MANAGEMENT,
General Partner
By: MJDM Corp., General Partner
By:
-----------------------
Edward G. Grinacoff
President
SANDLER CAPITAL PARTNERS IV FTE, L.P.
By: SANDLER INVESTMENT PARTNERS, L.P.,
General Partner
By: SANDLER CAPITAL MANAGEMENT,
General Partner
By: MJDM Corp., General Partner
By:
-----------------------
Edward G. Grinacoff
President
23
<PAGE>
--------------------------------------
WAYNE WRIGHT, an individual
SERIES B PREFERRED STOCK:
--------------------------------------
WAYNE WRIGHT, an individual
SERIES D PREFERRED STOCK:
--------------------------------------
WILLIAM L. HALE, an individual
--------------------------------------
ALAN HOLT, an individual
24
<PAGE>
Signature Page to
Actel Integrated Communications, Inc.
Stockholders Agreement
SERIES A PREFERRED STOCKHOLDERS
--------------------------------------
Investor
--------------------------------------
Investor
25
