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EXHIBIT 2.3
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (the "Agreement") is entered into as of
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December 15, 2000, by and between MATTSON TECHNOLOGY, INC., a Delaware
corporation (the "Company"), STEAG ELECTRONIC SYSTEMS AG, an Aktiengesellschaft
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organized and existing under the laws of the Federal Republic of Germany
("Stockholder") and BRAD MATTSON, an individual who is a director and the Chief
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Executive Officer of the Company ("Mattson").
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A. On June 27, 2000, the Company and Stockholder entered into a
Strategic Business Combination Agreement (the "Combination Agreement") pursuant
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to which, subject to satisfaction or waiver of the conditions therein, (i)
Stockholder will sell and transfer 100% of the issued and outstanding capital
stock or other equity ownership interests of certain wholly-owned subsidiaries
of Stockholder to the Company, and (ii) the Company shall issue to Stockholder
11,850,000 shares of restricted common stock, par value $.001 per share ("Common
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Stock"), of the Company (the "STEAG Transaction").
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B. Upon consummation of the STEAG Transaction, Stockholder will own
approximately, 31.9% of all outstanding shares of Common Stock and Mattson will
own 3,535,516 shares of Common Stock (or approximately 9.5% of all outstanding
shares of Common Stock).
C. On June 27, 2000, the Company, CFM Technologies, Inc., a
Pennsylvania corporation ("CFM"), and M2C Acquisition Corporation, a Delaware
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corporation and wholly-owned subsidiary of the Company ("M2C"), entered into an
Agreement and Plan of Merger (the "CFM Merger Agreement") pursuant to which,
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subject to satisfaction or waiver of the conditions therein, and concurrently
with the consummation of the STEAG Transaction, (i) M2C will merge with and into
CFM, resulting in CFM continuing as the surviving corporation and M2C ceasing to
exist as a separate corporation (the "CFM Merger") and (ii) the Company will
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issue approximately 4,100,000 shares of Common Stock to the stockholders of CFM
and will assume outstanding CFM stock options in accordance with the CFM Merger
Agreement.
D. The parties believe that it is in the best interests of the
Company, the Stockholder and Mattson to provide for certain rights and
obligations of the parties with respect to various corporate matters.
NOW THEREFORE, the parties hereto agree as follows:
1. Board Representation; Executive Staffing; Nominating Committee;
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Voting Arrangements.
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1.1 Board Representation; Executive Staffing. Commencing on the
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Effective Date, during the term of this Agreement, the Board of Directors of the
Company shall consist of seven (7) members, two of whom shall be designated by
Stockholder (the "Stockholder Representatives"), one of whom shall be the Chief
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Executive Officer of the Company and, subject to Section 1.1(b) below, the
remaining four of whom shall be incumbent Independent
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Directors (as such term and certain other capitalized terms are defined in
Section 8.11) as of the Effective Date, or successors, at least three of whom
shall be Independent Directors, nominated in accordance with the Company's
Bylaws, as amended from time to time (the "Bylaws").
(a) Effective as of the Effective Date (as defined in
Section 7.1), the Company shall cause the authorized size of the Board of
Directors to be increased to seven (7) members from five (5) members, and the
Company shall cause two (2) persons designated by Stockholder as the initial
Stockholder Representatives to be appointed to fill the two vacant seats so
created. One such initial Stockholder Representative shall be Dr. Jochen
Melchior, who shall be elected and appointed to the class of the Company's Board
of Directors scheduled to be elected at the third (3/rd/) Annual Meeting of the
Company's stockholders following the Closing (i.e., Class III). The other
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initial Stockholder Representative shall be Dr. Hans Betz, who shall be elected
and appointed to the class of the Company's Board of Directors scheduled to be
elected at the second (2nd) Annual Meeting of the Company's stockholders
following the Closing (i.e., Class II). If either Stockholder Representative or
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any successor thereto ceases to be a director of the Company at any time prior
to the expiration of such Stockholder Representative's designated term as
director, whether as a result of death, resignation, retirement,
disqualification, removal from office or other cause, the Company shall cause a
successor designated by Stockholder to be elected and appointed to fill the
vacancy so created. The Company agrees that, at the request of Stockholder, as
soon as practicable following such request, it will cooperate with Stockholder
to attempt to remove any Stockholder Representative, to the extent permitted by
Delaware law, and to take any action reasonably requested by Stockholder for
that purpose including, without limitation, to call a stockholders meeting and
hold such meeting as soon as practicable following such request. Stockholder
Representatives who are not employees of the Company will receive the same
benefits and compensation as other non-employee directors of the Company.
(b) To the extent required pursuant to the CFM Merger
Agreement, effective as of the effective time of the CFM Merger, the Company may
cause one person designated by CFM (the "CFM Representative") to serve on the
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Company's Board of Directors as a member of Class III of the Board of Directors,
in place of an incumbent Independent Director of the Company. If the CFM
Representative ceases to be a director of the Company prior to the expiration of
the CFM Representative's designated term as director, whether as a result of
death, resignation, retirement, disqualification, removal from office or other
cause, the vacancy so created shall be filled by the Company's Board of
Directors, in accordance with the Company's Bylaws, with an Independent Director
or other person unanimously approved by the Nominating Committee (as defined in
Section 1.2).
(c) Effective as of the Effective Date,the Company's Board
of Directors other than the members elected and appointed pursuant to Section
1.1(a) and (b) herein shall be the Chief Executive Officer of the Company and
the other incumbent directors of the Company as of such date.
(d) Effective as of the Effective Date, the Company shall
cause: (i) Dr. Jochen Melchior, a Stockholder Representative, to serve as
Chairman of the Board for a term of one (1) year, and (ii) Mattson to serve as
Vice-Chairman of the Board and as Chief Executive Officer of the Company.
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(e) Effective as of the Effective Date, the Company shall
cause Dr. Ludger Viefhues to be named Chief Financial Officer of the Company for
a term of one year, subject to removal by the Executive Staffing Committee (as
defined below).
(f) Effective as of the Effective Date, the Board of
Directors of the Company will establish an "Executive Staffing Committee," in
accordance with the provisions set forth in the Bylaws with respect to the
formation of committees of the Board of Directors, with members consisting of
Dr. Jochen Melchior and Mattson and, if agreed by the Company and Stockholder,
one additional representative of each of Stockholder and the Company. The
Executive Staffing Committee will remain in place for one year following the
Effective Date, and will be responsible during that period for making key
personnel decisions (including the hiring and firing of the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer and the
general managers for divisions). One (1) Independent Director reasonably
acceptable to Stockholder and the Company will be appointed as a tiebreaker
member of the Executive Staffing Committee in the event the committee reaches
deadlock on an issue or staffing decision.
(g) The Company will cause the nomination of the
Stockholder Representatives for election as directors of the Company at each
Annual Meeting of the Company's stockholders at which the term of an incumbent
Stockholder Representative will expire, until the termination of this Agreement.
1.2 Nominating Committee. Effective as of the Effective Date,
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the Company's Bylaws shall establish a nominating committee (the "Nominating
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Committee") to evaluate and propose nominees to serve as directors to succeed
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the CFM Representative or any Independent Director who leaves office, or to fill
additional vacancies on the Board of Directors not otherwise provided for in
Section 1.1(a) herein. During the term of this Agreement, the Nominating
Committee shall be comprised of three (3) Board members, at least one of whom
shall be a Stockholder Representative. For a period of three (3) years following
the Effective Date, the Nominating Committee shall nominate only those nominees
who have received the unanimous approval of the Nominating Committee members.
The Bylaws will further provide that in the event the Nominating Committee fails
to nominate a nominee within four (4) months after a Board seat becomes vacant,
the Board of Directors may act to elect and appoint a nominee to fill the
vacancy.
1.3 Election of Nominees. Each of Stockholder and Mattson agrees
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to be present and voting and to affirmatively vote for the election of the
nominees for director designated or nominated pursuant to Sections 1.1 and 1.2
herein, including without limitation, the Stockholder Representatives, at each
meeting of the Company's stockholders at which directors are to be elected.
1.4 Interested Party Transactions. In the event any proposed
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transaction between the Company, on the one hand, and Stockholder or any of its
Affiliates, on the other hand, is submitted to the Company's stockholders for
their approval, Stockholder agrees to vote its shares of Voting Stock with
regard to such proposed transaction in the same proportion (for, against or
abstain) as all shares of Voting Stock not owned by Stockholder and represented
and voting at a stockholders' meeting are voted with regard to such proposed
transaction; provided,
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that the foregoing shall not apply to a transaction among the Company and its
stockholders generally or with respect to any transaction provided for in this
Agreement including, without limitation, Stockholder's exercise of its rights
under Section 3 hereto.
1.5 Amendment to Bylaws. Prior to or simultaneous with the
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Closing, the Company shall cause the Bylaws of the Company to be amended and
restated in the form of Exhibit A hereto.
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2. Standstill Restrictions on Further Purchases of Company Stock.
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2.1 Restriction on Acquisition of Voting Stock. Except with
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prior Disinterested Director Approval, except as otherwise provided in Section
2.4 of this Agreement and except for any stock issuances by the Company in
respect of any stock split, stock dividend, recapitalization or similar
corporate transaction, or upon exercise of securities issued pursuant to rights
distributed to holders of Common Stock generally, Stockholder shall not (and
Stockholder shall not permit any of its majority-owned and controlled Affiliates
to) acquire, either directly or indirectly, agree to acquire or make a tender or
exchange offer to acquire any shares of Voting Stock of the Company; provided,
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however, that the foregoing restriction shall not apply to a transfer by
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Stockholder of all or any portion of the Voting Stock held by Stockholder to any
of its Affiliates made in accordance with Section 4.5, or any transfer back to
Stockholder pursuant to such Section 4.5.
2.2 Participation in Solicitations. Except with prior
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Disinterested Director Approval, Stockholder shall not (and Stockholder shall
not permit any of its majority-owned and controlled Affiliates to) (i) "solicit"
or in any way participate, directly or indirectly, in the "solicitation" of
"proxies," as those terms are defined in Rule 14a-1 under the Exchange Act, in
respect of any Voting Stock (provided, that Stockholder shall not be deemed to
have violated the restrictions in this clause (i) by virtue of any action taken
in connection with the election of directors pursuant to Section 1 above), (ii)
make any public announcement in response or with respect to an Acquisition
Proposal not solicited or approved by the Company~s Board of Directors, (iii)
deposit any shares of Voting Stock in a voting trust or subject any Voting Stock
to any arrangement or agreement with respect to the voting of such Voting Stock
with any Person or "group" (as such term is defined under the Exchange Act)
other than the Company or other entities within Stockholder's control group or
(iv) form or join any "group" (as such term is defined under the Exchange Act)
with any other Person other than entities within Stockholder's control group for
the purpose of voting, holding, purchasing or disposing of Voting Stock or for
the purpose of taking any of the actions set forth in this Section 2.2 or
Section 2.1, above.
2.3 Suspension of Standstill Restrictions. The restrictions set
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forth in Sections 2.1 and 2.2 shall be suspended in the event that any Person or
"group" (as such term is defined under the Exchange Act) (other than
Stockholder, any Person who is then an Affiliate of Stockholder, or the
Company), without the prior approval of the Board of Directors of the Company,
(i) commences a tender offer for purposes of Rule 14d-2 promulgated under the
Exchange Act, (ii) acquires shares of Voting Stock resulting in such Person or
group having beneficial ownership of Voting Stock representing more than twenty
percent (20%) of the then-outstanding Voting Stock of the Company or (iii)
acquires shares of Voting Stock resulting in such Person or group having
beneficial ownership of Voting Stock representing more than ten
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percent (10%) of the then-outstanding Voting Stock of the Company and commences
or publicly announces its intention to seek to effect a Change of Control,
whether through an Acquisition Transaction or otherwise. Upon the cessation of
the event or events that lead to suspension of the restrictions in Sections 2.1
and 2.2 pursuant to this Section, those restrictions shall be reinstated in
accordance with their terms unless this Agreement has been terminated in
accordance with Section 7.2; provided however that, notwithstanding any
provision of Section 2.1 or 2.2 to the contrary, Stockholder shall have no
obligation to dispose of any Voting Stock that Stockholder has acquired or
agreed to acquire, or to reverse, rescind, violate or breach (x) any contractual
obligation Stockholder has undertaken, (y) any other commitment Stockholder has
made, the reversal, rescission, violation or breach of which would have adverse
consequences to Stockholder, or (z) any legal or regulatory requirement imposed
on Stockholder, in each case during any suspension of Sections 2.1 and 2.2
pursuant to this Section.
2.4 Right to Maintain Ownership. Notwithstanding the provisions
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of Section 2.1 to the extent that Stockholder's percentage beneficial ownership
is reduced as a result of any issuance of Voting Stock by the Company (an
"Issuance") for any reason whatsoever, Stockholder may purchase additional
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shares of Voting Stock in the open market or in privately negotiated
transactions (to the extent Stockholder has not already exercised its rights
pursuant to Section 3 below with respect to a particular Issuance) as required
to maintain Stockholder~s aggregate percentage beneficial ownership of the
Company's outstanding Voting Stock on the Effective Date.
2.5 Notice of Stockholder Position. Upon written request from
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the Company, but not more than once each calendar quarter, a duly authorized
officer of Stockholder will certify to the Company in writing the numbers and
classes of shares of Voting Stock beneficially owned by Stockholder and its
majority-owned and controlled Affiliates as of any record date or other date
reasonably requested.
2.6 Notice of Issuances by the Company. The Company shall, as
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promptly as practicable, but not later than the date of Issuance, provide
written notice to Stockholder of all Issuances of Voting Stock by the Company,
other than issuances described under Section 3.4 (d) or (e), specifying the
number of shares of Voting Stock being issued and the purchase price therefor;
provided, that with respect to the foregoing Issuances of Voting Stock by the
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Company in amounts less than 1% of the shares of Voting Stock outstanding on
such date, the Company may provide notice to Stockholder of such Issuances on a
quarterly basis. Within fifteen days following the end of each fiscal quarter,
the Company shall provide written notice to Stockholder of all Issuances of
Voting Stock described under Section 3.4, (d), and (e), specifying the number of
shares of Voting Stock so issued during the fiscal quarter.
2.7 Company Repurchases. Stockholder shall not be deemed to have
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violated its obligations under Section 2.1 by virtue of any increase in the
aggregate percentage of outstanding Voting Stock of the Company beneficially
owned by Stockholder and its Affiliates solely as a result of a recapitalization
of the Company, a repurchase of securities by the Company or other actions taken
by the Company or any of the Company's Affiliates that have the effect of
reducing the number of shares of Voting Stock outstanding.
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2.8 Termination. Notwithstanding any other provision in this
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Agreement, all rights and obligations of any party under this Section 2 shall
terminate upon the earlier of (x) the fifth (5/th/) anniversary of the Closing
regardless of whether such rights and obligations are suspended for any portion
of such five-year period or (y) the termination of this Agreement pursuant to
Section 7 hereof.
3. Stockholder Right to Purchase Additional Company Stock.
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3.1 Right of Offer to Purchase Additional Shares of Common
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Stock. Prior to any sale or issuance by the Company of any shares of Voting
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Stock (other than a sale or issuance described in Section 3.4) (a "Proposed
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Issuance"), the Company shall give Stockholder advanced written notice (the
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"Notice of Issuance") of the Proposed Issuance, setting forth the proposed
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price, quantity (which the Company may indicate is a fixed amount to be offered
to third parties, subject to increase to make allowance for issuance to
Stockholder) and other material terms and conditions under which the Company
proposes to make such sale (the date such notice is received by Stockholder is
hereinafter referred to in this Section 3.1 as the "Notice Date"). Stockholder
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shall have the right, exercisable as hereinafter provided, to purchase its
proportional share of such Voting Stock (as defined below) on terms which are at
least as favorable to Stockholder as the terms on which the Company sells such
Voting Stock to any other prospective investor. Stockholder shall have twenty
(20) days after the Notice Date to notify the Company in writing that it elects
to purchase some or all of its share of the Voting Stock so offered. If any
material term of the Proposed Issuance is changed from those set forth in the
Notice of Issuance, the Company shall give Stockholder prompt written notice
(the "Revised Notice of Issuance") of the revised terms of the Proposed Issuance
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setting forth the revised terms of the Proposed Issuance (the date such Revised
Notice of Issuance is received by Stockholder is hereinafter referred to in this
Section 3 as the "Revised Notice Date"). Stockholder shall have until the later
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of (x) five (5) days from the Revised Notice Date or (y) twenty (20) days from
the original Notice Date to notify the Company in writing that it elects to
purchase some or all of its share of the Voting Stock so offered. The
proportional share amount of Voting Stock which Stockholder is entitled to
acquire in the Proposed Issuance shall be equal to (i) the amount of Voting
Stock proposed to be sold or issued by the Company in the Proposed Issuance
(which the Company at its election may indicate to be a fixed amount to be
offered to third parties, subject to increase to make allowance for sales to
Stockholder) multiplied by (ii) a fraction calculated by dividing (A) the number
of shares of Voting Stock owned by Stockholder as of the Notice Date by (B) the
total number of shares of Voting Stock issued and outstanding as of the Notice
Date.
3.2 Company Sale. If, within the later of twenty (20) days after
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the Notice Date or five (5) days after the latest Revised Notice Date,
Stockholder does not notify the Company that it desires to purchase a portion of
the Voting Stock proposed to be sold or issued by the Company in a Proposed
Issuance, then the Company may, during a period of ninety (90) days following
the end of such twenty (20) day period or five (5) day period, as the case may
be, sell and issue such Voting Stock not otherwise purchased by Stockholder to
other third parties at a price and upon terms and conditions no more favorable
to such parties than those set forth in the Notice of Issuance.
3.3 Purchase; Payment. If Stockholder elects to purchase Voting
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Stock from the Company pursuant to this Section 3, Stockholder and the Company
shall consummate the
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purchase and sale of such Voting Stock in the manner and on the terms and date
of the closing of the Proposed Issuance as set forth in the Notice of Issuance
or Revised Notice of Issuance, as the case may be or, if on a later date, the
second (2nd) business day after all regulatory filings required for the
consummation of such purchase have been obtained. Payment for such Voting Stock
shall be by check (or wire transfer of immediately available funds to an account
designated by the Company by written notice delivered to Stockholder not less
than two (2) business days prior to the scheduled closing of such purchase) or,
at Stockholder's election, to the extent practicable, such other form of
consideration as set forth in the Notice of Issuance or Revised Notice of
Issuance, as the case may be, against delivery of such Voting Stock at the
executive offices of the Company at the time of the scheduled closing therefor.
The Company shall take all such action as may reasonably be required by any
regulatory authority in connection with the exercise by Stockholder of the right
to purchase Voting Stock as set forth in this Section 3.
3.4 Limitation. Stockholder's right to participate in a Proposed
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Issuance pursuant to this Section 3 shall not apply to the following sales and
issuances of shares of Voting Stock by the Company on or after the date hereof:
(a) Voting Stock issued to employees, officers, directors
and consultants pursuant to any stock option plan, stock incentive or purchase
plan or agreement approved by the Board of Directors of the Company;
(b) Voting Stock issued pursuant to or upon exercise or
conversion of securities issued in connection with a merger, consolidation,
share exchange, or other reorganization or business combination involving the
Company, in which the Company is the acquiring corporation or stockholders of
the Company immediately prior to such merger, consolidation or other
reorganization or business combination own securities with a majority of the
voting power of the resulting entity;
(c) Common Stock, in an amount up to 1.0% of the
Company's outstanding Common Stock as of the date hereof, in the case of any
single transaction, or 2.5% of the Company's outstanding Common Stock as of the
date hereof, in the aggregate, issued pursuant to or upon exercise or conversion
of securities issued in connection with (A) any equipment financing in an amount
in excess of $10,000,000 or (B) any technology licensings, research or
development agreements or asset acquisitions approved by the Company's Board of
Directors;
(d) Common Stock issued upon exercise of securities
issued pursuant to rights distributed to holders of Common Stock generally;
(e) Common Stock issued proportionately to all
Stockholders in connection with any stock split, stock dividend or
recapitalization of the Company; or
(f) Common Stock issued pursuant to the exercise of any
stock options or warrants or any other rights to acquire shares of Common Stock
outstanding on the Effective Date.
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3.5 Termination. The right contained in this Section 3 shall
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terminate upon the earliest to occur of (i) the closing of any Acquisition
Transaction that results in a Change of Control, (ii) the sale of all or
substantially all of the Company's assets, or (iii) termination of this
Agreement pursuant to Section 7 hereof.
4. Restrictions on Transfer of Voting Stock by Stockholder.
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4.1 Lockup Period. For a period of one (1) year commencing upon
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the Effective Date ("Lockup Period"), except with prior Disinterested Director
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Approval, Stockholder shall not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any Voting Stock or enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Voting Stock, whether any such transaction
described in this section is to be settled by delivery of Voting Stock, in cash
or otherwise; provided, however, that Stockholder shall be permitted to transfer
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all or any portion of the Voting Stock to an Affiliate of Stockholder in
accordance with Section 4.5.
4.2 Permitted Transfers. Following the Lockup Period,
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Stockholder shall not, without first complying with its obligations under
Section 4.4 herein, sell or transfer, directly or indirectly, any shares of
Voting Stock, except (i) pursuant to a bona fide public offering of Voting Stock
registered under the Securities Act (which shall be structured and conducted
through an underwriter or otherwise in a manner reasonably calculated not to
result in the transfer of beneficial ownership of five percent (5%) or more of
the total Voting Stock of the Company then outstanding to a single Person or
group (other than a qualified institutional buyer, as defined in Rule
144A(a)(1), who is purchasing the securities for investment purposes)); (ii)
pursuant to and in compliance with Rule 144 (but not pursuant to Rule 144A)
under the Securities Act; or (iii) to an Affiliate of Stockholder in accordance
with Section 4.5.
4.3 Transfers Subject to Company Approval. Following the Lockup
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Period, except with Disinterested Director Approval, Stockholder shall not sell
or transfer, directly or indirectly, more than 2,400,000 shares (as adjusted as
a result of stock dividends, stock splits, recapitalizations and the like after
the date of this Agreement) of Voting Stock in a transaction or series of
related transactions to a single Person or "group" (as such term is defined
under the Exchange Act), except (i) as provided in Section 4.2(i) through (iii);
(ii) pursuant to an Acquisition Transaction that will result in a Change of
Control and that has received Disinterested Director Approval or that has
received approval by a majority of the stockholders of the Company excluding
Stockholder; (iii) following the third (3/rd/) anniversary of the Effective
Date; or (iv) during the suspension or following termination of the Voting Stock
acquisition restrictions pursuant to Section 2.3(ii), in response to any tender
or exchange offer made by another Person or group to purchase or exchange for
cash or other consideration all outstanding Voting Stock of the Company.
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4.4 Right of First Refusal on Permitted Sales by Stockholder.
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(a) General. Prior to consummating any sale or transfer of
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any Voting Stock, except for sales or transfers described in Section 4.2(i)
through (iii), Stockholder shall give the Company the opportunity to purchase
such Voting Stock in the following manner:
(i) Stockholder shall give notice (the "Transfer
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Notice") to the Company in writing of such intention, specifying the names of
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the proposed purchasers or transferees, the securities proposed to be sold or
transferred, the proposed price per share therefor (the "Transfer Price") and
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the other material terms upon which such disposition is proposed to be made.
(ii) The Company shall have the right, exercisable by
written notice given by the Company to Stockholder within twenty (20) days after
receipt of such Transfer Notice, to agree to purchase all, but not less than
all, of the securities specified in such Transfer Notice. The Company shall have
the right to pay for such securities: (a) the same amount in cash per share, if
the consideration to be paid by the third party consists of cash, or (b) to the
extent the consideration to be paid by the third party does not consist of cash,
consideration per share equivalent to that offered by the third party, or an
amount of cash having equivalent value as determined, at the expense of the
Company, by an investment banking firm mutually agreed to by the Company and
Stockholder.
(iii) If the Company exercises its right of first
refusal hereunder, the closing of the purchase of the securities with respect to
which such right has been exercised shall take place within ten (10) days after
the Company gives notice of such exercise, or, if later, upon the date on which
the proposed transfer was to occur with the third party. Upon exercise by the
Company of its right of first refusal, the Company and Stockholder shall be
legally obligated to consummate the purchase contemplated thereby and shall use
their reasonable commercial efforts to secure any approvals required in
connection therewith. The Company may elect by notice in writing to Stockholder
that, at the closing of such transaction, the shares be delivered to and payment
made to Stockholder by a designee of the Company, provided that the Company
shall remain liable for its obligations under this Section 4.4.
(iv) If the Company does not exercise its right of
first refusal hereunder within the time specified for such exercise, Stockholder
shall be free, subject to the terms of Section 4.3 herein, during the period of
one hundred and eighty (180) days following the expiration of such time for
exercise, to sell the securities specified in such Transfer Notice on terms no
less favorable to Stockholder than the terms specified in such Transfer Notice.
(b) No Assignment. The rights of first refusal provided by
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this Section 4.4 may not be assigned by the Company; provided, however, that the
Company may provide that a purchase of Voting Stock will be made by a designee
in accordance with Section 4.4(a)(iii).
4.5 Affiliate Transfer; Obligation to Transfer Back. As a
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condition to the permitted transfer of Voting Stock held by Stockholder to any
Affiliate of Stockholder (each, an 'Affiliate Holder'), such Affiliate Holder
must agree to be bound by the terms and conditions of
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this Agreement and to hold such Voting Stock subject to all obligations and
restrictions applicable to Stockholder, including Sections 1.3, 2, 4 and 5.11
hereof, in which event such Affiliate shall be entitled to share, jointly with
Stockholder, the rights and benefits applicable to Stockholder under this
Agreement. If any Affiliate Holder ceases to be an Affiliate of Stockholder,
then not later than thirty (30) days following the date on which the control
relationship ends between such Affiliate Holder and Stockholder, such Affiliate
Holder shall transfer its Voting Stock to Stockholder or to an Affiliate of
Stockholder, or otherwise transfer such Voting Stock in accordance with Section
4 of this Agreement.
4.6 Merger of Stockholder. For avoidance of doubt, nothing in
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this Section 4 shall be deemed to prohibit a transfer of Voting Stock by
operation of law to a successor entity as a result of a merger involving
Stockholder.
5. Registration Rights.
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5.1 Definitions. For purposes of this Section 5:
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(a) The terms "Holder" or "Holders" means Stockholder
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and/or any other person who shall subsequently own or have the right to acquire
Registrable Securities or any assignee thereof in accordance with Section 5.10
hereof.
(b) The terms "register," "registered" and "registration"
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refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(c) The term "Registrable Securities" means (i) any shares
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of Common Stock issued by the Company to Stockholder pursuant to the Combination
Agreement or subsequently acquired by Stockholder in compliance with Section 3
of this Agreement; (ii) any and all shares of Common Stock issued or issuable
upon exercise, conversion or exchange of equity securities acquired by
Stockholder in compliance with Section 3; (iii) equity securities issued in lieu
thereof in any reorganization; or (iv) equity securities issued in respect of
the stock referred to in (i) or (ii), above, as a result of a stock split, stock
dividend, recapitalization or the like, excluding in all cases, however, any of
the foregoing sold by a Holder pursuant to a registration statement, in a
transaction pursuant to Rule 144 promulgated under the Securities Act, or in any
other transaction in which registration rights are not transferred pursuant to
this Section 5.
(d) The number of shares of "Registrable Securities then
---------------------------
outstanding" shall be determined by the number of shares of Common Stock
-----------
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are exercisable or
convertible into, Registrable Securities.
5.2 Company Registration
--------------------
(a) If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other
10
<PAGE>
than the Holders) any of its Common Stock under the Securities Act for sale
after the Lockup Period in connection with a secondary offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock option, stock purchase or
similar plan, or a registration relating solely to a transaction of the type
described in Rule 145(a) under the Securities Act), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of any Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 8.3 of this Agreement, the
Company shall, subject to the provisions of Section 5.2(b), include in such
registration (and any related qualification under blue sky laws or other
compliance) and in any underwriting involved therein, all of the Registrable
Securities that each such Holder has requested to be registered.
(b) In connection with any offering involving an
underwriting of shares being issued by the Company, the Company shall not be
required under this Section 5.2 to include any Holder's securities in such
underwriting unless such Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, and then only in
such quantity as will not, in the opinion of the underwriters, jeopardize the
success of the offering by the Company. In the event that any registration
pursuant to this Section 5.2 shall be, in whole or in part, an underwritten
public offering of Registrable Securities, the number of shares of Registrable
Securities of the Holders to be included in such an underwriting may be reduced
(pro rata among the requesting Holders based upon the number of shares of
Registrable Securities then outstanding that are owned by such Holders) if and
to the extent that the managing underwriter advises the Company in writing that
in its opinion such inclusion would materially adversely affect the marketing of
the securities to be sold by the Company therein. If any Holder disapproves of
the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter delivered at least seven (7)
days prior to the effective date of the Registration Statement. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. The Holders shall have no right to
participate in the selection of the underwriters for an offering pursuant to
this Section 5.2.
(c) The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 5.2 prior to the
effectiveness of such registration whether or not any Holder has elected to
include securities in such registration.
5.3 Form S-3 Demand Registration.
----------------------------
(a) After the Lockup Period, Holders shall have the right
to request registrations on Form S-3 (such requests shall be in writing and
shall state the number of shares of Registrable Securities to be disposed of and
the intended methods of disposition of such shares by the Holders); provided,
--------
however, that the Company shall not be obligated to effect any such
-------
registration: (i) with effectiveness prior to the end of the Lockup Period, (ii)
if the Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) on Form S-3 at an aggregate price
to the public of less than $5,000,000, (iii) if the Company reasonably
determines, following consultation with its outside counsel, that a Holder's
sale of Registrable Securities pursuant to the registration statement would
require disclosure of material information
11
<PAGE>
and such disclosure would be materially detrimental to the Company, but only for
so long as such disclosure is required and would be materially detrimental; (iv)
in a given twelve-month period, after the Company has effected one (1) such
registration pursuant to this Section 5.3 in any such period; or (v) within
sixty (60) days of the effective date of a Company registration statement of the
type described in Section 5.2 involving an underwritten offering, or within one
hundred twenty (120) days of the effective date of a registration statement in
which the Holders shall have been entitled to participate pursuant to Section
5.2 hereto and in which there shall have been effectively registered all of the
Registrable Securities as to which registration shall have been requested by the
Holders, if any; provided; however, that the Company may not postpone any
-------- -------
registration pursuant to clause (iii) above for more than 60 days from the date
of such request; and, provided, further that such right to delay a request shall
-------- -------
be exercised by the Company not more than once in any twelve-month period.
(b) Following receipt of any notice from Holders initiating
a request for registration in accordance with Section 5.3(a), the Company shall
use its best efforts to register under the Act, for public sale in accordance
with the method of disposition specified in such notice from Holders, the number
of shares of Registrable Securities specified in such notice and in all notices
received by the Company. If such method of disposition shall be an underwritten
public offering, the Holders may designate the managing underwriter of such
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed. If and to the extent the managing underwriter
of any underwritten public offering conducted pursuant to this Section 5.3
advises the Company in writing that in its opinion the amount of securities
requested to be included in such offering is sufficiently large to materially
adversely affect the marketing of the securities to be sold by the stockholders
therein, the amount of securities to be included in such offering by Persons
other than the Holders shall be reduced.
(c) Subject to the provisions of Section 5.3(b) above, the
Company shall be entitled to include in any registration statement referred to
in this Section 5.3, for sale in accordance with the method of disposition
specified by the requesting Holders, shares of Common Stock to be sold by the
Company for its own account, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of the
Registrable Securities to be sold. Except for registration statements on Form S-
4, Form S-8 or any successor forms thereto, the Company will not file with the
Commission any other registration statement under the Act with respect to its
Common Stock, whether for its own account or that of other stockholders, from
the date of receipt of a notice from requesting Holders pursuant to this Section
5.3 until the completion of the period of distribution of the registration
contemplated thereby.
5.4 Obligations of the Company. Whenever required under this
--------------------------
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities within 45 days after
receipt of requisite requests from Holders for registration and use its best
efforts to cause such registration statement to become
12
<PAGE>
effective and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for
the period of the distribution contemplated thereby (determined as hereinafter
provided);
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to keep the
registration statement effective for the period specified in paragraph (a) above
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement;
(c) furnish to the Holders of Registrable Securities
covered by such registration statement such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act and such other documents as they may reasonably request in order
to facilitate the disposition of such Registrable Securities;
(d) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be requested by the Holders
thereof, provided that (i) the Company shall not be required in connection
--------
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions and
(ii) notwithstanding anything in this Agreement to the contrary, in the event
any jurisdiction in which the securities shall be qualified imposes a non-
waivable requirement that expenses incurred in connection with the qualification
of the securities be borne by selling stockholders, such expenses shall be
payable pro rata by selling stockholders;
(e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;
(f) promptly notify each Holder participating in the
registration covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing and at the request of any Holder, within 5 days,
prepare and furnish to such Holder so requesting a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading; provided that, if the Company reasonably determines, following
consultation with its outside counsel, that such a supplement or amendment would
require disclosure of material information and such disclosure would be
materially detrimental to the Company, then upon written notice to participating
Holders to that effect, each Holder shall suspend any sales or trades of the
Company's securities under any
13
<PAGE>
registration statement for so long as the Company determines such disclosure is
required and materially detrimental, but in any case not longer than thirty (30)
days immediately following such notice;
(g) cause all such Registrable Securities registered
pursuant to this Agreement to be listed on each securities exchange or national
market system on which similar securities issued by the Company are then listed
or traded;
(h) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, (i) such
representations and warranties to such Holder and the underwriters, if any, as
is customary in primary underwritten offerings, (ii) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, and (iii) a
letter dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters;
(i) make available upon reasonable notice for inspection by
each seller of Registrable Securities, any underwriter participating in any
distribution pursuant to such registration statement, and any attorney,
accountant or other agent retained by such seller of Registrable Securities or
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with
preparation and verification of such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen (18) months,
beginning with the first month after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and
(k) take such other actions as are reasonably required in
order to expedite or facilitate the sale of such Registrable Securities,
including, without limitation, causing management of the Company to participate
in "road show" presentations.
For purposes of Sections 5.4(a) and 5.4(b), the period of
distribution of Registrable Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Common Stock in any other registration shall be deemed to extend until the
earlier of the sale of all Common Stock covered thereby or 120 days after the
effective date thereof.
5.5 Provision of Information. It shall be a condition precedent
------------------------
to the obligations of the Company to take any action pursuant to this Section 5
that the selling Holders
14
<PAGE>
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of the
Registrable Securities.
5.6 Expenses of Registration. All expenses other than
------------------------
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications of Registrable Securities pursuant to
Sections 5.2 and 5.3, including (without limitation) all registration, filing
and qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel for the participating Holders, shall be borne by the Company.
5.7 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder of such Registrable Securities, the
officers and directors of each such Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
---------
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the 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 (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law; and the Company will reimburse each such Holder, officer
or director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
indemnity agreement contained in this Section 5.7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by any such Holder, officer, director,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities in such
registration statement or any of its directors or officers or any person who
controls such Holder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter, or other such Holder
15
<PAGE>
or director, officer, controlling person or underwriter may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter, or other such Holder or
director, officer, controlling person or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 5.7(b)
-------- -------
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder from whom indemnification is sought (which consent shall not be
unreasonably withheld or delayed); provided, that, in no event shall any
--------
indemnity under this Section 5.7(b) exceed the gross proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 5.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 5.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
-------- -------
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, shall only relieve such indemnifying party of
any liability to the indemnified party under this Section 5.7 if and to the
extent the indemnifying party is materially prejudiced by such omission, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 5.7. No indemnifying party, in the defense of any such claim
or litigation against an indemnified party, shall 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 of such claim or litigation, unless
such indemnified party shall otherwise consent in writing.
(d) In order to provide for just and equitable
contributions in any case in which either (i) any Holder exercising registration
rights under Sections 5.2 or 5.3 of this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this Section 5.7
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and following the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case, notwithstanding the fact that this Section 5.7 provides
for indemnification in such case, or
16
<PAGE>
(ii) contribution under the Act may be required on the part of any such Holder
or any such controlling person in circumstances for which indemnification is
provided under this Section 5.7; then, and in each such case, the Company and
such Holder shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion as is appropriate to reflect both the relative benefit received
by such Holder and the relative fault of the Company and such Holder; provided,
--------
however, that, in any such case, (A) no such Holder will be required to
-------
contribute any amount in excess of the net proceeds received by such selling
Holder from the sale of Registrable Securities covered by such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation. For purposes of the preceding sentence, the relative benefit
received by such Holder shall be deemed to be in the same proportion as the
public offering price of its Registrable Securities offered by the registration
statement bears to the public offering price of all securities offered by such
registration statement; and the relative fault of the Company and such Holder
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission of a material fact
relates to information supplied by the Company or by such Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The obligations of the Company and Holders under this
Section 5.7 shall survive the completion of any offering of Registrable
Securities in a registration statement filed pursuant to this Agreement, the
termination of this Agreement pursuant to Section 7 hereof and otherwise.
5.8 Reports Under the Exchange Act. With a view to making
------------------------------
available to the Holders the benefits of Rule 144 under the Securities Act and
any other rule or regulation of the Commission that may at any time permit a
Holder to sell securities of the Company to the public without registration, the
Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times;
(b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
5.9 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Agreement may be
assigned by a Holder; provided, that within a reasonable time after such
--------
transfer, the Company is furnished with written
17
<PAGE>
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; and provided,
--------
further, that such assignment shall be effective only if immediately following
-------
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. Any assignee or transferee
asserting rights under this Agreement shall be deemed to have consented to the
terms and conditions hereof. Notwithstanding the foregoing, Holders' rights to
cause the Company to register their Registrable Securities and to keep
information available, granted to them by the Company under this Section 5, may
be assigned (or assigned in part and retained in part) to one or more
transferees or assignees who either (x) are Affiliates of Stockholder or (y)
receive Registrable Securities which, upon full exercise and conversion,
represent the right to obtain at least five hundred thousand (500,000) shares of
Registrable Securities (as adjusted for stock dividends, stock split,
recapitalizations and the like that occur after the date of this Agreement),
provided, that (i) the Company is given written notice by such Holder at the
--------
time of or within a reasonable time after said transfer or assignment, stating
the name and address of said transferee or assignee and identifying the
securities with respect to which such rights are being assigned, and (ii) upon
request by the Company, such permitted transferee or assignee executes a
counterpart to Section 5 of this Agreement.
5.10 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
---------------------------
shall not, to the extent requested by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell, make short sale of, loan,
grant any option for the purchase of or otherwise transfer or dispose (other
than to donees who agree to be similarly bound) of any Registrable Securities
for a period of time, as agreed to by the Company and the underwriter not to
exceed ninety (90) days, following the effective date of a registration
statement of the Company filed under the Securities Act for an offering in which
the Holder participates; provided, however, that all officers and directors of
-------- -------
the Company and all other persons with registration rights (whether or not
pursuant to this Agreement) except passive, outside investors enter into similar
agreements.
5.11 Termination of Registration Rights. The Company's obligations
----------------------------------
pursuant to this Section 5 shall terminate as to any Holder of Registrable
Securities when the Holder can sell all of such Holder's Registrable Securities
pursuant to Rule 144(k) under the Securities Act and shall be suspended, but not
terminated, during any three-month period in which such Holder is entitled to
sell all shares issued or issuable to such Holder under Rule 144. This Section 5
shall expressly survive termination of this Agreement pursuant to Section 7
hereto.
5.12 No Inconsistent Agreements. The Company shall not, on or after
--------------------------
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Stockholder and
other Holders in this Section 5 or otherwise conflicts with the provisions of
this Section 5. The Company represents and warrants to Stockholder that the
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with any registration rights granted to any holders of the
Company's securities.
5.13 Limitations on Subsequent Registration Rights. From and after the
---------------------------------------------
date of this Agreement, the Company shall not, without the prior written consent
of Stockholder, enter into any agreement with any holder or prospective holder
of any securities of the Company
18
<PAGE>
giving such holder or prospective holder any registration rights, other than
registration rights which are no more favorable (in terms of rights and
limitations) than those granted to Stockholder hereunder and under which the
rights of such third party holder or prospective holder to include securities in
such registration are subordinate to the right of Holders to include Registrable
Securities therein; provided however that the Company may grant registration
rights which are equivalent in priority to the registration rights granted
hereunder to recipients of Voting Stock issued by the Company in connection with
a transaction of the type described in Rule 145(a) under the Securities Act or a
share exchange in which the Company is the acquiring corporation.
6. Notice of Voting Stock Transfers by Mattson.
-------------------------------------------
6.1 General. Except as otherwise provided in Section 6.2, ten (10)
-------
business days prior to any sale or transfer of, or entering into any agreement
to sell or transfer, Voting Stock by Mattson (other than a sale or transfer that
would satisfy section 4.2(i) or (ii) if such sale or transfer were made by
Stockholder), Mattson shall provide Stockholder written notice stating: (i) the
number of shares of Voting Stock to be sold or transferred; (ii) the name,
address and relationship to Mattson, if any, of the purchaser or transferee; and
(iii) the cash price or other consideration per share for which the Voting Stock
is to be sold or transferred.
6.2 Exceptions. Section 6.1 shall not apply to any of the following
----------
sales or transfers of Voting Stock by Mattson:
(a) any transfer to Mattson's spouse, lineal descendant or
antecedent, father, mother, brother or sister, the adopted child or adopted
grandchild of Mattson, or the spouse of any child, adopted child, grandchild or
adopted grandchild of Mattson, or to a trust or trusts for the exclusive benefit
of Mattson or his family members as described in this Section 6.2(a), transfers
from Mattson by devise or descent, or transfers by way of any pledge by Mattson;
(b) any transfer pursuant to a bona fide loan transaction that
creates a mere security interest; or
(c) sales or transfers not exceeding 100,000 shares in any
single transaction or series of related transactions, or 200,000 shares in the
aggregate in any twelve (12) month period.
7. Effectiveness; Termination.
--------------------------
7.1 Effectiveness. This Agreement shall become effective upon the
-------------
Closing of the STEAG Transaction as contemplated by the Combination Agreement
(the "Effective Date") and prior thereto shall be of no force or effect. If the
Combination Agreement shall be terminated in accordance with its terms, this
Agreement shall automatically be deemed to have been terminated and shall
thereafter be of no force or effect.
7.2 Termination. Except with respect to the rights and obligations
-----------
set forth in Section 5 which by their terms expressly survive until terminated
pursuant to Section 5.11 and
19
<PAGE>
the general provision set forth in Section 8, all rights, remedies, obligations
and liabilities of the parties under this Agreement shall terminate upon the
earliest to occur of:
(a) Stockholder's beneficial ownership of Voting Stock
constituting less than twenty percent (20%) of the then-outstanding Voting
Stock;
(b) Stockholder's beneficial ownership of fifty percent (50%) or
more of the then-outstanding Voting Stock other than as a result of
Stockholder's violation of Section 2 of this Agreement; or
(c) a material breach by the Company of any of its material
obligations under this Agreement. Notwithstanding the foregoing, a good faith
disagreement with respect to the Company's indemnification obligations under
Section 5.7, or the failure by the Company to timely satisfy a notice or filing
obligation under Sections 2.6, 3.1, 5.3, 5.4(a) or 5.8, if such notice or filing
is ultimately made by the Company not more than thirty (30) days after the date
prescribed therefor, shall not result in termination of the parties' rights,
remedies, obligations and liabilities under this Section 7.2(c); provided, that
nothing contained in this Section 7.2(c) shall limit any rights Stockholder may
have to damages or other remedies, whether at law or in equity, as a result of
any of the breaches described in this Section 7.2(c).
8. Miscellaneous.
-------------
8.1 Other Agreements Superseded. This Agreement supersedes all prior
---------------------------
agreements or understandings written or oral between the parties hereto,
relating to the subject matter hereof, and incorporates the entire understanding
of the parties with respect thereto.
8.2 Amendment or Modification; Waiver. This Agreement may be amended
---------------------------------
or supplemented only by a written instrument signed by the party against whom
the amendment or supplement is sought to be enforced. The party benefited by any
condition or obligation may waive the same, but such waiver shall not be
enforceable by another party unless made by written instrument signed by the
waiving party. Any waiver by any party of a breach of any provision of this
Agreement on one occasion shall not operate as or be construed to be a waiver of
any breach of any other provision of this Agreement. The failure of a party to
insist upon strict compliance with any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict compliance with that term or any other term of
this Agreement.
8.3 Notices. Any notice or other communication under or relating to
-------
this Agreement shall be given in writing and shall be deemed sufficiently given
and served for all purposes when personally delivered or given by telecopy with
receipt verified by printout of the transmitting machine (or otherwise confirmed
in writing, in which case the notice shall be deemed given when such written
confirmation is received):
20
<PAGE>
(a) If to the Company:
Mattson Technology, Inc.
3550 West Warren Avenue
Fremont, California 94538
Attn: Chief Executive Officer
Fax: 510-492-7052
Attn: Chief Operating Officer
Fax: 510-492-7052
with a copy to:
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Bradley J. Rock, Esq.
Fax: 650-327-3699
(b) If to Stockholder:
STEAG Electronic Systems AG
Ruettenscheider Strasse 1-3
45128 Essen
Germany
Attn: Chief Executive Officer
Fax: 011-49-201-801-6630
Attn: General Counsel
Fax: 011-49-201-801-6684
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, CA 94301
Attn: Marc R. Packer
Fax: (650) 470-4570
Tel: (650) 470-4500
21
<PAGE>
(c) If to Brad Mattson:
Mr. Brad Mattson
c/o Mattson Technology, Inc.
Mattson Technology, Inc.
3550 West Warren Avenue
Fremont, California 94538
Fax: 510-492-7052
8.4 Law Governing; Consent to Jurisdiction; Equitable Relief;
---------------------------------------------------------
Attorneys' Fees.
---------------
(a) This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of laws thereof.
(b) Each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event of any dispute arising out of
or relating to this Agreement or any of the transactions contemplated by this
Agreement, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
including, without limitation, a motion to dismiss on the grounds of forum non
conveniens, (iii) agrees that it will not bring any action arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a federal court sitting in the State of
Delaware or a Delaware state court, and (iv) waives any right to a trial by jury
with respect to any claim, counterclaim, or action arising out of or in
connection with this Agreement or the transactions contemplated hereby.
(c) If any provisions of this Agreement is breached, the
nonbreaching party shall be entitled without limiting any other remedy available
at law or equity, to an injunction, specific performance or other forms of
equitable relief. The nonbreaching party shall be entitled to recover the costs
(including attorneys' fees) of enforcing its rights and the breaching party's
obligations pursuant to this Agreement.
8.5 Successors; Assignability. This Agreement shall be binding
-------------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any right, remedy,
obligation or liability hereunder may be assigned by any of the parties hereto
without the prior written consent of the other parties hereto.
8.6 Counterparts. This Agreement may be executed in any number
------------
of counterparts, and each such executed counterpart shall be deemed to be an
original instrument, but all such executed counterparts together shall
constitute one and the same instrument.
8.7 Parties in Interest. Nothing in this Agreement, express or
-------------------
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any Person other than the parties hereto and their respective
permitted successors and assigns, nor is
22
<PAGE>
anything in this Agreement intended to relieve or discharge any obligation of
any third Person to any party hereto or give any third Person any right of
subrogation or action over or against any party hereto.
8.8 Headings. The headings used in this Agreement are provided
--------
for convenience only and this Agreement shall be interpreted as though they did
not appear herein.
8.9 Transactional Expenses. Except as otherwise specifically
----------------------
provided herein, each party shall pay its own fees and expenses incident to the
negotiation, preparation, execution, delivery and performance of this Agreement
including, without limitation, the fees and expenses of its counsel, accountants
and other advisors.
8.10 Severability. Should any provisions of this Agreement be
------------
held by a court of law to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement shall
not be affected or impaired thereby.
8.11 Certain Definitions. As used in this Agreement, the
-------------------
following terms have the respective meanings set forth below:
(a) Acquisition Proposal means any offer, proposal, inquiry
--------------------
or indication of interest contemplating or otherwise relating to any Acquisition
Transaction.
(b) Acquisition Transaction means any transaction or series
-----------------------
of transactions involving:
(i) any merger, consolidation, reorganization, share
exchange, business combination, issuance of securities, recapitalization,
acquisition of securities, tender offer, exchange offer or other similar
transaction (i) in which the Company or any of its Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the Commission) is a constituent
corporation, (ii) in which a Person or "group" (as defined in the Exchange Act)
of Persons directly or indirectly acquires beneficial or record ownership of
securities representing more than 20% of the outstanding securities of any class
of voting securities of the Company or any of its Significant Subsidiaries or
(iii) in which the Company or any of its Significant Subsidiaries issues
securities representing more than 20% of the outstanding securities of any class
of voting securities of the Company or any of its Significant Subsidiaries;
(ii) any sale, lease, exchange, transfer, exclusive
license, acquisition or disposition of any business or businesses or assets that
constitute or account for 20% or more of the consolidated net revenues, net
income or assets of the Company or any of its Significant Subsidiaries; or
(iii) any liquidation or dissolution of any of the
Company or any of its Significant Subsidiaries.
(c) Affiliate means any Person which controls, is
---------
controlled by or is under common control with, another Person. For purposes of
this definition, "control" means with respect to a corporation or limited
liability company the right to exercise, directly or
23
<PAGE>
indirectly, more than fifty percent (50%) of the voting rights attributable to
the controlled corporation or limited liability company and, with respect to any
individual, partnership, trust, other entity or association, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled entity.
(d) Beneficial owner, beneficially own, beneficial
----------------
ownership and words of similar import have the meanings ascribed to such terms
in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(e) Change of Control means (i) the Company's sale of all
-----------------
or substantially all of its assets, (ii) any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation) which will result in the holders of the outstanding Voting Stock
immediately prior to such transaction or series of related transactions holding
less than fifty percent (50%) of the voting equity securities of the surviving
entity immediately following such transaction or (iii) any Person or group
(other than Stockholder or any of its Affiliates) becomes the beneficial owner
of more than fifty percent (50%) of the total voting power of the outstanding
voting equity securities of the Company.
(f) Closing means the closing of the STEAG Transaction
-------
contemplated by the Combination Agreement.
(g) Commission means the Securities and Exchange
----------
Commission.
(h) Common Stock means the common stock, par value $0.001
------------
per share, of the Company.
(i) Disinterested Director means a director of the Company
----------------------
who is not a Stockholder Representative and who is not and has never been an
officer, employee or paid consultant of Stockholder or any of its Affiliates.
(j) Disinterested Director Approval means approval by the
-------------------------------
Board of Directors, which approval included votes to approve by a majority of
all the Disinterested Directors, or a public recommendation to the stockholders
of the Company approved by a majority of the Disinterested Directors.
(k) Exchange Act means the Securities Exchange Act of 1934,
------------
as amended, or any successor rule (together with the rules and regulations of
the Commission promulgated thereunder).
(l) Independent Director means any incumbent director of
--------------------
the Company as of the Effective Date other than Mattson, and any future director
of the Company who is not and has never been an officer, employee or paid
consultant of (i) Stockholder or any of its Affiliates or (ii) the Company or
any of its Affiliates.
(m) Person means an individual, partnership, corporation,
------
trust or unincorporated organization or any federal, state, local or foreign
government or any political subdivision thereof (including, without limitation,
the executive and legislative branches thereof)
24
<PAGE>
or any department, commission, board, bureau, agency, court, panel or other
instrumentality of any kind of any of the foregoing.
(n) Securities Act means the Securities Act of 1933, as
--------------
amended, or any successor rule (together with the rules and regulations of the
Commission promulgated thereunder).
(o) Subsidiary means, with respect to any party, any
----------
corporation, limited liability company, partnership, joint venture or other
business association or entity, at least a majority of the voting securities or
economic interests of which is directly or indirectly owned or controlled by
such party or by any one or more of its Subsidiaries.
(p) Voting Stock means Common Stock, any securities
------------
convertible into or exchangeable for Common Stock or any other right or option
to acquire Common Stock of the Company.
[Signature page follows.]
25
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
MATTSON TECHNOLOGY, INC.
By: /s/ Brad Mattson
-------------------------------------
Brad Mattson, Chairman and
Chief Executive Officer
STEAG ELECTRONIC SYSTEMS AG
By: /s/ ppa Lockowandt
-------------------------------------
Dr. Peter Lockowandt, General Counsel
By: /s/ R. Thaler
-------------------------------------
Dr. Rolf Thaler, Chief Financial
Officer
BRAD MATTSON
/s/ Brad Mattson
-------------------------------------
26
<PAGE>
EXHIBIT A
SECOND AMENDED AND RESTATED
BYLAWS
OF
MATTSON TECHNOLOGY, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1. STOCKHOLDERS.............................................. 1
1.1 Place of Meetings.......................................... 1
1.2 Annual Meeting............................................. 1
1.3 Special Meetings........................................... 1
1.4 Notice of Meetings......................................... 1
1.5 Voting List................................................ 1
1.6 Quorum..................................................... 2
1.7 Adjournments............................................... 2
1.8 Voting and Proxies......................................... 2
1.9 Action at Meeting.......................................... 2
1.10 Notice of Stockholder Business............................. 3
1.11 Conduct of Business........................................ 3
1.12 No Stockholder Action Without Meeting...................... 4
ARTICLE 2. BOARD OF DIRECTORS........................................ 4
2.1 General Powers............................................. 4
2.2 Number and Term of Office.................................. 4
2.3 Vacancies and Newly Created Directorships; Qualification... 5
2.4 Resignation................................................ 5
2.5 Regular Meetings........................................... 5
2.6 Special Meetings........................................... 6
2.7 Notice of Special Meetings................................. 6
2.8 Participation in Meetings by Telephone Conference Calls.... 6
2.9 Quorum..................................................... 6
2.10 Action at Meeting.......................................... 6
2.11 Action by Consent.......................................... 6
2.12 Removal.................................................... 6
2.13 Committees................................................. 7
2.14 Compensation of Directors.................................. 7
2.15 Nomination of Director Candidates; Nominating Committee.... 7
ARTICLE 3. OFFICERS.................................................. 9
3.1 Enumeration................................................ 9
3.2 Election................................................... 9
3.3 Qualification.............................................. 9
3.4 Tenure..................................................... 9
3.5 Resignation and Removal.................................... 9
3.6 Chairman of the Board...................................... 9
3.7 Vice Chairman of the Board................................. 10
3.8 Chief Executive Officer.................................... 10
3.9 President.................................................. 10
3.10 Vice Presidents............................................ 10
3.11 Secretary and Assistant Secretaries........................ 10
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.12 Chief Financial Officer.................................... 11
3.13 Salaries................................................... 11
3.14 Delegation of Authority.................................... 11
ARTICLE 4. CAPITAL STOCK............................................. 11
4.1 Issuance of Stock.......................................... 11
4.2 Certificates of Stock...................................... 11
4.3 Transfers.................................................. 12
4.4 Lost, Stolen or Destroyed Certificates..................... 12
4.5 Record Date................................................ 12
ARTICLE 5. GENERAL PROVISIONS....................................... 13
5.1 Fiscal Year................................................ 13
5.2 Corporate Seal............................................. 13
5.3 Waiver of Notice........................................... 13
5.4 Actions with Respect to Securities of Other Corporations... 13
5.5 Evidence of Authority...................................... 13
5.6 Certificate of Incorporation............................... 13
5.7 Severability............................................... 13
5.8 Pronouns................................................... 14
5.9 Notices.................................................... 14
5.10 Reliance Upon Books, Reports and Records................... 14
5.11 Time Periods............................................... 14
5.12 Facsimile Signatures....................................... 14
ARTICLE 6. AMENDMENTS............................................... 14
6.1 By the Board of Directors.................................. 14
6.2 By the Stockholders........................................ 15
ARTICLE 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS................ 15
7.1 Right to Indemnification................................... 15
7.2 Right of Claimant to Bring Suit............................ 16
7.3 Indemnification of Employees and Agents.................... 16
7.4 Non-Exclusivity of Rights.................................. 16
7.5 Indemnification Contracts.................................. 16
7.6 Insurance.................................................. 16
7.7 Effect of Amendment........................................ 17
</TABLE>
-ii-
<PAGE>
SECOND AMENDED AND RESTATED
BYLAWS OF MATTSON TECHNOLOGY, INC.
Article 1. Stockholders
------------
1.1 Place of Meetings. All meetings of stockholders shall be held at such
-----------------
place within or without the State of Delaware as may be designated from time to
time by the Board of Directors or the Chief Executive Officer or, if not so
designated, at the registered office of the Corporation.
1.2 Annual Meeting. The annual meeting of stockholders for the election
--------------
of directors and for the transaction of such other business as may properly be
brought before the meeting shall be held on a date to be fixed by the Board of
Directors or the Chief Executive Officer at the time and place to be fixed by
the Board of Directors or the Chief Executive Officer and stated in the notice
of the meeting. If no annual meeting is held in accordance with the foregoing
provisions, the Board of Directors shall cause the meeting to be held as soon
thereafter as convenient.
1.3 Special Meetings. Special meetings of Stockholders may be called at
----------------
any time only by the Board of Directors, the Chairman of the Board or the Chief
Executive Officer.
1.4 Notice of Meetings. Written notice of each meeting of stockholders,
------------------
whether annual or special, shall be given not less than ten (10) nor more than
sixty (60) days before the date on which the meeting is to be held, to each
stockholder entitled to vote at such meeting, except as otherwise provided
herein or as required by law (meaning here and hereafter, as required from time
to time by the Delaware General Corporation Law or the Certificate of
Incorporation). The notices of all meetings shall state the place, date and hour
of the meeting. The notice of a special meeting shall state, in addition, the
purpose or purposes for which the meeting is called. If mailed, notice is given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the Corporation.
1.5 Voting List. The officer who has charge of the stock ledger of the
-----------
Corporation shall prepare, at least ten (10) days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting, or
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time of the meeting, and may be inspected by any stockholder who is
present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
1
<PAGE>
1.6 Quorum. Except as otherwise provided by law or these Bylaws, the
------
holders of a majority of the shares of the capital stock of the Corporation
entitled to vote at the meeting, present in person or represented by proxy,
shall constitute a quorum for the transaction of business. If a quorum shall
fail to attend any meeting, the chairman of the meeting or the holders of a
majority of the shares of stock entitled to vote who are present, in person or
by proxy, may adjourn the meeting to another place, date or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
1.7 Adjournments. Any meeting of stockholders may be adjourned to any
------------
other time and to any other place at which a meeting of stockholders may be held
under these Bylaws by the holders of a majority of the shares of stock present
or represented at the meeting and entitled to vote, although less than a quorum,
or, if no stockholder is present, by any officer entitled to preside at or to
act as Secretary of such meeting. When a meeting is adjourned to another place,
date or time, written notice need not be given of the adjourned meeting if the
place, date and time thereof are announced at the meeting at which the
adjournment is taken; provided, however, that if the date of any adjourned
meeting is more than thirty (30) days after the date for which the meeting was
originally noticed, or if a new record date is fixed for the adjourned meeting,
written notice of the place, date, and time of the adjourned meeting shall be
given in conformity herewith. At the adjourned meeting, the Corporation may
transact any business which might have been transacted at the original meeting.
1.8 Voting and Proxies. Each stockholder shall have one vote for each
------------------
share of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise provided
by law. Each stockholder of record entitled to vote at a meeting of
stockholders, may vote in person or may authorize any other person or persons to
vote or act for him by written proxy executed by the stockholder or his
authorized agent or by a transmission permitted by law and delivered to the
Secretary of the Corporation. No stockholder may authorize more than one proxy
for his shares. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this Section may
be substituted or used in lieu of the original writing or transmission for any
and all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile transmission or other reproduction shall be a
complete reproduction of the entire original writing or transmission.
1.9 Action at Meeting. When a quorum is present at any meeting, any
-----------------
election shall be determined by a plurality of the votes cast by the
stockholders entitled to vote at the election, and all other matters shall be
determined by a majority of the votes cast affirmatively or negatively on the
matter (or if there are two or more classes of stock entitled to vote as
separate classes, then in the case of each such class, a majority of each such
class present or represented and voting affirmatively or negatively on the
matter) shall decide such matter, except when a different vote is required by
express provision of law, the Certificate of Incorporation or these Bylaws;
provided, however, that if the Board of Directors by resolution determines that
-------- -------
the vote
2
<PAGE>
of a larger portion of the Corporation's stock is required to approve any
particular matter in order to satisfy or comply with applicable governmental or
regulatory requirements, such as NASDAQ corporate governance rules or Internal
Revenue Service stockholder approval guidelines, then such higher vote shall be
deemed required by these Bylaws.
All voting, including on the election of directors, but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting. The Corporation may, and to the extent
required by law, shall, in advance of any meeting of stockholders, appoint one
or more inspectors to act at the meeting and make a written report thereof. The
Corporation may designate one or more persons as an alternate inspector to
replace any inspector who fails to act. If no inspector or alternate is able to
act at a meeting of stockholders, the person presiding at the meeting may, and
to the extent required by law, shall, appoint one or more inspectors to act at
the meeting. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability.
1.10 Notice of Stockholder Business. At an annual meeting of the
------------------------------
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii) properly
brought before the meeting by or at the direction of the Board of Directors, or
(iii) properly brought before an annual meeting by a stockholder. For business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder proposal to be presented at an
annual meeting shall be received at the Corporation's principal executive
offices not less than 120 calendar days in advance of the date that the
Corporation's (or the Corporation's predecessor's) proxy statement was released
to stockholders in connection with the previous year's annual meeting of
stockholders, except that if no annual meeting was held in the previous year or
the date of the annual meeting has been advanced by more than 30 calendar days
from the date contemplated at the time of the previous year's proxy statement,
notice by the stockholders to be timely must be received not later than the
close of business on the tenth day following the day on which the date of the
annual meeting is publicly announced.
A stockholder's notice to the Secretary of the Corporation shall set forth
as to each matter the stockholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be brought before the annual
meeting, (ii) the name and address, as they appear on the Corporation's books,
of the stockholder proposing such business, (iii) the class and number of shares
of the Corporation which are beneficially owned by the stockholder, and (iv) any
material interest of the stockholder in such business.
1.11 Conduct of Business. At every meeting of the stockholders, the
-------------------
Chairman of the Board, if there is such an officer, or if not, the Chief
Executive Officer or such other person as is
3
<PAGE>
appointed by the Board of Directors, shall act as Chairman. The Secretary of the
Corporation or a person designated by the Chairman of the meeting shall act as
Secretary of the meeting. Unless otherwise approved by the Chairman of the
meeting, attendance at the stockholders' meeting is restricted to stockholders
of record, persons authorized in accordance with Section 1.8 of these Bylaws to
act by proxy, and officers of the Corporation.
The Chairman of the meeting shall call the meeting to order, establish the
agenda, and conduct the business of the meeting in accordance therewith or, at
the Chairman's discretion, it may be conducted otherwise in accordance with the
wishes of the stockholders in attendance. The date and time of the opening and
closing of the polls for each matter upon which the stockholders will vote at
the meeting shall be announced at the meeting.
The Chairman shall also conduct the meeting in an orderly manner, rule on
the precedence of, and procedure on, motions and other procedural matters, and
exercise discretion with respect to such procedural matters with fairness and
good faith toward all those entitled to take part. The Chairman may impose
reasonable limits on the amount of time taken up at the meeting on discussion in
general or on remarks by any one stockholder. Should any person in attendance
become unruly or obstruct the meeting proceedings, the Chairman shall have the
power to have such person removed from participation. Notwithstanding anything
in the Bylaws to the contrary, no business shall be conducted at a meeting
except in accordance with the procedures set forth in this Section 1.11 and
Section 1.10 above. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that any proposed item of business was not
brought before the meeting in accordance with the provisions of this Section
1.11 and Section 1.10, and if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
1.12 No Stockholder Action Without Meeting. Any action required or
-------------------------------------
permitted to be taken by the stockholders of the Corporation must be effected at
a duly called annual or special meeting of stockholders of the Corporation and
may not be effected by any consent in writing by such stockholders.
Article 2. Board of Directors
------------------
2.1 General Powers. The business and affairs of the Corporation shall be
--------------
managed by or under the direction of a Board of Directors, who may exercise all
of the powers of the Corporation except as otherwise provided by law or the
Certificate of Incorporation. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law or as
otherwise set forth in these Bylaws, may exercise the powers of the full Board
until the vacancy is filled.
2.2 Number and Term of Office.
-------------------------
(a) The authorized number of directors shall be seven (7) until the
termination of the Stockholder Agreement between the Corporation, STEAG
Electronic Systems AG and Brad Mattson effective concurrent with the
effective date of these Bylaws (the "Stockholder Agreement"). Following
termination of the Stockholder Agreement, the
4
<PAGE>
authorized number of directors may be fixed from time to time exclusively
by the Board of Directors pursuant to a resolution adopted by a majority of
the total number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption).
(b) The directors shall be divided into three classes, with the term
of office of the first class (Class I) to expire at the first annual
meeting of stockholders held after January 1, 2001; the term of office of
the second class (Class II) to expire at the second annual meeting of
stockholders held after January 1, 2001; the term of office of the third
class (Class III) to expire at the third annual meeting of stockholders
held after the January 1, 2001; and thereafter for each such term to expire
at each third succeeding annual meeting of stockholders after such
election. All directors shall hold office until the expiration of the term
for which elected and until their respective successors are elected and
qualified, except in the case of the death, resignation or removal of any
director. The class membership of the incumbent directors shall remain
unaffected by the adoption of these Bylaws.
2.3 Vacancies and Newly Created Directorships; Qualification. Newly
--------------------------------------------------------
created directorships resulting from any increase in the authorized number of
directors, or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification or other cause (including removal from
office by a vote of the stockholders) may be filled only by a majority vote of
the directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of stockholders
at which the term of office of the class to which they have been elected
expires; provided, however, that until the termination of the Stockholder
-------- -------
Agreement, (a) if there is a vacant directorship as the result the resignation,
retirement, disqualification, removal, death, or other cause of a STEAG
Representative (as defined in Section 2.15(e) below), no person shall be
eligible for nomination and qualified to fill such vacancy other than another
STEAG Representative, and (b) if there is any other vacant directorship,
including any vacancy as a result of any increase in the authorized number of
directors, no person shall be eligible for nomination and qualified to fill such
vacancy other than a person nominated in accordance with Section 2.15 herein. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
2.4 Resignation. Any director may resign by delivering his written
-----------
resignation to the Corporation at its principal office or to the Chief Executive
Officer or Secretary. Such resignation shall be effective upon receipt unless it
is specified to be effective at some other time or upon the happening of some
other event.
2.5 Regular Meetings. Regular meetings of the Board of Directors may be
----------------
held without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the Board of Directors;
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after and at the same place as
the annual meeting of stockholders.
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2.6 Special Meetings. Special meetings of the Board of Directors may be
----------------
held at any time and place, within or without the State of Delaware, designated
in a call by the Chairman of the Board, the Chief Executive Officer, two or more
directors, or by one director in the event that there is only a single director
in office.
2.7 Notice of Special Meetings. Notice of any special meeting of
--------------------------
directors shall be given to each director by the Secretary or by the officer or
one of the directors calling the meeting. Notice shall be duly given to each
director (i) by giving notice to such director in person or by telephone or
electronic voice message system at least 48 hours in advance of the meeting,
(ii) by sending a telegram, email, telecopy or telex, or delivering written
notice by hand, to his last known business or home address at least 48 hours in
advance of the meeting, or (iii) by mailing written notice to his last known
business or home address at least seven (7) days in advance of the meeting. A
notice or waiver of notice of a meeting of the Board of Directors need not
specify the purposes of the meeting. Unless otherwise indicated in the notice
thereof, any and all business may be transacted at a special meeting.
2.8 Participation in Meetings by Telephone Conference Calls. Directors or
-------------------------------------------------------
any members of any committee designated by the directors may participate in a
meeting of the Board of Directors or such committee by means of conference
telephone, videoconference equipment, or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation by such means shall constitute presence in person at such meeting.
2.9 Quorum. A majority of the total number of authorized directors shall
------
constitute a quorum at any meeting of the Board of Directors. In the event one
or more of the directors shall be disqualified to vote at any meeting, then the
required quorum shall be reduced by one for each such director so disqualified;
provided, however, that in no case shall less than one-third (1/3) of the number
so fixed constitute a quorum. In the absence of a quorum at any such meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice other than announcement at the meeting, until a quorum
shall be present. Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or at a meeting of a
committee which authorizes a particular contract or transaction.
2.10 Action at Meeting. At any meeting of the Board of Directors at which
-----------------
a quorum is present, the vote of a majority of those present shall be sufficient
to take any action, unless a different vote is specified by law, the Certificate
of Incorporation or these Bylaws.
2.11 Action by Consent. Any action required or permitted to be taken at
-----------------
any meeting of the Board of Directors or of any committee of the Board of
Directors may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent to the action in writing. Any such
written consents shall be filed with the minutes of proceedings of the Board or
committee.
2.12 Removal. Any directors, or the entire Board of Directors, may be
-------
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least a
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majority of the voting power of all of the outstanding shares of capital stock
entitled to vote generally in the election of directors, voting together as a
single class.
2.13 Committees. The Board of Directors may designate one or more
----------
committees, each committee to consist of one or more of the directors of the
Corporation, with such lawfully delegated powers and duties as it therefor
confers, to serve at the pleasure of the Board. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members of the
committee present at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors and subject to the provisions of the
General Corporation Law of the State of Delaware, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it. Each such
committee shall keep minutes and make such reports as the Board of Directors may
from time to time request. Except as the Board of Directors may otherwise
determine, any committee may make rules for the conduct of its business, but
unless otherwise provided by such rules, its business shall be conducted as
nearly as possible in the same manner as is provided in these Bylaws for the
Board of Directors.
2.14 Compensation of Directors. Directors may be paid such compensation
-------------------------
for their services and such reimbursement for expenses of attendance at meetings
as the Board of Directors may from time to time determine. No such payment shall
preclude any director from serving the Corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.
2.15 Nomination of Director Candidates; Nominating Committee.
-------------------------------------------------------
(a) There is hereby established a nominating committee to evaluate
and propose nominees to serve as directors of the Corporation (the
"Nominating Committee"). Until the termination of the Stockholder
Agreement, the Nominating Committee shall be comprised of three (3)
directors, at least one of whom shall be a STEAG Representative, as defined
below.
(b) Nominations for the election and appointment of directors,
including vacant directorships, whether caused by death, resignation,
disqualification, removal, retirement, or other causes, shall be made
exclusively by the Nominating Committee, subject to (i) Section 2.15(c) and
(ii) the rights of stockholders pursuant to Section 2.15(d). For a period
of three (3) years following the effective date of the Stockholder
Agreement, if at any time there is a vacant directorship other than a
directorship previously held by a STEAG Representative, the Nominating
Committee shall nominate to fill such vacancy only those persons who
receive the unanimous approval of the members of the Nominating Committee.
Until the termination of the Stockholder Agreement, the Nominating
Committee shall nominate only such nominees as would, if
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elected, result in the following composition of the Board of Directors: (i)
two (2) STEAG Representatives, (ii) the Chief Executive Officer of the
Corporation, and (iii) at least three (3) incumbent directors of the
Corporation as of June 27, 2000, and/or persons who are Independent
Directors, as defined below.
(c) In the event that the Nominating Committee fails to nominate a
nominee within four (4) months after a directorship becomes vacant, the
Board of Directors may act to elect and appoint a nominee to fill such
vacancy; provided that the election and appointment of such nominee is
consistent with maintaining the composition of the Board of Directors
described in the last sentence of Section 2.15(b).
(d) Any stockholder entitled to vote in the election of directors
generally may nominate one or more persons for election as directors at a
meeting only if timely notice of such stockholder's intent to make such
nomination or nominations has been given in writing to the Secretary of the
Corporation. To be timely, a stockholder nomination for a director to be
elected at an annual meeting must be received at the Corporation's
principal executive offices not less than 120 calendar days in advance of
the date that the Corporation's (or the Corporation's predecessor's) proxy
statement was released to stockholders in connection with the previous
year's annual meeting of stockholders, except that if no annual meeting was
held in the previous year or the date of the annual meeting has been
changed by more than 30 calendar days from the date contemplated at the
time of the previous year's proxy statement, or in the event of a
nomination for director to be elected at a special meeting, notice by the
stockholders to be timely must be received not later than the close of
business on the tenth day following the day on which such notice of the
date of the special meeting was mailed or such public disclosure was made.
Each such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote for the election of
directors on the date of such notice and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to
be made by the stockholder; (d) such other information regarding each
nominee proposed by such stockholder as would be required to be included in
a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each nominee
to serve as a director of the Corporation if so elected.
(e) For purposes of these Bylaws, the term "STEAG Representative"
means a person designated by STEAG in accordance with Section 1.1(a) of the
Stockholder Agreement for election or appointment as a director of the
Corporation. For purposes of these Bylaws, the term "Independent Director"
means any person who has not and has never been an officer, employee or
paid consultant of the Corporation, STEAG or any of their respective
Affiliates (as defined in the Stockholder Agreement). For purposes of
8
<PAGE>
these Bylaws, the term "STEAG" means STEAG Electronic Systems AG, or its
successors and permitted assigns in accordance with the Stockholder
Agreement.
(f) In the event that a person is validly designated as a nominee in
accordance with this Section 2.15 and shall thereafter become unable or
unwilling to stand for election to the Board of Directors, any proposed
substitute nominee must be approved for nomination in accordance with the
foregoing provisions of this Section 2.15.
(g) If the Chairman of a stockholder meeting at which a vote is to be
taken for the election of directors determines that a nomination of any
candidate for election as a director at such meeting was not made in
accordance with the applicable provisions of this Section 2.15, such
nomination shall be void.
Article 3. Officers
--------
3.1 Enumeration. The officers of the Corporation shall consist of a Chief
-----------
Executive Officer, a President, a Secretary, a Chief Financial Officer and such
other officers with such other titles as the Board of Directors shall determine,
including, at the discretion of the Board of Directors, a Chairman of the Board,
a Vice Chairman of the Board, and one or more Vice Presidents and Assistant
Secretaries; provided, that for at least one year after the Stockholder
--------
Agreement becomes effective, the officers of the Corporation shall include a
Chairman of the Board and a Vice Chairman of the Board. The Board of Directors
may appoint such other officers as it may deem appropriate.
3.2 Election. Subject to such powers as are delegated by the Board of
--------
Directors to any Executive Staffing Committee or other committee, officers shall
be elected annually by the Board of Directors at its first meeting following the
annual meeting of stockholders and may be appointed by the Board of Directors at
any other meeting.
3.3 Qualification. No officer need be a stockholder. Any two or more
-------------
offices may be held by the same person.
3.4 Tenure. Except as otherwise provided by law, by the Certificate of
------
Incorporation or by these Bylaws, each officer shall hold office until his
successor is elected and qualified, unless a different term is specified in the
vote appointing him, or until his earlier death, resignation or removal.
3.5 Resignation and Removal. Any officer may resign by delivering his
-----------------------
written resignation to the Corporation at its principal office or to the Chief
Executive Officer or Secretary. Such resignation shall be effective upon receipt
unless it is specified to be effective at some other time or upon the happening
of some other event. Any officer may be removed at any time, with or without
cause, by the Board of Directors.
3.6 Chairman of the Board. The Board of Directors may appoint a Chairman
---------------------
of the Board; provided, that for at least one year after the Stockholder
--------
Agreement becomes effective, the Board of Directors shall appoint a Chairman of
the Board. If the Board of Directors appoints a Chairman of the Board, he shall
perform such duties and possess such powers as are set forth in
9
<PAGE>
these Bylaws or assigned to him by the Board of Directors; provided, however,
that the Chairman of the Board shall have the power, at any time to time, to
fully or partially delegate any such duties and powers to the Vice Chairman of
the Board. Unless otherwise provided by the Board of Directors, he shall preside
at all meetings of the stockholders. The Chairman of the Board shall preside at
all meetings of the Board of Directors.
3.7 Vice Chairman of the Board. The Board of Directors may appoint a Vice
--------------------------
Chairman of the Board; provided, that for at least one year after the
--------
Stockholder Agreement becomes effective, the Board of Directors shall appoint a
Vice Chairman of the Board.. If the Board of Directors appoints a Vice Chairman
of the Board, he shall perform such duties and possess such powers as are
assigned to him by the Board of Directors and/or delegated to him by the
Chairman of the Board. In the event of the absence, disability or refusal to
perform his duties of the Chairman of the Board, the Vice Chairman shall perform
the duties of the Chairman and when so performing shall have all the powers of
the Chairman.
3.8 Chief Executive Officer. The Chief Executive Officer shall, subject to
-----------------------
the direction of the Board of Directors, have responsibility for the general
management and control of the business and affairs of the Corporation and shall
perform all duties and have all powers which are commonly incident to the office
of chief executive or which are delegated to him or her by the Board of
Directors. The Chief Executive Officer shall perform such other duties and shall
have such other powers as the Board of Directors may from time to time
prescribe. He or she shall have power to sign stock certificates, contracts and
other instruments of the Corporation which are authorized and shall have general
supervision and direction of all of the other officers, employees and agents of
the Corporation, other than the Chairman of the Board. Unless otherwise provided
by the Board of Directors, in the absence of the Chairman of the Board, he shall
preside at all meetings of the stockholders.
3.9 President. Should there exist an office of President which is held by
---------
a person other than the Chief Executive Officer and which differs from the
office of Chief Executive Officer, the President shall have the responsibilities
delegated to him or her by the Board of Directors.
3.10 Vice Presidents. Any Vice President shall perform such duties and
---------------
possess such powers as the Board of Directors or the Chief Executive Officer may
from time to time prescribe. In the event of the absence, disability or refusal
to perform his duties of the President, the Vice President (or if there shall be
more than one, the Vice Presidents in the order determined by the Board of
Directors) shall perform the duties of the Chief Executive Officer and when so
performing shall have all the powers of and be subject to all the restrictions
upon the Chief Executive Officer. The Board of Directors may assign to any Vice
President the title of Executive Vice President, Senior Vice President or any
other title selected by the Board of Directors.
3.11 Secretary and Assistant Secretaries. The Secretary shall perform such
-----------------------------------
duties and shall have such powers as the Board of Directors or the Chief
Executive Officer may from time to time prescribe. In addition, the Secretary
shall perform such duties and have such powers as are incident to the office of
the Secretary, including, without limitation, the duty and power to
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<PAGE>
give notices of all meetings of stockholders and special meetings of the Board
of Directors, to keep a record of the proceedings of all meetings of
stockholders and the Board of Directors, to maintain a stock ledger and prepare
lists of stockholders and their addresses as required, to be custodian of
corporate records and the corporate seal and to affix and attest to the same on
documents.
Any Assistant Secretary shall perform such duties and possess such powers
as the Board of Directors, the Chief Executive Officer or the Secretary may from
time to time prescribe. In the event of the absence, disability or refusal to
perform his duties of the Secretary, the Assistant Secretary (or if there shall
be more than one, the Assistant Secretaries in the order determined by the Board
of Directors) shall perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant Secretary at any meeting
of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.
3.12 Chief Financial Officer. Unless otherwise designated by the Board of
-----------------------
Directors, the Chief Financial Officer shall be the Treasurer. The Chief
Financial Officer shall perform such duties and shall have such powers as may
from time to time be assigned to him by the Board of Directors or the Chief
Executive Officer. In addition, the Chief Financial Officer shall perform such
duties and have such powers as are incident to the office of chief financial
officer, including without limitation, the duty and power to keep and be
responsible for all funds and securities of the Corporation, to maintain the
financial records of the Corporation, to deposit funds of the Corporation in
depositories as authorized, to disburse such funds as authorized, to make proper
accounts of such funds, and to render as required by the Board of Directors
accounts of all such transactions and of the financial condition of the
Corporation.
3.13 Salaries. Officers of the Corporation shall be entitled to such
--------
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
3.14 Delegation of Authority. The Board of Directors may from time to time
-----------------------
delegate the powers or duties of any officer to any other officers or agents,
notwithstanding any provision hereof.
Article 4. Capital Stock.
-------------
4.1 Issuance of Stock. Unless otherwise voted by the stockholders and
-----------------
subject to the provisions of the Certificate of Incorporation, the whole or any
part of any unissued balance of the authorized capital stock of the Corporation
or the whole or any part of any unissued balance of the authorized capital stock
of the Corporation held in its treasury may be issued, sold, transferred or
otherwise disposed of by vote of the Board of Directors in such manner, for such
consideration and on such terms as the Board of Directors may determine.
4.2 Certificates of Stock. Every holder of stock of the Corporation shall
---------------------
be entitled to have a certificate, in such form as may be prescribed by law and
by the Board of Directors,
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certifying the number and class of shares owned by him in the Corporation. Each
such certificate shall be signed by, or in the name of the Corporation by, the
Chairman or Vice Chairman, if any, of the Board of Directors, or the Chief
Executive Officer, President or a Vice President, and the Chief Financial
Officer, or the Secretary or an Assistant Secretary of the Corporation. Any or
all of the signatures on the certificate may be a facsimile.
Each certificate for shares of stock which are subject to any restriction
on transfer pursuant to the Certificate of Incorporation, the Bylaws, applicable
securities laws or any agreement among any number of shareholders or among such
holders and the Corporation shall have conspicuously noted on the face or back
of the certificate either the full text of the restriction or a statement of the
existence of such restriction.
4.3 Transfers. Except as otherwise established by rules and regulations
---------
adopted by the Board of Directors, and subject to applicable law, shares of
stock may be transferred on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or authenticity of signature
as the Corporation or its transfer agent may reasonably require. Except as may
be otherwise required by law, by the Certificate of Incorporation or by the
Bylaws, the Corporation shall be entitled to treat the record holder of stock as
shown on its books as the owner of such stock for all purposes, including the
payment of dividends and the right to vote with respect to such stock,
regardless of any transfer, pledge or other disposition of such stock until the
shares have been transferred on the books of the Corporation in accordance with
the requirements of these Bylaws.
4.4 Lost, Stolen or Destroyed Certificates. The Corporation may issue a
--------------------------------------
new certificate of stock in place of any previously saved certificate alleged to
have been lost, stolen, or destroyed, upon such terms and conditions as the
Board of Directors may prescribe, including the presentation of reasonable
evidence of such loss, theft or destruction and the giving of such indemnity as
the Board of Directors may require for the protection of the Corporation or any
transfer agent or registrar.
4.5 Record Date. The Board of Directors may fix in advance a date as a
-----------
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders, or entitled to receive payment of any
dividend or other distribution or allotment of any rights in respect of any
change, concession or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than sixty (60) nor less than ten
(10) days before the date of such meeting, nor more than sixty (60) days prior
to any other action to which such record date relates.
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day before the day on which notice is given, or, if
notice is waived, at the close of business on the day before the day on which
the meeting is held. The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting when no prior
action by the Board of Directors is necessary, shall be the day on which the
first written consent is expressed. The record date for determining stockholders
for any other purpose shall be at the close of
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business on the day on which the Board of Directors adopts the resolution
relating to such purpose.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Article 5. General Provisions.
------------------
5.1 Fiscal Year. The fiscal year of the Corporation shall be as fixed by
-----------
the Board of Directors.
5.2 Corporate Seal. The corporate seal shall be in such form as shall be
--------------
approved by the Board of Directors.
5.3 Waiver of Notice. Whenever any notice whatsoever is required to be
----------------
given by law, by the Certificate of Incorporation or by these Bylaws, a waiver
of such notice either in writing signed by the person entitled to such notice or
such person's duly authorized attorney, or by telecopy, telegraph, cable or any
other available method, whether before, at or after the time stated in such
waiver, or the appearance of such person or persons at such meeting in person or
by proxy, shall be deemed equivalent to such notice.
5.4 Actions with Respect to Securities of Other Corporations. Except as
--------------------------------------------------------
the Board of Directors may otherwise designate, the Chief Executive Officer or
any officer of the Corporation authorized by the Chief Executive Officer shall
have the power to vote and otherwise act on behalf of the Corporation, in person
or proxy, and may waive notice of, and act as, or appoint any person or persons
to act as, proxy or attorney-in-fact to this Corporation (with or without power
of substitution) at any meeting of stockholders or shareholders (or with respect
to any action of stockholders) of any other corporation or organization, the
securities of which may be held by this Corporation and otherwise to exercise
any and all rights and powers which this Corporation may possess by reason of
this Corporation's ownership of securities in such other corporation or other
organization.
5.5 Evidence of Authority. A certificate by the Secretary, or an
---------------------
Assistant Secretary, or a temporary Secretary, as to any action taken by the
stockholders, directors, a committee or any officer or representative of the
Corporation shall as to all persons who rely on the certificate in good faith be
conclusive evidence of such action.
5.6 Certificate of Incorporation. All references in these Bylaws to the
----------------------------
Certificate of Incorporation shall be deemed to refer to the Certificate of
Incorporation of the Corporation, as amended and in effect from time to time.
5.7 Severability. Any determination that any provision of these Bylaws is
------------
for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these Bylaws.
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5.8 Pronouns. All pronouns used in these Bylaws shall be deemed to refer
--------
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
5.9 Notices. Except as otherwise specifically provided in these Bylaws or
-------
required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the mails, postage paid, or by sending such notice by prepaid
telegram, mailgram, telecopy or commercial courier service. Any such notice
shall be addressed to such stockholder, director, officer, employee or agent at
his or her last known address as the same appears on the books of the
Corporation. The time when such notice shall be deemed to be given shall be the
time such notice is received by such stockholder, director, officer, employee or
agent, or by any person accepting such notice on behalf of such person, if hand
delivered, or the time such notice is dispatched, if delivered through the mails
or be telegram or mailgram.
5.10 Reliance Upon Books, Reports and Records. Each director, each member
----------------------------------------
of any committee designated by the Board of Directors, and each officer of the
Corporation shall, in the performance of his duties, be fully protected in
relying in good faith upon the books of account or other records of the
Corporation, including reports made to the Corporation by any of its officers,
by an independent certified public accountant, or by an appraiser selected with
reasonable care.
5.11 Time Periods. In applying any provision of these Bylaws which require
------------
that an act be done or not done a specified number of days prior to an event or
that an act be done during a period of a specified number of days prior to an
event, calendar days shall be used, the day of the doing of the act shall be
excluded, and the day of the event shall be included.
5.12 Facsimile Signatures. In addition to the provisions for use of
--------------------
facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
Article 6. Amendments.
----------
6.1 By the Board of Directors. Except as is otherwise set forth in these
-------------------------
Bylaws, these Bylaws may be altered, amended or repealed or new Bylaws may be
adopted by the affirmative vote of a majority of the directors present at any
regular or special meeting of the Board of Directors at which a quorum is
present; provided, however, that until the termination of the Stockholder
Agreement, Sections 2.2, 2.3, 2.6, 2.7, 2.8, 2.15, 3.1 and 3.6 herein, and this
Section 6.1, may only be altered, amended or repealed pursuant to a resolution
adopted with approval by (i) a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board for
adoption), (ii) at least one STEAG Representative, and (iii) a majority of the
Independent Directors then serving on the Board; and provided, further, that if
any amendment to Section 2.2, 2.3, 2.6, 2.7, 2.8, 2.15, 3.1 or 3.6 or this
Section 6.1 is proposed prior to the termination of the Stockholder Agreement at
a time when there is no STEAG Representative on
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the Board of Directors, then, notwithstanding the foregoing, such amendment may
only be adopted by the affirmative vote of stockholders in accordance with
Section 6.2.
6.2 By the Stockholders. Except as otherwise set forth in these Bylaws,
-------------------
these Bylaws may be altered, amended or repealed or new Bylaws may be adopted by
the affirmative vote of the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the shares of the capital stock of the Corporation issued and
outstanding and entitled to vote at any annual meeting of stockholders, or at
any special meeting of stockholders, provided notice of such alteration,
amendment, repeat or adoption of new Bylaws shall have been stated in the notice
of such special meeting.
Article 7. Indemnification of Directors and Officers.
-----------------------------------------
7.1 Right to Indemnification. Each person who was or is made a party or
------------------------
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation, or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer or employee or in any other capacity while serving as a
director, officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by Delaware Law, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said Law permitted the Corporation to provide prior
to such amendment) against all expenses, liability and loss reasonably incurred
or suffered by such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be a director, officer or
employee and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in Section 7.2 of
--------
this Article 7, the Corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or proceeding (or part thereof)
initiated by such person only if (a) such indemnification is expressly required
to be made by law, (b) the action, suit or proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation, (c) such
indemnification is provided by the Corporation, in its sole discretion, pursuant
to the powers vested in the Corporation under the Delaware General Corporation
Law, or (d) the action, suit or proceeding (or part thereof) is brought to
establish or enforce a right to indemnification under an indemnity agreement or
any other statute or law or otherwise as required under Section 145 of the
Delaware General Corporation Law. Such right shall be a contract right and
shall include the right to be paid by the Corporation expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
--------
however that, unless the Delaware General Corporation Law then so prohibits, the
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payment of such expenses incurred by a director or officer of the Corporation in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is tendered by such person while a director or officer,
including, without limitation. service to an employee benefit plan) in advance
of the final disposition of such proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it should be determined
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ultimately that such director or officer is not entitled to be indemnified under
this Section or otherwise.
7.2 Right of Claimant to Bring Suit. If a claim under Section 7.1 is not
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paid in full by the Corporation within ninety (90) days after a written claim
has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, if such suit is not frivolous or brought in bad faith, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other then an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to this
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct.
7.3 Indemnification of Employees and Agents. The Corporation may, to the
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extent authorized from time to time by the Board of Directors, grant rights to
indemnification, and to the advancement of related expenses, to any employee or
agent of the Corporation to the fullest extent of the provisions of this Article
with respect to the indemnification of and advancement of expenses to directors
and officers of the Corporation.
7.4 Non-Exclusivity of Rights. The rights conferred on any person in
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Sections 7.1 and 7.2 shall not be exclusive of any other right which such
persons may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
7.5 Indemnification Contracts. The Board of Directors is authorized to
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enter into a contract with any director, officer, employee or agent of the
Corporation, or any person serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including employee benefit plans, providing
for indemnification rights equivalent to or, if the Board of Directors so
determines, greater than, those provided for in this Article 7.
7.6 Insurance. The Corporation shall maintain insurance to the extent
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reasonably available, at its expense, to protect itself and any such director,
officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
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7.7 Effect of Amendment. Any amendment, repeal or modification of any
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provision of this Article 7 by the stockholders and the directors of the
Corporation shall not adversely affect any right or protection of a director or
officer of the Corporation existing at the time of such amendment, repeal or
modification.
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