Stockholders Agreement

EXHIBIT 2


STOCKHOLDERS AGREEMENT, dated as of June 19, 1997, among Gateway 2000, Inc., a Delaware corporation ("Purchaser"), Deuce Acquisition Corporation, a Delaware corporation ("Merger Sub"), and Wearnes Technology (Private) Limited, Eugene Lu, Chun Win Wong and Philip A. Harding (each, a "Stockholder").


WHEREAS, Purchaser and Merger Sub propose to enter into simultaneously herewith an Agreement and Plan of Merger, dated as of the date hereof (as amended from time to time, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement, whether or not such Merger Agreement shall be in effect from time to time), with Advanced Logic Research, Inc., a Delaware corporation (the "Company"), which contemplates, among other things, that Purchaser or Merger Sub will commence a tender offer (as modified from time to time as permitted by the Merger Agreement, the "Offer") for all of the outstanding shares of common stock, $.01 par value, of the Company ("Company Common Stock"); and that Merger Sub will merge with the Company pursuant to the merger contemplated by the Merger Agreement (the "Merger");


WHEREAS, as of the date hereof, each Stockholder owns (either beneficially or of record) the number shares of Company Common Stock set forth opposite such Stockholder's name on Exhibit A hereto (all such shares owned by the Stockholders and any shares hereafter acquired by the Stockholders prior to the termination of this Agreement being referred to herein as the "Shares"); and


WHEREAS, as a condition to the willingness of Purchaser to enter into the Merger Agreement, Purchaser has requested that each Stockholder agree, and in order to induce Purchaser to enter into the Merger Agreement, each Stockholder has agreed, severally and not jointly, to enter into this Agreement;


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:


ARTICLE I


OPTION


SECTION 1.1 Grant of Options. Each Stockholder hereby grants to Purchaser
---------------- an irrevocable option (each, an "Option") to purchase, subject to the terms and conditions described herein, such Stockholder's Shares at a price per Share equal to $15.50 (the "Purchase Price"). Each Stockholder agrees to (i) deliver one or more certificates evidencing all of the Shares owned (either beneficially or of record) as of the date hereof (together with any replacement certificates or certificates reflecting additional Shares hereafter acquired, the "Share Certificates") to Purchaser for placement of an appropriate legend reflecting this Agreement; (ii)


keep the Share Certificates at all other times during the term of this Agreement prior to exercise of the Option to purchase such Shares in the safekeeping of the Depositary for the Offer; and (iii) obtain the agreement of the Depositary in form acceptable to Purchaser to notify Purchaser five business days prior to the date such Share Certificates are to be removed from Depositary's safekeeping.


SECTION 1.2 Exercise of Option.
------------------


(a) The Purchaser may exercise any or all of the Options in whole or in part at any time and from time to time that is both (x) after termination of the Merger Agreement pursuant to Section 8.1(c), 8.1(d) (relating to a breach of Section 6.1(b) or Section 6.3) or Section 8.1(f) or if the Purchaser shall terminate the Offer because the Minimum Condition is not satisfied and at or prior to such time the Company has received one or more proposals for a Competing Transaction which at the time of such occurrence has not been absolutely and unconditionally withdrawn or abandoned and (y) before termination of this Agreement. In the event Purchaser wishes to exercise an Option, Purchaser shall send a written notice to each Stockholder whose Shares are being purchased (each a "Selling Stockholder") specifying the place, date and time for the closing of such purchase (each an "Option Closing"). Purchaser's obligation to purchase the Shares upon any exercise of any Option shall be subject to (i) each of the representations and warranties of the Selling Stockholder contained in this Agreement was when made on the date of this Agreement true and correct and is true and correct as of the time of the Option Closing as though made on and as of the time of the Option Closing, (ii) the Selling Stockholder shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Option Closing, (iii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and (iv) no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, executive order or Order that is then in effect and has the effect of prohibiting the purchase of the Shares. Upon request of Purchaser, each Stockholder shall promptly take, or cause to be taken, after the date hereof, all action required to effect all necessary filings by such Stockholder under the HSR Act and shall cooperate with the Purchaser with respect to its filing obligations.


(b) At any Option Closing, each Selling Stockholder will deliver to Purchaser a certificate as to the satisfaction of conditions (i), (ii) and (iv) of the penultimate sentence of Section 1.2(a), and Purchaser will deliver to such Selling Stockholder a certificate of an officer of Purchaser certifying the truth and correctness of Purchaser's representations and warranties contained in this Agreement as if made on the date of the Option Closing.


SECTION 1.3 Purchase of Shares.
------------------


(a) At any Option Closing, (i) Purchaser shall pay the aggregate Purchase Price for the Shares then being purchased from each Selling Stockholder by certified or cashier's check or


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wire transfer, as determined solely by Purchaser, and (ii) each Selling Stockholder shall deliver, or cause to be delivered, to Purchaser one or more Share Certificates evidencing such Stockholder's Shares then being sold, and such Stockholder agrees that such Shares shall be transferred free and clear of all Encumbrances (as defined in Section 7.1(c) below). All such Share Certificates shall be duly endorsed in blank, or with appropriate stock powers, duly executed in blank, attached thereto, in proper form for transfer, with the signature of such Selling Stockholder thereon guaranteed, and with all applicable taxes paid (including any tax stamps attached).


(b) If Purchaser shall exercise any Option pursuant to this Agreement, and without additional consideration, each Selling Stockholder shall execute and deliver further transfers, assignments, endorsements, consents and other instruments as Purchaser may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement and the Merger Agreement, including the transfer of any and all of such Selling Stockholder's Shares sold to Purchaser and the release of any and all Encumbrances covering such Shares.


SECTION 1.4 Certain Option Adjustments. In the event of any dividend or
-------------------------- distribution on the Company Common Stock or any change in the issued and outstanding shares of Company Common Stock by reason of any stock dividend, split-up, combination, recapitalization, merger or other change in the corporate or capital structure of the Company, Purchaser shall be entitled to receive, upon exercise of the Option and upon payment of the Purchase Price, the stock or other securities, cash or property which each Selling Stockholder received (which consideration shall be escrowed with the Depositary during the term of this Agreement on terms satisfactory to Purchaser) or is entitled to receive as a consequence of such dividend, distribution or change.


SECTION 1.5 Termination. This Agreement shall terminate upon the earlier
----------- of (i) the effective time of the Merger, (ii) the date three months after termination of the Merger Agreement or October 15, 1997, if later, and (iii) the termination of the Merger Agreement by the Company solely in accordance with the provisions of Sections 8.1(a), (e) or (g) of the Merger Agreement and is not then terminable pursuant to any other provision of Section 8.1 of the Merger Agreement (the "Termination Date"). In the event of the termination of this Agreement, this Agreement shall forthwith become void and there shall be no liability on the part of either Purchaser or any Stockholder under this Agreement; provided the foregoing provisions shall not limit the liability of any party for breach of this Agreement prior to such termination.


ARTICLE II


VOTING AGREEMENT


SECTION 2.1 Voting Agreement. Each Stockholder hereby agrees that, at any
---------------- meeting of the stockholders of the Company, however called, or in connection with any written consent of the holders of shares of Company Common Stock, the Stockholder shall vote the Shares (a) in


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favor of the approval and adoption of the Merger Agreement, the Merger and all the transactions contemplated by the Merger Agreement and this Agreement and any other actions required in furtherance thereof and hereof and (b) against any Competing Transaction and any actions in furtherance thereof for a period ending three months after the termination of the Merger Agreement or October 15, 1997, if later.


SECTION 2.2 Irrevocable Proxy. Each Stockholder hereby irrevocably
----------------- constitutes and appoints Purchaser and its officers, and each of them, as its attorney and proxy pursuant to the provisions of Section 212(c) of the Delaware General Corporation Law ("DGCL"), with full power of substitution, to vote and otherwise act (by written consent or otherwise) with respect to the Shares which such Stockholder is entitled to vote at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise, on, and only on, the matters described in Section 2.1 and to execute and deliver any and all consents, instruments or other agreements or documents in order to take any and all such actions in connection with or in furtherance of the obligations of such Stockholder set forth in this Agreement and each of the transactions contemplated by this Agreement or the Merger Agreement. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE, SUBJECT TO SECTION 1.5, AND COUPLED WITH AN INTEREST. Each Stockholder hereby revokes all other proxies and powers of attorney with respect to such Stockholder's Shares that it may have heretofore appointed or granted, and no subsequent proxy or power of attorney shall be given or written consent executed (and if given or executed, shall not be effective) by such Stockholder with respect thereto. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of a Stockholder and any obligation of such Stockholder under this Agreement shall be binding upon the heirs, personal representatives, successors and assigns of such Stockholder.


ARTICLE III


AGREEMENT TO TENDER


SECTION 3.1 Agreement to Tender. Each Stockholder hereby agrees that,
------------------- if Purchaser or Merger Sub commences the Offer, such Stockholder will tender, or cause to be tendered, all of the Shares then beneficially owned by such Stockholder to Purchaser or Merger Sub, as applicable, as soon as practicable (and in any event within five business days) after the commencement of the Offer in accordance with the terms and conditions of the Offer. Each Stockholder further agrees that it will not withdraw such tendered Shares unless the Offer is terminated by Purchaser or Merger Sub, as applicable. Each Stockholder will be entitled, upon consummation of the Offer subject to and in accordance with the Offer's terms and conditions, to receive an amount equal to the Merger Consideration with respect to its tendered Shares.


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ARTICLE IV


REPRESENTATIONS AND WARRANTI ...