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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
FORM 8-K
____________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest
event reported): July 23, 2024
____________________________
Allegro MicroSystems, Inc.
(Exact name of Registrant as Specified in Its
Charter)
____________________________
Delaware |
001-39675 |
46-2405937 |
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number) |
(IRS Employer
Identification No.)
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955 Perimeter Road |
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Manchester, New Hampshire |
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03103 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number,
Including Area Code: (603) 626-2300
(Former Name or Former Address, if Changed Since
Last Report)
____________________________
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
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Trading
Symbol(s) |
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Name of each exchange on which registered |
Common Stock, par value $0.01 per share |
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ALGM |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Share Repurchase Agreement
Pursuant to the terms of a share repurchase agreement (the “Share
Repurchase Agreement”) entered into by and between Allegro MicroSystems, Inc. (the “Company”, “our”, “us”,
“we” or “Allegro”) and Sanken Electric Co., Ltd. (“Sanken”) on July 23, 2024, we have agreed to repurchase
from Sanken in a privately negotiated transaction 38,767,315 shares of our common stock at a price per share equal to the price per share
at which the underwriters will purchase from us shares of our common stock in the public underwritten equity offering that the Company
has separately announced today (the “Equity Offering”). The shares being repurchased by us pursuant to the Share Repurchase
Agreement will be retired. On an as adjusted basis after giving effect to the Equity Offering and the transactions contemplated by the
Share Repurchase Agreement, Sanken will hold approximately 33.2% (or 32.5% if the underwriters’ option to purchase additional shares
of our common stock is exercised in full) of our outstanding common stock.
The repurchase by us of a number of shares of common stock equal to
the number of shares being offered in the Equity Offering (excluding the underwriters’ option to purchase additional shares of our
common stock) is expected to occur one business day after the closing of the Equity Offering (the “First Closing”). We intend
to fund the First Closing with the net proceeds of the Equity Offering (excluding any net proceeds from the exercise of the underwriters’
option to purchase additional shares of our common stock). The repurchase of the remainder of the shares of our common stock that we expect
to repurchase from Sanken is expected to occur substantially concurrently with the receipt by us of the proceeds from the exercise of
the underwriters’ option to purchase additional shares of our common stock or borrowings under the Credit Agreement (as defined
below) or, otherwise, on another date of our choosing after the closing of the Equity Offering (the “Second Closing”). We
intend to fund the Second Closing with any net proceeds from the exercise of the underwriters’ option to purchase additional shares
of our common stock, cash on hand or additional borrowings under the Credit Agreement.
The First Closing of the share repurchase is conditioned upon the closing
of the Equity Offering and certain other conditions, and the Second Closing of the share repurchase is conditioned upon the receipt by
us of net proceeds of no less than $300 million from incremental term loans under the Credit Agreement and certain other conditions, but
the Equity Offering is not conditioned on the consummation of the share repurchase. We cannot provide any assurance that the share repurchase
will occur on the terms described herein, or at all. The description of, and other information in this Current Report on Form 8-K regarding,
the share repurchase are included for informational purposes only. Nothing in this Current Report on Form 8-K should be construed as an
offer (i) to sell, or the solicitation of an offer to purchase, any of our common stock that we repurchase, or (ii) to repurchase, or
the solicitation of an offer to sell, any of our common stock.
The Share Repurchase Agreement and related arrangements and transactions
were reviewed and approved by our Audit Committee, which is charged with reviewing related party transactions, and is composed of three
independent directors who are not affiliated with Sanken. Upon the recommendation by the Audit Committee, the disinterested members of
our board of directors (the “Board”) also approved such transactions.
Pursuant to the terms of the Share Repurchase Agreement, Sanken has
agreed to reimburse us for the expenses incurred by us in connection with the transactions contemplated by the Share Repurchase Agreement,
including the Equity Offering and the amendments to the Credit Agreement (as defined below).
Pursuant to the terms of the Share Repurchase Agreement, Sanken has
agreed that, without our prior written consent, Sanken will not, from the date of the Share Repurchase Agreement until the date that is
14 months following the First Closing of the share repurchase (the “Lock-Up Period”), directly or indirectly, offer, sell,
contract to sell, pledge, grant any option to purchase, lend or otherwise transfer or dispose of, or publicly disclose the intention to
make any offer, sale, pledge or disposition of any shares of our common stock, or any options or warrants to purchase any shares of our
common stock, or any securities convertible into, exchangeable for, or that represent the right to receive, shares of our common stock,
engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or
entry into, any put or call option, or combination thereof, forward, swap or other derivative transaction or instrument) which is designed
to or which could reasonably be expected to lead to or result in a sale, loan, pledge or other disposition or transfer of all or a portion
of the economic consequences of ownership of our common stock or any securities convertible into or exercisable or exchangeable for shares
of our common stock, in each case other than (i) the shares to be sold pursuant to the terms of the Share Repurchase Agreement to us,
(ii) any other shares of our common stock that may be sold by Sanken to us, (iii) shares of our common stock transferred to another corporation,
partnership, limited liability company, trust or other business entity that is a direct or indirect controlled affiliate (as defined under
Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of Sanken; provided that Sanken will cause
any such controlled affiliate that obtains any shares of our common stock to be bound by the terms of the lock-up; and (iv) Sanken may
enter into a written plan meeting the requirements of Rule 10b5-l under the Exchange Act for the transfer of shares of our common stock
that does not in any case provide for the transfer of shares of our common stock during the Lock-up Period; provided that any voluntary
or required public filing, report or disclosure regarding such Rule 10b5-1 Plan shall include a statement to the effect that no transfers
may be made pursuant to such trading plan during the Lock-Up Period.
The foregoing description of the Share Repurchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the complete text of the Share Repurchase Agreement, a copy of
which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Second Amended and Restated Stockholder Agreement
In connection with the Share Repurchase Agreement, we entered into
that certain Second Amended and Restated Stockholders Agreement, by and between us and Sanken (the “Second Amended and Restated
Stockholders Agreement”), which amended and restated that certain Amended and Restated Stockholders Agreement, dated as of June
16, 2022 by and among us, Sanken and OEP SKNA, L.P. (“OEP”) (the “Stockholders Agreement”) in its entirety. The
Second Amended and Restated Stockholders Agreement will become effective in accordance with its terms on July 29, 2024. The Second Amended
and Restated Stockholders Agreement removed OEP as a party to the Stockholders Agreement and amended certain rights and obligations of
the Company and Sanken.
The Second Amended and Restated Stockholders Agreement provides that
Sanken is required to vote in favor of all designees to our Board nominated by our Nominating and Corporate Governance Committee and,
if requested by our Nominating and Corporate Governance Committee, vote all outstanding shares of our common stock held by Sanken in favor
of any matter which our Board determines is advisable and in the best interests of our stockholders and vote against any matter that would
reasonably be expected to oppose such matter.
Additionally, Sanken is entitled to nominate two directors to the Board
as long as Sanken and its affiliates beneficially own, directly or indirectly, at least 20% of our outstanding shares of common stock
and one director to the Board as long as Sanken and its affiliates beneficially own, directly or indirectly, at least 10% of our outstanding
shares of common stock. In each case, Sanken is also entitled to designate one Sanken observer to the Board to attend meetings of the
Board in a non-voting, observer capacity, subject to certain exceptions. If at any point Sanken and its affiliates beneficially own, directly
or indirectly, less than 10% of our outstanding shares of common stock, Sanken will not be entitled to nominate a director to the Board,
nor will Sanken be entitled to designate a Sanken observer to the Board. Consistent with the Stockholders Agreement, if the number of
directors that Sanken has the right to designate to our Board is decreased (each such occurrence, a “Decrease in Designation Rights”),
Sanken will use its reasonable best efforts to cause each of the Sanken directors that Sanken ceases to have the right to designate to
serve as a Sanken director to offer to tender his or her resignation, and each of such director so tendering a resignation shall resign
within thirty days from the date that Sanken incurs a Decrease in Designation Rights.
The Second Amended and Restated Stockholders Agreement also
provides our Nominating and Corporate Governance Committee with increased board designation rights and provides us a right of first
refusal to purchase from Sanken any shares of our outstanding shares of common stock that Sanken proposes to sell or transfer,
subject to certain exceptions.
The foregoing description of the Second Amended and Restated Stockholders
Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Second Amended and
Restated Stockholders Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated herein by reference.
For information regarding material relationships between us and Sanken,
see “Certain Relationships and Related Person Transactions” in our 2024 Notice of Annual Meeting and Proxy Statement, which
is incorporated by reference herein.
Item 2.02 Results of Operations and Financial Condition.
On July 23, 2024, the Company filed a preliminary prospectus supplement
(the “Preliminary Prospectus Supplement”) in connection with the Equity Offering that contained preliminary financial results
for the quarter ended June 28, 2024. The full text of the preliminary results is furnished as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
The information in this Item 2.02 (including Exhibit 99.1) shall not
be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section,
nor shall it be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the
“Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 23, 2024, Kojiro (Koji) Hatano notified our Board of his decision
to resign from the Board, effective as of the First Closing of the share repurchase. Mr. Hatano’s resignation was a result of Sanken’s
anticipated reduction in ownership of our common stock as a result of the transactions contemplated by the Share Repurchase Agreement
and pursuant to the Second Amended and Restated Stockholders Agreement, and not the result of any disagreement between Mr. Hatano and
the Company or its management on any matter relating to the Company’s operations, policies or practices.
Item 7.01. Regulation FD Disclosure.
On July 23, 2024, the Company announced in the
Preliminary Prospectus Supplement that it anticipates amending its existing credit agreement (the “Credit Agreement”), dated
as of June 21, 2023 and amended as of October 31, 2023, by and among the Company, Morgan Stanley Senior Funding, Inc., as administrative
agent and collateral agent, and each lender from time to time party thereto, to (i) incur new incremental term loans to finance a portion
of the repurchase of shares of our common stock from Sanken pursuant to the terms of the Share Repurchase Agreement, (ii) increase the
amount of revolving commitments available under the Credit Agreement by $32,000,000, (iii) permit under the Credit Agreement the repurchase
contemplated by the Share Repurchase Agreement and (iv) make certain other changes.
There can be no assurance that the incremental
term loans or the increase to revolving commitments under the Credit Agreement (or the aforementioned amendments) will be completed on
the terms described herein or at all.
The information in this Item 7.01 shall not be deemed “filed”
for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, nor shall it be deemed to be
incorporated by reference into any filing of the Company under the Securities Act, or the Exchange Act, except as expressly set forth
by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act, and Section 21E of
the Exchange Act. All statements, other than statements of historical facts, contained in this Current Report on Form 8-K including statements
regarding the Share Repurchase Agreement, the Second Amended and Restated Stockholders Agreement, the Credit Agreement, future results
of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations,
including, among others, statements regarding the liquidity, growth and profitability strategies and factors affecting our business, are
forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause
our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed
or implied by the forward-looking statements.
Without limiting the foregoing, in some cases,
you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,”
“expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “would,” “contemplate,” “believe,” “estimate,”
“predict,” “potential,” “seek,” or “continue” or the negative of these terms or other
similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future
results, performance or achievements, and one should avoid placing undue reliance on such statements.
Forward-looking statements are based on our management’s
current expectations, beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not
prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and
assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various
factors, including, but not limited to, those identified in Part II, Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the
year ended March 29, 2024, filed with the U.S. Securities and Exchange Commission on May 23, 2024. These risks and uncertainties include,
but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market
share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities
and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions
or customer demand; shifts in our product mix, customer mix or channel mix, which could negatively impact our gross margin; the cyclical
nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market
or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business;
our ability to compensate for decreases in average selling prices of our products and increases in input costs; our ability to manage
any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our
products; our ability to accurately predict our quarterly net sales and operating results and meet the expectations of investors; our
dependence on manufacturing operations in the Philippines; our reliance on distributors to generate sales; events beyond our control impacting
us, our key suppliers or our manufacturing partners; our ability to develop new product features or new products in a timely and cost-effective
manner; our ability to manage growth; any slowdown in
the growth of our end markets; the loss of one
or more significant customers; our ability to meet customers’ quality requirements; uncertainties related to the design win process
and our ability to recover design and development expenses and to generate timely or sufficient net sales or margins; changes in government
trade policies, including the imposition of export restrictions and tariffs; our exposures to warranty claims, product liability claims
and product recalls; our dependence on international customers and operations; the availability of rebates, tax credits and other financial
incentives on end-user demands for certain products; risks, liabilities, costs and obligations related to governmental regulations and
other legal obligations, including export/trade control, privacy, data protection, information security, cybersecurity, consumer protection,
environmental and occupational health and safety, antitrust, anti-corruption and anti-bribery, product safety, environmental protection,
employment matters and tax; the volatility of currency exchange rates; our ability to raise capital to support our growth strategy; our
indebtedness may limit our flexibility to operate our business; our ability to effectively manage our growth and to retain key and highly
skilled personnel; our ability to protect our proprietary technology and inventions through patents or trade secrets; our ability to commercialize
our products without infringing third-party intellectual property rights; disruptions or breaches of our information technology systems
or confidential information or those of our third-party service providers; our principal stockholders has substantial control over us;
anti-takeover provisions in our organizational documents and under the General Corporation Law of the State of Delaware; any failure to
design, implement or maintain effective internal control over financial reporting; changes in tax rates or the adoption of new tax legislation;
the negative impacts of sustained inflation on our business; the physical, transition and litigation risks presented by climate change;
and other events beyond our control. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from
time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Current Report on Form 8-K
and the documents that we reference completely and with the understanding that our actual future results may be materially different from
what we expect. We qualify all of our forward-looking statements by these cautionary statements. All forward-looking statements speak
only as of the date of this Current Report on Form 8-K, and except as required by applicable law, we do not plan to publicly update or
revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise.
This Current Report on Form 8-K (including Exhibit
99.1) contains certain non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures are provided in addition
to, and not as a substitute for or superior to measures of, financial performance prepared in accordance with GAAP. There are a number
of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies
may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce
the usefulness of the presented non-GAAP financial measures as tools for comparison.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ALLEGRO MICROSYSTEMS, INC. |
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Date: July 23, 2024 |
By: |
/s/ Derek P. D’Antilio |
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Derek P. D’Antilio |
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Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 10.1
SHARE REPURCHASE AGREEMENT
This Share Repurchase Agreement
(this “Agreement”) is entered into as of July 23, 2024, between Allegro MicroSystems, Inc., a Delaware corporation
(the “Company”) and Sanken Electric Co., Ltd., a Japanese corporation (“Seller”). Capitalized terms
used and not otherwise defined shall have the meanings ascribed to such terms in Section 15.
WHEREAS, as of June
28, 2024, there were outstanding 193,836,578 shares of common stock, $0.01 par value per share, of the Company (“Common Shares”);
WHEREAS, as of the
date hereof, Seller is the record and beneficial owner of 98,500,097 Common Shares, representing approximately 51% of the outstanding
Common Shares as of June 28, 2024;
WHEREAS, Seller desires
to sell to the Company, and the Company desires to purchase from Seller, 38,767,315 Common Shares (the “Repurchased Shares”),
representing 20% of the outstanding Common Shares as of June 28, 2024 on the terms and conditions set forth herein;
WHEREAS, the audit
committee (the “Audit Committee”) of the board of directors of the Company (the “Company Board”),
consisting solely of independent and disinterested directors of the Company Board, has evaluated the transactions contemplated by this
Agreement and the related Financing Transactions (as defined below) pursuant to the Company’s related person transaction policy
and the Audit Committee’s charter;
WHEREAS, the Audit
Committee has unanimously (i) determined that this Agreement and the transactions contemplated hereby, including the First Repurchase
(as defined below) and the Second Repurchase (as defined below), are advisable, fair to, and in the best interests of, the Company and
the holders of Common Shares, and (ii) approved this Agreement, the execution and delivery by the Company of this Agreement, the performance
by the Company of the covenants and agreements contained herein and the consummation of the First Repurchase and the Second Repurchase
and the other transactions contemplated hereby and thereby upon the terms and subject to the conditions contained herein;
WHEREAS, the Company
Board (acting upon the recommendation of the Audit Committee and without the vote of the interested members of the Board) has (i) determined
that this Agreement and the transactions contemplated hereby, including the First Repurchase, the Second Repurchase and the related Financing
Transactions are advisable, fair to, and in the best interests of, the Company and the holders of Common Shares, (ii) declared this Agreement
and the transactions contemplated hereby and the related Financing Transactions advisable and (iii) approved this Agreement, the execution
and delivery by the Company of this Agreement, the performance by the Company of the covenants and agreements contained herein and the
consummation of the First Repurchase, the Second Repurchase and related Financing Transactions and the other transactions contemplated
hereby and thereby upon the terms and subject to the conditions contained herein;
WHEREAS, in order to
finance the purchase of a portion of the Repurchased Shares contemplated by this Agreement (the “First Repurchase”),
the Company will conduct an underwritten offering of newly issued Common Shares (the “Newly Issued Shares”) registered
with the U.S. Securities and Exchange Commission (the “Registered Equity Offering”) prior to the First Closing (as
defined below);
WHEREAS, in order to
finance the subsequent purchase of the remaining Repurchased Shares (the “Second Repurchase” and together with the
First Repurchase, the “Repurchase”), the Company may incur incremental term loans under (and in accordance with the
terms of) its existing credit facility (the “Incremental Term Loans” and, together with the Registered Equity Offering,
the “Financing Transactions”) prior to the Second Closing (as defined below); and
WHEREAS, concurrently
with the execution of this Agreement, and as a condition and inducement of the willingness of the Company to enter into this Agreement,
the Company and Seller have entered into the Second Amended and Restated Stockholders Agreement of the Company in the form attached hereto
as Exhibit A (the “Stockholders Agreement”), and Seller has delivered a fully executed copy of the Stockholders
Agreement to the Company, to be automatically effective as of and contingent upon the First Closing.
NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. Purchase
and Sale of the Repurchased Shares. Upon the terms and subject to the conditions set forth in this Agreement:
(a) at the closing
of the First Repurchase (the “First Closing”), the Company hereby agrees to purchase from Seller, and Seller hereby
agrees to sell, convey, assign and transfer to the Company, all right, title and interest in and to the First Closing Repurchased Shares,
free and clear of any Liens and any other limitations or restrictions; and
(b) at
the closing of the Second Repurchase (the “Second Closing”), the Company hereby agrees to purchase from Seller, and
Seller hereby agrees to sell, convey, assign and transfer to the Company, all right, title and interest in and to the Second Closing Repurchased
Shares, free and clear of any Liens and any other limitations or restrictions.
2. Purchase
Price.
(a) In
consideration for the First Closing Repurchased Shares, at the First Closing, the Company shall deliver to Seller, in cash (in United
States dollars), an aggregate amount (the “First Closing Purchase Price”) equal to (x) the number of First Closing
Repurchased Shares, multiplied by (y) the Net Public Offering Price Per Share. The “Net Public Offering Price Per Share”
means (i) the initial offering price to the public per Newly Issued Share in the Registered Equity Offering as set forth on the cover
page of the final prospectus supplement for the
Registered Equity Offering, minus
(ii) the amount of the underwriting discount to the underwriters in the Registered Equity Offering per Newly Issued Share.
(b) In
consideration for the Second Closing Repurchased Shares, the Company shall deliver to Seller, in cash (in United States dollars), an aggregate
amount (the “Second Closing Purchase Price”) equal to (x) the number of Second Closing Repurchased Shares, multiplied
by (y) the Net Public Offering Price Per Share.
3. Transaction
Costs and Expenses. Seller hereby agrees to bear (and to the extent requested by the Company and not netted pursuant to Section
4, promptly reimburse the Company for) all costs and expenses incurred and documented by the Company in connection with the transactions
contemplated by this Agreement and the Financing Transactions, including the consideration, evaluation, negotiation and consummation of
such transactions, and including the Facilitation Fee, commissions and discounts (to the extent not taken into account in the determination
of the Net Public Offering Price Per Share), disbursements, costs and transaction expenses (collectively, “Transaction Costs
and Expenses”). For the avoidance of doubt and without limitation, Transaction Costs and Expenses shall include all registration
and filing fees, all printing costs, all fees and expenses of the Company’s transfer agent, Computershare Trust Company, N.A. (the
“Transfer Agent”), all sales, use, documentary, registration, transfer, deed taxes, conveyance fees, recording charges
and similar taxes, fees and charges (including, all excise taxes (including under Section 4501 of the Code) imposed on or with respect
to the Repurchase and the Financing Transactions (as reasonably determined by the Company)) and all fees and expenses of counsel, accountants,
financial advisors or other professional advisors of the Company. In the event that any payment by Seller to the Company pursuant to this
Section 3 is subject to any deduction or withholding of any tax, Seller agrees to pay such additional amounts to the Company as
will result, after such deduction and withholding (including any deduction or withholding with respect to the payment of such additional
amounts), in the receipt by the Company of such amounts as the Company would otherwise have been entitled to receive under this Section
3 in the absence of any such withholding or deduction.
4. Closing.
The First Closing and the Second Closing shall take place at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York,
New York 10017 or remotely by the exchange of signature pages for executed documents, as promptly as practicable (but no earlier than
one Business Day, in the case of the First Closing, and no later than one Business Day, in the case of the Second Closing), in each case
after satisfaction or, to the extent permissible, waiver by the party or parties entitled to the benefit of the conditions set forth in
Section 10 applicable to such Closing (other than conditions that by their nature are to be satisfied at such Closing, but subject
to the satisfaction or, to the extent permissible, waiver of those conditions at such Closing), or at such other time or place as the
Company and Seller may agree in writing. The date on which the First Closing occurs is referred to as the “First Closing Date”
and the date on which the Second Closing occurs is referred to as the “Second Closing Date”.
(a) At
the First Closing, Seller shall deliver to the Company:
(i) materials
required to be delivered to effectuate the delivery by Seller on the systems of the Transfer Agent of the First Closing Repurchased Shares
to the Company, which shall in no event include a requirement for a medallion signature guarantee;
(ii) the
certificate required to be delivered pursuant to Section 10(a)(iv); and
(iii) a
duly executed IRS Form W-8BEN-E for Seller.
(b) At
the First Closing, the Company shall deliver to Seller:
(i) by
wire transfer(s), to an account or accounts designated by Seller prior to the First Closing (the “Seller Account”),
immediately available funds in United States dollars in an aggregate amount equal to the First Closing Purchase Price, net of Transaction
Costs and Expenses (to the extent not previously reimbursed by Seller), as set forth on the First Closing Statement (as defined below);
and
(ii) the
certificate required to be delivered pursuant to Section 10(b)(v).
(c) At
the Second Closing, Seller shall deliver to the Company:
(i) materials
required to be delivered to effectuate the delivery by Seller on the systems of the Transfer Agent of the Second Closing Repurchased Shares
to the Company, which shall in no event include a requirement for a medallion signature guarantee; and
(ii) the
certificate required to be delivered pursuant to Section 10(c)(v).
(d) At
the Second Closing, the Company shall deliver to Seller:
(i) by
wire transfer(s), to the Seller Account, immediately available funds in United States dollars in an aggregate amount equal to the Second
Closing Purchase Price, net of Transaction Costs and Expenses (to the extent not previously reimbursed by Seller or netted against the
First Closing Purchase Price pursuant to Section 4(b)(i)), as set forth on the Second Closing Statement (as defined below); and
(ii) the
certificate required to be delivered pursuant to Section 10(d)(iv).
5. Closing
Statements.
(a) Schedule
I sets forth an illustrative calculation of the First Closing Purchase Price, the Second Closing Purchase Price and Transaction Costs
and
Expenses (the “Sample Closing
Statement”). For the avoidance of doubt, the parties acknowledge and agree that the Sample Closing Statement is illustrative
only, provided as an example only and any dollar amounts or calculations included in the Sample Closing Statement are not final or binding.
(b) At
least one business day prior to the First Closing, the Company shall provide Seller with a statement, in a format consistent with the
Sample Closing Statement, setting forth the Company’s determination of the First Closing Purchase Price and the Transaction Costs
and Expenses to be netted against the First Closing Purchase Price (the “Draft First Closing Statement”), which Draft
First Closing Statement shall be further updated and provided by the Company to Seller when the Net Public Offering Price Per Share is
available (the “First Closing Statement”).
(c) At
least one business day prior to the Second Closing, the Company shall provide Seller with a statement, in a format consistent with the
Sample Closing Statement, setting forth the Company’s determination of the Second Closing Purchase Price and Transaction Costs and
Expenses to be netted against the Second Closing Purchase Price (the “Second Closing Statement”).
6. Representations
and Warranties of Seller. Seller hereby represents and warrants to the Company as of the date hereof, as of the First Closing Date
and as of the Second Closing Date as follows:
(a) Organization
and Qualification. Seller is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization. Seller has all requisite corporate or other organizational power and authority to conduct its business as presently conducted
and, except as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Seller’s
ability to perform its obligations hereunder or under any Transaction Document, is qualified to do business and is in good standing as
a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification.
(b) Authorization.
The execution, delivery and performance by Seller of this Agreement and each other Transaction Document and the consummation of the transactions
contemplated hereby and thereby are within Seller’s corporate powers and have been duly authorized by all necessary corporate or
other organizational action on the part of Seller. This Agreement has been duly executed and delivered by Seller and each other Transaction
Document will be duly executed and delivered by Seller. This Agreement constitutes the valid and legally binding obligation of Seller,
and in the case of each other Transaction Document, will constitute the valid and legally binding obligation of Seller, in each case enforceable
against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other laws affecting creditors’ rights generally and general principles of equity (the “Enforceability Exceptions”).
No other organizational act or proceeding on the
part of Seller is necessary to authorize
this Agreement or any Transaction Document to be executed, delivered and performed by Seller or the consummation of the transactions contemplated
hereby and thereby.
(c) Ownership
of Repurchased Shares. The Repurchased Shares are duly authorized and validly issued, and Seller is the sole record holder and sole
beneficial owner of, and has good and marketable title to, the Repurchased Shares, free and clear of any Lien or any other limitation
or restriction (including any restriction on the right to vote (other than the Stockholders Agreement), sell or otherwise dispose of the
Repurchased Shares), and Seller will transfer and deliver to the Company at the applicable Closing valid title to the First Closing Repurchased
Shares or Second Closing Repurchase Shares, as applicable, free and clear of any Lien or any other limitation or restriction. None of
the First Closing Repurchased Shares or Second Closing Repurchase Shares, as applicable, are subject to any proxy, voting trust or other
agreement (other than the Stockholders Agreement) or arrangement with respect to the voting of such First Closing Repurchased Shares or
Second Closing Repurchase Shares, as applicable.
(d) Noncontravention.
Neither the execution, delivery and performance by Seller of this Agreement or each other Transaction Document, nor the consummation by
Seller of the transactions contemplated hereby or thereby will, or would reasonably be expected to (i) conflict with or result in any
breach, violation or infringement of any provision of the respective articles of incorporation or bylaws (or similar governing documents)
of Seller, (ii) conflict with, result in a breach of or constitute (with or without due notice or lapse of time or both) a default (or
give rise to the creation of any Lien or any right of termination, amendment, cancellation or acceleration) under any contract, indenture,
lease, sublease, loan agreement or other agreement to which Seller is a party or by which any of Seller’s assets are bound, (iii)
violate any Applicable Law or (iv) result in the creation or imposition of any Lien upon the Repurchased Shares, except, in the case of
clause (ii) or clause (iii), as would not reasonably be excepted to have, individually or in the aggregate, a material adverse effect
on Seller’s ability to perform its obligations hereunder or under any Transaction Document.
(e) Litigation.
To Seller’s knowledge, there is no action, suit, proceeding or investigation pending, or threatened, against Seller which (i) questions
the validity of this Agreement, any Transaction Document or the right of Seller to enter into this Agreement or any Transaction Document
or (ii) may, either individually or the aggregate, have a material adverse effect on Seller’s ability to perform its obligations
hereunder or under any Transaction Document.
7. Representations
and Warranties of the Company. The Company hereby represents and warrants to Seller as of the date hereof, as of the First Closing
Date and as of the Second Closing Date as follows:
(a) Organization
and Qualification. The Company is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction
of organization. The Company has all
requisite corporate or other organizational power and authority to conduct its business as presently conducted and, except as would not
reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company’s ability to perform
its obligations hereunder or under any Transaction Document, is qualified to do business and is in good standing as a foreign corporation
or other legal entity in each jurisdiction where the conduct of its business requires such qualification.
(b) Authorization.
The execution, delivery and performance by the Company of this Agreement and each other Transaction Document and the consummation of the
transactions contemplated hereby and thereby are within the Company’s corporate powers and have been duly authorized by all necessary
corporate or other organizational action on the part of the Company. This Agreement has been duly executed and delivered by the Company,
and each other Transaction Document will be duly executed and delivered by the Company. This Agreement constitutes the valid and legally
binding obligation of the Company, and in the case of each other Transaction Document, will constitute the valid and legally binding obligation
of the Company, enforceable against it in accordance with its terms, subject to the Enforceability Exceptions. No other organizational
act or proceeding on the part of the Company is necessary to authorize this Agreement or any Transaction Document to be executed, delivered
and performed by the Company or the consummation of the transactions contemplated hereby and thereby.
(c) Noncontravention.
Neither the execution, delivery and performance by the Company of this Agreement or each other Transaction Document, nor the consummation
by the Company of the transactions contemplated hereby or thereby will, or would reasonably be expected to (i) conflict with or result
in any breach, violation or infringement of any provision of the respective articles of incorporation or bylaws (or similar governing
documents) of the Company or (ii) violate any Applicable Law, except, in the case of clause (ii), as would not reasonably be excepted
to have, individually or in the aggregate, a material adverse effect on the Company’s ability to perform its obligations hereunder
or under any Transaction Document.
(d) Litigation.
To the Company’s knowledge, there is no action, suit, proceeding or investigation pending, or threatened, against the Company which
(i) questions the validity of this Agreement, any Transaction Document or the right of the Company to enter into this Agreement or any
Transaction Document or (ii) may, either individually or the aggregate, have a material adverse effect on the Company’s ability
to perform its obligations hereunder or under any Transaction Document.
8. Lockup.
Seller agrees that, without the prior written consent of the Company, Seller will not, from the date of this Agreement until the date
that is fourteen (14) months following the First Closing Date (the “Lock- up Period”), directly or indirectly, offer,
sell, contract to sell, pledge, grant any option to purchase, lend or otherwise transfer or dispose
of, or publicly disclose the intention to make
any offer, sale, pledge or disposition of any Common Shares, or any options or warrants to purchase any Common Shares, or any securities
convertible into, exchangeable for, or that represent the right to receive, Common Shares, engage in any hedging or other transaction
or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination
thereof, forward, swap or other derivative transaction or instrument) which is designed to or which could reasonably be expected to lead
to or result in a sale, loan, pledge or other disposition or transfer of all or a portion of the economic consequences of ownership of
the Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, in each case other than (i) the
Repurchased Shares to be sold hereunder solely to the Company; (ii) any other Common Shares that may be sold by Seller solely to the Company;
(iii) Common Shares transferred to another corporation, partnership, limited liability company, trust or other business entity that is
a direct or indirect controlled affiliate (as defined under Rule 12b-2 of the Exchange Act) of Seller; provided that Seller shall cause
any such controlled affiliate that obtains any Common Shares to be bound by the terms of this Agreement to the fullest extent as if such
controlled affiliate were Seller hereunder; and (iv) Seller may enter into a written plan meeting the requirements of Rule 10b5-l under
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, for the transfer
of Common Shares that does not in any case provide for the transfer of Common Shares during the Lock-up Period; provided that any voluntary
or required public filing, report or disclosure regarding such Rule 10b5-1 Plan shall include a statement to the effect that no transfers
may be made pursuant to such trading plan during the Lock-Up Period.
9. Seller
Waiver. Seller hereby waives, and agrees to refrain from exercising, any and all rights Seller may have through the Second Closing
Date under the Amended and Restated Registration Rights Agreement, dated as of November 2, 2020, by and among the Company, Seller and
OEP SKNA, L.P.
10. Conditions
to Closing.
(a)
Conditions to Obligations of the Company (First Closing). The obligations of the Company to consummate the First Closing are subject
to the satisfaction, or waiver by the Company, of the following conditions:
(i) the
Registered Equity Offering shall have been consummated;
(ii) the
representations and warranties of Seller set forth in Section 6 shall be true and correct in all material respects as of the date
hereof and as of the First Closing Date, as if made at and as of such date, except (A) with respect to representations and warranties
which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of
such date, and (B) where the failure of such representations and warranties to be true and correct would not reasonably be expected, individually
or in the aggregate, to materially impair Seller’s ability to perform or comply with its obligations under this
Agreement or consummate the transactions
contemplated hereby; provided, that the representations and warranties set forth in Section 6(c) shall be true and correct in all
respects;
(iii) the
covenants and agreements of Seller to be performed on or before the First Closing Date in accordance with this Agreement shall have been
performed in all material respects; and
(iv) the
Company shall have received a certificate, dated as of the First Closing Date and signed on behalf of Seller by an executive officer of
Seller, stating that the conditions specified in Section 10(a)(ii) and Section 10(a)(iii) have been satisfied.
(b) Conditions
to Obligations of Seller (First Closing). The obligations of Seller to consummate the First Closing are subject to the satisfaction,
or waiver by Seller, of the following conditions:
(i) the
Registered Equity Offering shall have been consummated;
(ii) Seller’s
ownership of 98,500,097 Common Shares represents less than 50% of the outstanding Common Shares on the date of the First Closing;
(iii) the
representations and warranties of the Company set forth in Section 7 shall be true and correct in all material respects as of the
date hereof and as of the First Closing Date, as if made at and as of such date, except (A) with respect to representations and warranties
which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of
such date, and (B) where the failure of such representations and warranties to be true and correct would not reasonably be expected, individually
or in the aggregate, to materially impair the Company’s ability to perform or comply with its obligations under this Agreement or
consummate the transactions contemplated hereby;
(iv) the
covenants and agreements of the Company to be performed on or before the First Closing Date in accordance with this Agreement shall have
been performed in all material respects; and
(v) Seller
shall have received a certificate, dated as of the First Closing Date and signed on behalf of the Company by an executive officer of the
Company, stating that the conditions specified in Sections 10(b)(i)-(iv) have been satisfied.
(c) Conditions
to Obligations of the Company (Second Closing). The obligations of the Company to consummate the Second Closing are subject to the
satisfaction, or waiver by the Company, of the following conditions:
(i) the
First Closing shall have been consummated;
(ii) the
Incremental Term Loans shall have been consummated and shall have raised net proceeds of no less than $300,000,000;
(iii) the
representations and warranties of Seller set forth in Section 6 shall be true and correct in all material respects as of the date
hereof and as of the Second Closing Date, as if made at and as of such date, except (A) with respect to representations and warranties
which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of
such date, and (B) where the failure of such representations and warranties to be true and correct would not reasonably be expected, individually
or in the aggregate, to materially impair Seller’s ability to perform or comply with its obligations under this Agreement or consummate
the transactions contemplated hereby; provided that the representations and warranties set forth in Section 6(c) shall be
true and correct in all respects;
(iv) the
covenants and agreements of Seller to be performed on or before the Second Closing Date in accordance with this Agreement shall have been
performed in all material respects; and
(v) the
Company shall have received a certificate, dated as of the Second Closing Date and signed on behalf of Seller by an executive officer
of Seller, stating that the conditions specified in Section 10(c)(iii) and Section 10(c)(iv) have been satisfied.
(d) Conditions
to Obligations of Seller (Second Closing). The obligations of Seller to consummate the Second Closing are subject to the satisfaction,
or waiver by Seller, of the following conditions:
(i) the
First Closing shall have been consummated;
(ii) the
representations and warranties of the Company set forth in Section 7 shall be true and correct in all material respects as of the
date hereof and as of the Second Closing Date, as if made at and as of such date, except (A) with respect to representations and warranties
which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of
such date, and (B) where the failure of such representations and warranties to be true and correct would not reasonably be expected, individually
or in the aggregate, to materially impair the Company’s ability to perform or comply with its obligations under this Agreement or
consummate the transactions contemplated hereby;
(iii) the
covenants and agreements of the Company to be performed on or before the Second Closing Date in accordance with this Agreement shall have
been performed in all material respects; and
(iv) Seller
shall have received a certificate, dated as of the Second Closing Date and signed on behalf of the Company by an executive officer of
the Company, stating that the conditions specified in Section 10(d)(ii) and Section 10(d)(iii) have been satisfied.
11. Termination.
(a) This
Agreement may be terminated at any time by mutual written agreement of the Company and Seller;
(b) Seller
may terminate this Agreement by giving written notice to the Company before the completion of the First Closing or the Second Closing
if the conditions under Section 10(b) or 10(d), as applicable, are not satisfied by September 30, 2024 and Seller has not
waived such condition(s) in writing; and
(c)
the Company may terminate this Agreement by giving written notice to the Seller before the completion of the First Closing or the Second
Closing if the conditions under Section 10(a) or 10(c), as applicable, are not satisfied by September 30, 2024 and the Company
has not waived such condition(s) in writing.
12. Effect
of Termination. Subject to this Section 12, in the event of any termination of this Agreement pursuant to Section 11,
this Agreement shall be terminated, and there shall be no further liability or obligation hereunder on the part of any party hereto; provided
that nothing contained in this Agreement will relieve any party from liability for any breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement; provided, further, that if the First Closing has been consummated,
(i) the First Closing shall remain consummated and there shall be no obligation hereunder on the part of any party hereto to unwind the
First Closing or otherwise modify the First Repurchase, (ii) Section 8 shall survive such termination and shall remain in effect
and (iii) for the avoidance of doubt, there shall be no further obligation of any party hereunder with respect to consummating the Second
Closing.
13. Certain
Tax Matters.
(a) Intended
U.S. Tax Treatment. The parties acknowledge and agree that, for U.S. federal income tax purposes and assuming compliance by Seller
with Section 13(b), (i) the Repurchase is intended to constitute a distribution in full payment in exchange for the Repurchased
Shares within the meaning of Section 302(a) of the Code (a “Redemption Distribution”), and not as a distribution of
property to which Section 301 of the Code applies pursuant to Section 302(d) of the Code, and (ii) regardless of whether the Transaction
Costs and Expenses are netted against the amount paid by the Company to Seller pursuant to Section 4(b) or Section 4(d)
or are separately reimbursed by Seller pursuant to Section 3, the Transaction Costs and Expenses shall be treated as taken into
account in the determination of, and to the extent reimbursed by Seller, treated as adjustments to, the aggregate amount paid by the Company
to Seller as a Redemption Distribution, and not as a reimbursement or any other type of payment ((i) and (ii) collectively,
the “U.S. Intended Tax Treatment”).
The parties agree to file all U.S. federal, state and local tax returns in a manner consistent with the U.S. Intended Tax Treatment and,
unless otherwise required by a final determination, will not take any position inconsistent with the U.S. Intended Tax Treatment for any
U.S. federal, state or local tax purposes.
(b) Seller
U.S. Tax Certificate. Seller agrees that, prior to the First Closing, it shall provide to the Company a certificate, signed by an
authorized officer of Seller and reasonably satisfactory to the Company, establishing that the Repurchase will qualify as a “substantially
disproportionate” redemption distribution within the meaning of Section 302(b)(2) of the Code.
(c) Tax
Withholding. The Company shall be entitled to deduct and withhold from any amounts payable to Seller hereunder any taxes that the
Company is required to so deduct and withhold under Applicable Law; provided that, notwithstanding the foregoing, the Company agrees that,
in accordance with the Intended U.S. Tax Treatment and assuming full compliance by Seller with Section 13(b) and delivery by Seller
of a W-8BEN-E as required by Section 4(a), it will not withhold any U.S. dividend withholding tax with respect to the Repurchase.
The parties agree to use commercially reasonable efforts to cooperate to reduce or eliminate any required deduction or withholding of
tax. Any amount so deducted and withheld by the Company shall be treated for all purposes of this Agreement as having been paid to Seller.
Seller agrees to indemnify and hold harmless the Company on demand for all taxes (including any interest and penalties and including any
U.S. dividend withholding tax) which any taxing authority asserts or determines that the Company was required by Applicable Law to withhold
from any payment to Seller but did not in fact withhold.
14. Miscellaneous.
(a) Survival.
Except as set forth in Section 12, all covenants, representations and warranties made by the parties herein, or in any instrument
or other writing provided for herein, shall survive the execution and delivery of this Agreement, the First Closing, the Second Closing
and the delivery of the Repurchased Shares to the Company.
(b) Notices.
All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic
mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given:
If to the Company:
Allegro MicroSystems, Inc.
955 Perimeter Road
Manchester, New Hampshire, 03103
Attn: Vineet Nargolwala; Sharon Briansky
Email: [***]
With a copy to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Attn: Thomas J. Malone; Michael Davis
Email: [***]
If to Seller:
Sanken Electric Co., Ltd.
3-6-3 Kitano Niiza-Shi Saitama, 352-8666 JAPAN
Attn: Katsumi Kawashima; Masanobu Todoroki
Email: [***]
With a copy to:
Jones Day
1755 Embarcadero Road
Palo Alto, CA 94303
Attn: Jeremy Cleveland
Email: [***]
(c) Successors
and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding on and inure to the benefit of the parties hereto and their
respective successors; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of each other party hereto. No provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.
(d) Governing
Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving
effect to the conflict of law principles thereof. All judicial proceedings brought against any party arising out of or relating to this
Agreement, or any obligations hereunder, shall be brought in any state or federal court having jurisdiction in the State of Delaware.
(e) Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT, EACH TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(f) Entire
Agreement; Amendment. This Agreement and each Transaction Document constitutes the entire agreement between the parties with respect
to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement. Any provision of this Agreement may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
(g) Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner
in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
(h) Counterparts.
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart
hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party
hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other
oral or written agreement or other communication).
(i) Specific
Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled
at law or in equity. Any party seeking an injunction or injunctions to prevent breaches or threatened breaches of this Agreement or to
enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection
with such order or injunction.
(j) Public
Announcements. Other than in connection with the Financing Transactions, the parties hereto agree to consult with each other before
issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except
for any press releases and public statements the making of which may be required by Applicable Law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such public statement prior to such consultation. The parties hereto
agree that the initial press release to be issued with respect to the execution of this Agreement shall be in the form agreed to in advance
by the Company and Seller.
15. Definitions.
“Applicable Law”
means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise),
constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless
expressly specified otherwise.
“Business Day”
means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable
Law to close.
“Closing”
means each of the First Closing and the Second Closing.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Facilitation Fee”
means $35,000,000.
“First Closing Repurchased
Shares” means a number of Common Shares equal to (i) the net proceeds to the Company from the Registered Equity Offering, divided
by (ii) the Net Public Offering Price Per Share, which number of Common Shares shall be designated in writing by the Company to Seller
prior to the First Closing.
“Governmental Authority”
means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department,
court, agency or official, including any political subdivision thereof.
“Lien”
means any mortgage, lien, pledge, charge, security interest, licenses, restrictions on transfer (other than restrictions on transfer arising
under applicable securities laws), encumbrance or other adverse claim of any kind in respect of such property or asset. For the purposes
of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such
property or asset.
“Person”
means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including
a Governmental Authority.
“Second Closing Repurchased
Shares” means the number of Common Shares equal to (i) the Repurchased Shares minus (ii) the First Closing Repurchased
Shares.
“Transaction Documents”
means this Agreement, the Stockholders Agreement and any other agreement, deed of transfer or certificate entered into or delivered in
connection with the consummation of the transactions contemplated by this Agreement.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of
the parties hereto has duly executed this Agreement as of the date first above written.
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ALLEGRO MICROSYSTEMS, INC. |
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By: |
/s/ Vineet Nargolwala |
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Name: |
Vineet Nargolwala |
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Title: |
President and Chief Executive Officer |
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SANKEN ELECTRIC CO., LTD. |
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By: |
/s/ Hiroshi Takahashi |
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Name: |
Hiroshi Takahashi |
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Title: |
Representative Director, President |
[Signature Pages to Share Repurchase Agreement]
Exhibit 10.2
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT OF ALLEGRO MICROSYSTEMS,
INC.
This SECOND AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT (as it may be amended, amended and restated or otherwise modified from time to time in accordance
with the terms hereof, this “Agreement”) is entered into by and between Allegro MicroSystems, Inc., a Delaware corporation
(the “Corporation”), and Sanken Electric Co., Ltd., a Japanese corporation (“Sanken”), as of July
23, 2024, to become effective as of July 29, 2024. Certain terms used in this Agreement are defined in Section 9.
RECITALS
WHEREAS, Sanken, OEP
SKNA, L.P., a Cayman Islands exempted limited partnership (“OEP”) and the Corporation entered into that certain Stockholders
Agreement dated as of September 30, 2020 (the “Original Agreement”);
WHEREAS, the Original
Agreement was amended and restated in its entirety pursuant to Section 13 thereof by that certain Amended and Restated Stockholders Agreement,
by and among Sanken, OEP and the Corporation, dated as of June 16, 2022 (the “First A&R Agreement”);
WHEREAS, pursuant
to Section 13 of the First A&R Agreement, the First A&R Agreement may be amended if such amendment is approved by means of a written
instrument executed on behalf of each of Sanken, OEP and the Corporation;
WHEREAS, pursuant
to Section 13 of the First A&R Agreement, OEP has delivered to the Corporation and Sanken an executed waiver acknowledging and waiving
any objection to the amendment, modification, alteration or supplementation of the First A&R Agreement without OEP’s express
written consent; and
WHEREAS, Sanken and
the Corporation deem it desirable to amend and restate the First A&R Agreement in its entirety on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in
consideration of the recitals and the mutual premises, covenants and agreements contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the First A&R Agreement is amended and
restated in its entirety as follows:
AGREEMENT
Section 1. Election of the Board of Directors.
(a) Subject
to the other provisions of this Section 1, from and after the date hereof, the number of Directors constituting the full Board
shall be fixed at eleven (11); provided that, upon a Decrease in Designation Rights (as defined below), the Board may fix the number
of directors constituting the full Board by one or more resolutions of the Board adopted from time to time.
(b) Subject
to this Section 1(b), for so long as Sanken and its Affiliates beneficially owns, directly or indirectly, in the aggregate at least
twenty percent (20%) or more of all issued and outstanding shares of common stock, par value $0.01 per share, of the Corporation (“Common
Stock”), Sanken shall be entitled to designate for nomination by the Board in any applicable election that number of individuals,
which, assuming all such individuals are successfully elected to the Board, when taken together with any incumbent Sanken Director(s)
not standing for election in such year, would result in there being two (2) Sanken Directors on the Board. Subject to this Section
1(b), for so long as (x) Sanken and its Affiliates beneficially owns, directly or indirectly, in the aggregate at least ten percent
(10%) or more, but less than twenty percent (20%), of all issued and outstanding shares of Common Stock and (y) there is no incumbent
Sanken Director on the Board or there is an incumbent Sanken Director on the Board but such Director is not standing for election in such
year, Sanken shall be entitled to designate for nomination by the Board in any applicable election one (1) individual. For the avoidance
of doubt, if Sanken and its Affiliates cease to beneficially own, directly or indirectly, in the aggregate at least ten percent (10%)
of all issued and outstanding shares of Common Stock, Sanken shall not be entitled to designate any Director for nomination by the Board.
Subject to this Section 1(b), in addition to the foregoing designation rights, for so long as Sanken and its Affiliates beneficially
owns, directly or indirectly, in the aggregate at least ten percent
(10%) or more of all issued and outstanding shares
of Common Stock, Sanken shall be entitled to designate one (1) representative of Sanken, the identity of whom is reasonably acceptable
to the Corporation, to attend meetings of the Board in the capacity of observer (the “Sanken Observer”); provided,
however, that the Corporation reserves the right to exclude the Sanken Observer from access to any information or meeting or portion
thereof if the Corporation believes that such exclusion is reasonably necessary or advisable (A) to prevent the disclosure of trade secrets
or competitively sensitive information to third parties, (B) to prevent the violation of applicable law or any contractual or other obligation
of confidentiality owing to a third party, (C) to preserve the protection of an attorney-client privilege, attorney work product protection
or other legal privilege, (D) to prevent the exposure of the Corporation to risk of liability for disclosure of personal information and
(E) in light of any actual or potential conflicts of interest. For the avoidance of doubt, if Sanken and its Affiliates cease to beneficially
own, directly or indirectly, in the aggregate at least ten percent (10%) of all issued and outstanding shares of Common Stock, Sanken
shall not be entitled to designate the Sanken Observer. The Sanken Directors (if more than one (1)) shall be apportioned among the three
(3) classes of Directors as nearly equal in number as possible. The Sanken Directors as of the date of this Agreement shall be Katsumi
Kawashima (as a Class I Director) and Richard R. Lury (as a Class III Director) (collectively, the “Pre-Approved Sanken Directors”),
and the Sanken Observer as of the date of this Agreement shall be Kojiro Hatano. Notwithstanding anything herein to the contrary, Sanken
shall not nominate any individual pursuant to the first two sentences of this Section 1(b) other than the Pre-Approved Sanken Directors
without first consulting with the Corporation and then receiving the Corporation’s prior written consent (which consent shall not
be unreasonably withheld, conditioned or delayed).
(c) The
Nominating and Corporate Governance Committee shall be entitled to designate for nomination by the Board in any applicable election that
number of individuals, which, assuming all such individuals are successfully elected to the Board, when taken together with any incumbent
Nom/Gov Director(s) not standing for election in such year, would result in there being (x) eight (8) Nom/Gov Directors on the Board in
total and (y) at least six (6) of the total Nom/Gov Directors on the Board meeting the Independence Requirements. The Nom/Gov Directors
shall be apportioned among the three (3) classes of Directors as nearly equal in number as possible. The Nom/Gov Directors as of the date
of this Agreement shall be Joseph Martin (as a Class I Director), Mary Puma (as a Class I Director), Yoshihiro Suzuki (as a Class II Director),
Paul Carl Schorr IV (as a Class II Director), David Aldrich (as a Class II Director), Susan Lynch (as a Class III Director), and Jennie
Raubacher (as a Class III Director). For the avoidance of doubt, there shall be one (1) vacancy of a Nom/Gov Director as of the date of
this Agreement.
(d) Unless
Sanken and the Nominating and Corporate Governance Committee otherwise mutually agree, the then-current Chief Executive Officer of the
Corporation shall be designated for nomination by the Board in any applicable election (unless the class of Directors in which such individual
then-sits is not then-standing for election) (the “CEO Director”). The CEO Director shall be a Class I Director.
(e) The
Chairperson of the Board shall be appointed as Chairperson (or removed from the Chairperson position) by the Board from time to time only
upon the recommendation of the Nominating and Corporate Governance Committee. Yoshihiro Suzuki shall serve as the Chairperson of the Board
until his current term as a Class II Director shall expire.
(f) Subject
to the other provisions of this Section 1, Sanken hereby agrees to vote, or cause to be voted, all outstanding shares of Common
Stock held by Sanken at any annual or special meeting of stockholders of the Corporation at which Directors of the Corporation are to
be elected or removed, or to take all Necessary Action to cause the election, removal or replacement (or vacancy filling) of the Sanken
Directors and Nom/Gov Directors as and to the extent provided in this Section 1 and Section 2.
Section 2. Vacancies and Replacements.
(a) If
the number of Directors that Sanken has the right to designate to the Board is decreased pursuant to Section 1(b) (each such occurrence,
a “Decrease in Designation Rights”), then:
(i) Sanken
shall use its reasonable best efforts to cause each of the Sanken Directors that Sanken ceases to have the right to designate to serve
as a Sanken Director to offer to tender his, her or their resignation(s), and each of such Directors so tendering a resignation, as applicable,
shall resign within thirty (30) days from the date that Sanken incurs a Decrease in Designation Rights. In the event any such Director,
as applicable, does not resign as a Director by such time as is required by the foregoing, Sanken, as a holder of Common Stock, the Corporation
and the Board, to the fullest extent permitted by law and, with respect to the Board, subject to its fiduciary duties to the Corporation’s
stockholders, shall thereafter
take all Necessary Action, including
voting in accordance with Section 1(f), to cause the removal of such individual as a Director; and
(ii) the
vacancy or vacancies created by such resignation(s) and/or removal(s) shall be filled with one or more Directors, as applicable, designated
by the Board upon the recommendation of the Nominating and Corporate Governance Committee, so long as it is established.
(b) Sanken
shall have the sole right to request that one or more of its designated Directors tender their resignations as Directors of the Board,
with or without cause at any time, by sending a written notice to such Director and the Corporation’s Secretary stating the name
of the Director or Directors whose resignation from the Board is requested (the “Removal Notice”); provided,
however, that Sanken shall not be permitted to deliver a Removal Notice in respect of a Sanken Director, or to otherwise cause
or request the removal or resignation of a Sanken Director, without the prior written consent of the Nominating and Corporate Governance
Committee (not to be unreasonably withheld, conditioned or delayed). If the Director subject to such Removal Notice does not resign within
thirty (30) days from receipt thereof by such Director, Sanken, as a holder of Common Stock, the Corporation and the Board, to the fullest
extent permitted by law and, with respect to the Board, subject to its fiduciary duties to the Corporation’s stockholders, shall
thereafter take all Necessary Action, including voting in accordance with Section 1(f), to cause the removal of such Director from
the Board (and such Director shall only be removed by the parties to this Agreement in such manner as provided herein).
(c) Each
of Sanken and the Nominating and Corporate Governance Committee, as applicable, shall have the exclusive right to designate a replacement
Director for nomination or election by the Board to fill vacancies created as a result of not designating their respective Directors initially
or by death, disability, retirement, resignation or removal (with or without cause) of their respective Directors, or otherwise by designating
a successor for nomination or election by the Board to fill the vacancy of their respective Directors created thereby on the terms and
subject to the conditions of Section 1; provided, however, that Sanken shall not have the right to designate any
such replacement as a Sanken Director other than a Pre-Approved Sanken Director without the prior written consent of the Nominating and
Corporate Governance Committee (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 3. Board Committees.
For so long as Sanken has
the right to designate any Sanken Director pursuant to Section 1 above, it shall have the right to designate at least one (1) Director
to any committee of the Board, unless otherwise prohibited pursuant to any law or stock exchange rules (including in respect of the audit
committee of the Board); provided that any such designee shall not serve as Chairperson of any committee of the Board.
Section 4. [Intentionally Omitted].
Section 5. Certain Covenants of the Corporation and Sanken.
(a) The
Corporation agrees to take all Necessary Action to (i) cause the Board to be comprised of at least that number of Directors contemplated
by Section 1(a) from time to time, or such other number of Directors as the Board may determine, subject to the terms of this Agreement,
the Charter or the Bylaws of the Corporation; (ii) cause the individuals designated in accordance with Section 1 to be included
in the slate of nominees to be elected to the Board at the next annual or special meeting of stockholders of the Corporation at which
Directors are to be elected, in accordance with the Bylaws, Charter and General Corporation Law of the State of Delaware and at each annual
meeting of stockholders of the Corporation thereafter at which such Director’s term expires; and (iii) cause the individuals designated
in accordance with Section 2(c) to fill the applicable vacancies on the Board, in accordance with the Bylaws, Charter, Securities
Laws, General Corporation Law of the State of Delaware and the NASDAQ rules.
(b) Sanken
shall comply with the requirements of the Charter and Bylaws when designating and nominating individuals as Directors, in each case, to
the extent such requirements are applicable to Directors generally. Notwithstanding anything to the contrary set forth herein, in the
event that the Board determines, within sixty (60) days after compliance with the first sentence of this Section 5(b), in good
faith, after consultation with outside legal counsel, that its nomination, appointment or election of a particular Director designated
in accordance with Section 1 or Section 2, as applicable, would constitute a breach of its fiduciary duties to the Corporation’s
stockholders or does not otherwise comply with any requirements of the Charter or Bylaws, then the Board shall inform Sanken of such determination
in writing and explain in reasonable detail the basis for such determination
and
shall, to the fullest extent permitted by law, nominate, appoint or elect another individual designated for nomination, election or appointment
to the Board by Sanken (subject in each case to this Section 5(b)). The Board and the Corporation shall, to the fullest extent
permitted by law, take all Necessary Action required by this Section 5 with respect to the election of such substitute designees
to the Board.
(c) In
the event the Board recommends that its stockholders vote in favor of any matter that the Board has determined in good faith (after reasonable
consultation with such Persons as the Board deems appropriate (including the Corporation’s or the Board’s legal and financial
advisors, as applicable), and following any deliberations of the Board that the Board determines are necessary or appropriate to consider
the matter) to be advisable and in the best interests of its stockholders, then, if requested by the Nominating and Corporate Governance
Committee, Sanken hereby agrees to vote all outstanding shares of Common Stock held thereby (i) in favor of such matter and any other
matter that the Board has determined is necessary or appropriate in connection with such matter and (ii) against and in opposition to
any matter that would reasonably be expected to oppose, impede, frustrate, prevent or nullify such matter.
(d) Subject
to this Section 5(d), in the event that Sanken desires to sell or transfer, directly or indirectly, a portion of its shares of
Common Stock (the “Offered Shares”) to any other Person(s), it shall, (i) subject to any applicable confidentiality
restrictions imposed on Sanken by law, contract or otherwise, use commercially reasonable efforts to discuss any such possible sale or
transfer, including such sale or transfer to any of its controlled Affiliates in accordance with Section 12, with the Corporation,
so that the Corporation can consider in good faith any potential commercial or other matters that may result from such potential sale
or transfer and (ii) other than sales or transfers of the Offered Shares to controlled Affiliates (subject to complying with Section
12) or pursuant to an underwriter-led widely distributed public offering, first offer to sell the Offered Shares to the Corporation
in writing (the “ROFR Notice”) indicating the identity of such unaffiliated third party and the cash price that the
third party proposes to be paid (the “Offer Price”) for the Offered Shares (the “ROFR Offer”). The
Corporation may accept or reject the ROFR Offer in whole but not in part, in its sole discretion, at a cash price equal to the Offer Price,
by delivering a written notice of such acceptance or rejection, as the case may be, to Sanken within five (5) Business Days after receipt
of the ROFR Notice. Upon receipt of a notice of acceptance, Sanken will be bound to (and, as applicable, to require its Affiliates to)
sell the Offered Shares to the Corporation at the Offer Price set forth in the ROFR Notice. If the Corporation accepts the ROFR Offer
within the five (5) Business Day period, then the parties shall (and, as applicable, require its Affiliates to) consummate the purchase
and sale of the Offered Shares at the Offer Price set forth in the ROFR Notice as soon as reasonably practicable. Upon the earlier to
occur of (i) the Corporation delivering a written notice of rejection to Sanken or (ii) the expiration of the initial five (5) Business
Day period without the Corporation electing to accept or reject the ROFR Offer, Sanken shall have a ninety (90) day period during which
to effect a sale or transfer to the unaffiliated third party the Offered Shares at a price equal to or greater than the Offer Price set
forth in the ROFR Notice. If Sanken does not consummate the sale or transfer of the Offered Shares in accordance with the foregoing time
limitations, then the right of Sanken to effect the sale or transfer of such Offered Shares pursuant to this Section 5(d) shall
terminate and Sanken shall again comply with the procedures set forth in this Section 5(d) with respect to any proposed sale or
transfer of its shares of Common Stock to an unaffiliated third party. In addition, in no event shall Sanken directly sell or transfer,
directly or indirectly, any of its shares of Common Stock which is greater than ten percent (10%) of all of the then issued and outstanding
shares of Common Stock to any other Person that is a material competitor of the Corporation without the prior written consent of the Corporation
(which consent shall not be unreasonably withheld, conditioned or delayed); provided that, for the avoidance of doubt, the foregoing restrictions
shall not apply to any underwriter-led widely distributed public offering. Notwithstanding anything to contrary contained herein, in no
event shall this Section 5(d) operate to restrain, limit or supersede the agreements in Section 5(c), and in all events
this Section 5(d) shall be subordinate to the provisions of Section 5(c).
Section 6. Termination.
(a) This Agreement shall terminate
upon the earliest to occur of any one of the following events:
(i) Sanken and its
Affiliates ceasing to own less than ten percent (10%) of all issued and outstanding shares of Common Stock; or
(ii) the unanimous
written consent of the parties hereto.
Notwithstanding the foregoing,
nothing in this Agreement shall modify, limit or otherwise affect, in any way, any and all rights to indemnification, exculpation and/or
contribution owed by any of the parties hereto, to the extent arising out of or relating to events occurring prior to the date of termination
of this Agreement or the date the rights and obligations of such party under this Agreement terminates in accordance with this Section
6.
Section 7. Information Rights.
The Corporation will furnish to Sanken, for so
long as Sanken and its Affiliates beneficially own, directly or indirectly, in the aggregate at least ten percent (10%) of all issued
and outstanding shares of Common Stock, the following information:
(a) as
soon as available, but no later than the later of (i) ninety (90) days following completion of each fiscal year and (ii) the applicable
filing deadline under SEC rules, the audited consolidated balance sheet of the Corporation and its Subsidiaries as at the end of each
such fiscal year and the audited consolidated statements of income, cash flows and changes in stockholders’ equity for such year
of the Corporation and its Subsidiaries, setting forth in each case in comparative form the figures for the next preceding fiscal year,
accompanied by the report of independent certified public accountants of recognized national standing; provided that this requirement
shall be deemed to have been satisfied if, on or prior to such date, the Corporation files its annual report on Form 10-K for the applicable
fiscal year with the SEC;
(b) as
soon as available, but no later than the later of (i) forty-five (45) days following completion of each fiscal quarter (other than the
fourth fiscal quarter) and (ii) the applicable filing deadlines under SEC rules, the consolidated balance sheet of the Corporation and
its Subsidiaries as at the end of such quarter and the consolidated statements of income, cash flows and changes in stockholders' equity
for such quarter and the portion of the fiscal year then ended of the Corporation and its Subsidiaries, setting forth in each case the
figures for the corresponding periods of the previous fiscal year in comparative form; provided that this requirement shall be
deemed to have been satisfied if, on or prior to such date, the Corporation files its quarterly report on Form 10-Q for the applicable
fiscal quarter with the SEC; and
(c) within ninety (90) days
after the end of each fiscal year, such information that the Corporation then-has which is reasonably necessary for the preparation of
Sanken’s income tax returns (whether federal, state or foreign).
Section 8. Public
Announcements.
Subject to Sanken’s
disclosure obligations imposed by law or regulation or the rules of any stock exchange upon which its securities are listed, Sanken and
the Corporation will cooperate with each other in the development and distribution of all news releases and other public information disclosures
with respect to the Corporation and/or its Subsidiaries, and Sanken will not make any such news release or public disclosure without first
consulting with the Corporation, and, in each case, also receiving the consent of the Corporation (which shall not be unreasonably withheld
or delayed) and Sanken shall coordinate with the Corporation with respect to any such news release or public disclosure. Notwithstanding
the foregoing, this Section 8 shall not apply to any press release or other public statement made by Sanken (a) which is consistent
with prior disclosure and does not contain any information that has not been previously announced or made public in accordance with the
terms of this Agreement or (b) to its auditors, attorneys, accountants, financial advisors or limited partners (who, in the case of this
clause (b), are bound by customary duties of confidentiality).
Section 9. Definitions.
As used in this Agreement, any term that it is not defined
herein, shall have the following meanings:
“Affiliate”
means as to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control
with such specified Person, provided, however, that none of the Corporation, any Subsidiary of the Corporation or any officers,
directors, employees, advisors or agents of the Corporation or any of its Subsidiaries shall be deemed an Affiliate of Sanken or any of
its Affiliates (and vice versa). For purposes of this definition, “control,” as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.
“Board” means the board of directors of
the Corporation.
“Business Day” means a day, other than
Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable law to close.
“Bylaws”
means the amended and restated bylaws of the Corporation, dated as of May 25, 2023, as the same may be further amended, restated, amended
and restated or otherwise modified from time to time.
“Charter”
means the third amended and restated certificate of incorporation of the Corporation, effective as of November 2, 2020, as the same may
be further amended, restated, amended and restated or otherwise modified from time to time.
“Director” means a member of the Board.
“Equity Securities”
means, with respect to any Person, any (i) shares of capital stock, equity interests, voting securities or other ownership interests in
such Person or (ii) options, warrants, calls, subscriptions, “phantom” rights, interest appreciation rights, performance units,
profits interests or other rights or convertible or exchangeable securities.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder.
“Governing Documents”
means the legal documents by which any Person (other than an individual) establishes its legal or which govern its internal affairs, including
the articles or certificate of incorporation or formation, bylaws, operating agreement, limited liability company agreement, partnership
agreement, equityholders’ agreement, voting agreement, voting trust agreement, joint venture agreement, and any similar agreement
and any amendments or supplements to any of the foregoing.
“Immediate Family”
means, as to any individual, such individual’s parents, mother-in-law, father-in-law, spouse, brother or sister, brother-in-law
or sister-in-law, son-in-law or daughter-in-law and children (including by way of adoption), and any person who either lives in the same
household as, provides material support to, or receives material support from, such individual.
“Independence Requirements”
means, with respect to a Director, an individual who satisfies the applicable independence requirements under the rules of the Nasdaq
Global Market LLC or any other stock exchange where the Corporation’s stock is listed, as well as any requirements of such stock
exchange and under the rules of the Securities Exchange Act of 1934, as amended, as may be applicable, where the Director serves on a
committee of the Corporation’s Board.
“Necessary Action”
means, with respect to a specified result, all commercially reasonable actions required to cause such result that are within the power
of a specified Person, including (i) voting or providing a written consent or proxy with respect to the Equity Securities owned by the
Person obligated to undertake the necessary action, (ii) causing any Director appointed or designated by, or affiliated with or employed
by, such specified Person to vote in favor of or consent to the specified result, (iii) voting in favor of the adoption of stockholders’
resolutions and amendments to the organizational documents of the Corporation, (iv) executing (or causing such Person’s employees
or representatives to execute) agreements and instruments, and (v) making, or causing to be made, with governmental, administrative or
regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.
“Nominating and
Corporate Governance Committee” means the nominating and corporate governance committee of the Board or any committee of the
Board authorized to perform the function of recommending to the Board the nominees for election as Directors or nominating the nominees
for election as Directors.
“Nom/Gov Director”
means any Director who had initially been designated for nomination by the Nominating and Corporate Governance Committee in accordance
with Section 1(c).
“Person”
means any individual, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other entity or organization, including a government or any subdivision or agency
thereof.
“Sanken Director” means any Director
who had initially been designated for nomination by Sanken in accordance with Section 1(b).
“SEC” means the United States Securities
and Exchange Commission.
“Securities Laws”
means the Securities Act of 1933, as amended, and the Exchange Act.
“Subsidiary”
means with respect to any Person, any corporation, limited liability company, partnership, association, trust or other form of legal entity,
of which (a) such first Person directly or indirectly owns or controls at least a majority of the securities or other interests having
by their terms voting power to elect a majority of the board of directors or others performing similar functions, or (b) such first Person
is a general partner or managing member (excluding partnerships in which such Person or any Subsidiary thereof does not have a majority
of the voting interests in such partnership).
Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative
or similar words refer to this entire Agreement; (iv) the terms “Article” or “Section” refer to the specified
Article or Section of this Agreement; (v) the word “including” shall mean “including, without limitation”; (vi)
each defined term has its defined meaning throughout this Agreement, whether the definition of such term appears before or after such
term is used; and (vii) the word “or” shall be disjunctive but not exclusive. References to agreements and other documents
shall be deemed to include all subsequent amendments and other modifications thereto. References to statutes shall include all regulations
promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation.
Section 10. Choice of Law and Venue; Waiver of Right to Jury
Trial.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE. EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY
HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW
OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF FORUM SET FORTH
IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OF A DELAWARE FEDERAL OR STATE COURT, OR THE TAKING OF
ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT, IN ANY OTHER APPROPRIATE JURISDICTION.
(b) IN
THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1)
AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURT OF CHANCERY OF THE STATE
OF DELAWARE, OR IF (AND ONLY IF) SUCH COURT FINDS IT LACKS SUBJECT MATTER JURISDICTION, THE SUPERIOR COURT OF THE STATE OF DELAWARE (COMPLEX
COMMERCIAL DIVISION), OR IF UNDER APPLICABLE LAW, SUBJECT MATTER JURISDICTION OVER THE MATTER THAT IS THE SUBJECT OF THE ACTION OR PROCEEDING
IS VESTED EXCLUSIVELY IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE,
AND APPELLATE COURTS FROM ANY THEREOF, WITH RESPECT TO ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY; (2) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT
AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (1) OF THIS SECTION 10(b) AND TO SERVICE OF PROCESS
UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES
GOVERNING
SERVICE OF PROCESS; (3) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT
FORUM; (4) AGREE TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT; (5) AGREE TO SERVICE
OF PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH
PARTY; (6) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (7) AGREE THAT
NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 11. Notices.
Any notice, request, claim,
demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in
writing and delivered personally or sent by facsimile, or by electronic mail, or first class mail, or by Federal Express or other similar
courier or other similar means of communication, as follows:
(a) |
If to the Corporation, addressed as follows: |
|
|
|
Allegro MicroSystems, Inc. |
|
955 Perimeter Road |
|
Manchester, New Hampshire, 03103 Attention: Vineet Nargolwala; Sharon Briansky |
|
Email: [***] |
|
|
|
with a copy (which copy shall not constitute notice) to: |
|
|
|
Davis Polk & Wardwell LLP |
|
450 Lexington Avenue |
|
New York, New York 10020 |
|
Attn: Thomas Malone; Michael Davis |
|
Facsimile: 212-701-5015; 212-701-5184 |
|
E-mail: [***] |
|
|
(b) |
If to Sanken, addressed as follows: |
|
|
|
Sanken Electric Co., Ltd. |
|
3-6-3 Kitano Niiza-Shi Saitama, 352-8666 JAPAN |
|
Attn: Katsumi Kawashima; Masanobu Todoroki |
|
Email: [***] |
|
|
|
with a copy (which copy shall not constitute notice) to: |
|
|
|
Jones Day |
|
1755 Embarcadero Road |
|
Palo Alto, CA 94303 |
|
Attn: Jeremy Cleveland |
|
Email: [***] |
or, in each case, to such other address or email address as such party
may designate in writing to each party by written notice given in the manner specified herein. All such communications shall be deemed
to have been given, delivered or made when so delivered by hand or sent by facsimile (with confirmed transmission), on the next business
day if sent by overnight courier service (with confirmed delivery) or when received if sent by first class mail, or in the case of notice
by electronic mail, when the relevant email enters the recipient’s server.
Section 12. Assignment; Aggregation of Shares.
Except as otherwise provided
herein, all of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable
by the respective successors and permitted assigns of the parties hereto. This Agreement may not be assigned (by operation of law or otherwise)
without the express prior written consent of each of the parties hereto, and any attempted assignment, without such consents, will be
null and void; provided, however, that Sanken is permitted to assign this Agreement to its controlled Affiliates in connection
with a transfer of the Common Stock to such controlled Affiliate. In furtherance of the foregoing, Sanken shall cause any of its controlled
Affiliates that obtains any shares of Common Stock to, upon obtaining such shares, become a party to this Agreement and be bound by the
terms of this Agreement to the fullest extent as if such controlled Affiliate were Sanken hereunder. For the avoidance of doubt, for purposes
of (a) determining whether any party meets any threshold contained herein which is based on ownership of shares of Common Stock or (b)
any provisions that require the parties hereto to vote or take any other actions with respect to any shares of Common Stock, such determinations
or provisions shall be deemed to include all shares of Common Stock held by any controlled Affiliate of Sanken that becomes party to this
Agreement pursuant to this Section 12; provided, however, that for purposes hereof, in no event shall (x) beneficial
ownership of shares of Common Stock of one party hereto be counted towards the beneficial ownership of shares of Common Stock of any other
party hereto solely as a result of such parties being in the same “group” (as defined in the Exchange Act) or being party
to this Agreement and (y) any party hereto be considered an Affiliate of any other party hereto solely by virtue of being in the same
“group” (as defined in the Exchange Act) or being party to this Agreement.
Section 13. Amendment and Modification; Waiver of Compliance.
This Agreement may not be
amended, modified, altered or supplemented except by means of a written instrument executed on behalf of each of the Corporation and Sanken.
Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party
or parties granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
Section 14. Waiver.
No failure on the part of
either party hereto to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of either party hereto
in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver thereof, and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
Section 15. Severability.
If any provision of this
Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be held to be invalid or unenforceable
to any extent, (i) the remainder of this Agreement shall not be affected thereby, and each other provision hereof shall be valid and enforceable
to the fullest extent permitted by law, (ii) as to such Person or circumstance or in such jurisdiction such provision shall be reformed
to be valid and enforceable to the fullest extent permitted by law and (iii) the application of such provision to other Persons or circumstances
or in other jurisdictions shall not be affected thereby.
Section 16. Counterparts.
This Agreement may be executed
in any number of counterparts and signatures may be delivered electronically (including via Docusign) or by facsimile, each of which may
be executed by less than all parties, each of which shall be enforceable against the parties actually executing such counterparts, and
all of which together shall constitute one instrument.
Section 17. Further Assurances.
At any time or from time
to time after the date hereof, the parties hereto agree to cooperate with each other, and at the request of any other party, to execute
and deliver any further instruments or documents and to take all such further action as any other party may reasonably request in order
to evidence or effectuate the provisions of this Agreement and to otherwise carry out the intent of the parties hereunder.
Section 18. Titles and Subtitles.
The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
Section 19. Representations and Warranties.
(a) Sanken
and each Person who becomes a party to this Agreement after the date hereof, severally and not jointly and solely with respect to itself,
represents and warrants to the Corporation as of the time such party becomes a party to this Agreement that (i) if applicable, it is duly
authorized to execute, deliver and perform this Agreement; (ii) this Agreement has been duly executed by such party and is a valid and
binding agreement of such party, enforceable against such party in accordance with its terms; and (iii) the execution, delivery and performance
by such party of this Agreement does not violate or conflict with or result in a breach of or constitute (or with notice or lapse of time
or both constitute) a default under any agreement to which such party is a party or, if applicable, the organizational documents of such
party.
(b) The
Corporation represents and warrants to Sanken that (i) the Corporation is duly authorized to execute, deliver and perform this Agreement;
(ii) this Agreement has been duly authorized, executed and delivered by the Corporation and is a valid and binding agreement of the Corporation,
enforceable against the Corporation in accordance with its terms; and (iii) the execution, delivery and performance by the Corporation
of this Agreement does not violate or conflict with or result in a breach by the Corporation of or constitute (or with notice or lapse
of time or both constitute) a default by the Corporation under the Charter or Bylaws, any existing applicable law, rule, regulation, judgment,
order, or decree of any governmental authority exercising any statutory or regulatory authority of any of the foregoing, domestic or foreign,
having jurisdiction over the Corporation or any of its Subsidiaries or any of their respective properties or assets, or any agreement
or instrument to which the Corporation or any of its Subsidiaries is a party or by which the Corporation or any of its Subsidiaries or
any of their respective properties or assets may be bound.
Section 20. No Strict Construction.
This Agreement shall be deemed
to be collectively prepared by the parties hereto, and no ambiguity herein shall be construed for or against any party based upon the
identity of the author of this Agreement or any provision hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
|
ALLEGRO MICROSYSTEMS, INC. |
|
|
|
|
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By: |
/s/ Vineet Nargolwala |
|
|
Name: |
Vineet Nargolwala |
|
|
Title: |
President and Chief Executive Officer |
[Signature Page to Second Amended and Restated Stockholders Agreement]
|
SANKEN ELECTRIC CO., LTD. |
|
|
|
|
|
By: |
/s/ Hiroshi Takahashi |
|
|
Name: |
Hiroshi Takahashi |
|
|
Title: |
Representative Director, President |
[Signature Page to Second Amended and Restated Stockholders Agreement]
Exhibit 99.1
Preliminary First Quarter 2025 Results
Recent Developments
Preliminary
Financial Results for the First Quarter Ended June 28, 2024
While the financial closing and financial statement
preparation process of Allegro MicroSystems, Inc. (the “Company”, “our”, “us”, “we” or
“Allegro”) is in its preliminary stages, Allegro currently expects the following unaudited preliminary financial results for
the first quarter ended June 28, 2024:
|
|
GAAP |
|
Non-GAAP |
|
|
Preliminary June 28, 2024 Results (unaudited) |
|
Preliminary June 28, 2024 Results (unaudited) |
|
|
(As of 7/23/2024) |
|
(As of 7/23/2024) |
Total Net Sales |
|
$167M +/- $1.0M |
|
$167M +/- $1.0M |
Gross Profit $ |
|
$74.5M +/- $1.0M |
|
$81.5M +/- $1.0M |
Gross Margin % |
|
44.6% +/- 25 bps |
|
48.8% +/- 25 bps |
Operating Expenses $ |
|
$85.5M +/- $0.5M |
|
$71.5M +/- $0.5M |
Net (Loss) Income Attributable to Allegro MicroSystems, Inc. |
|
($17.7M) +/- $1.0M |
|
$6.0M +/- $1.0M |
Diluted Earnings (Loss) per Share |
|
($0.10) - ($0.09) |
|
$0.02 -$0.03 |
Net Loss |
|
($17.6M) +/- $1.0M |
|
NA |
Adjusted EBITDA |
|
NA |
|
$22.0M +/- $1.0M |
Operating Cash Flow |
|
$32.7M +/- $2.0M |
|
N/A |
Free Cash Flow |
|
NA |
|
$23.0M +/- $2.0M |
Gross
profit decreased in the three-month period ended June 28, 2024 compared to the three-month period ended June 30, 2023 due to a decrease
in net sales, as well as lower cost of goods sold primarily due to a reduction in production volume as well as product mix, offset by
an increase in amortization of intangible assets in relation to the acquisition of Crocus Technology International Corp. In addition,
the Company made progress during the three-month period ended June 28, 2024 in working closely with customers to manage orders to reduce
inventory in the channel and return to more normalized business levels.
Cash and
cash equivalents was $184 million, inclusive of $11 million in restricted cash, at June 28, 2024.
The Company currently expects that our final first
quarter results will be within the ranges described above. The anticipated preliminary financial results referred to herein are based
on management’s preliminary, unaudited analysis of the Company’s financial performance as of the date hereof. As of the date
hereof, our results for the fiscal quarter ended June 28, 2024 have not been completed and Allegro has not completed its quarter end procedures
for such periods. These estimates are preliminary and inherently uncertain and subject to change as we finalize our results of operations
for the fiscal quarter ended June 28, 2024. During the course of our quarter-end review process, the Company may identify items that would
require it to make adjustments, which may be material, to the information presented above. There can be no assurance that our final results
for the fiscal quarter ended June 28, 2024 will not differ materially from these preliminary estimates. The preliminary estimates presented
above should not be viewed as a substitute for condensed consolidated interim financial statements prepared in accordance with U.S. Generally
Accepted Accounting Principles (“GAAP”). The above statements do not present all information necessary for an understanding
of our results of operations for the fiscal quarter ending June 28, 2024. Accordingly, undue reliance should not be placed on these preliminary
financial results. These preliminary financial results for the three months ended June 28, 2024 are not necessarily indicative of the
results to be achieved for the full fiscal year or any future period.
The preliminary financial data included herein
has been prepared by, and is the responsibility of, the Company’s management. PricewaterhouseCoopers LLP has not audited, reviewed,
examined, compiled, nor applied agreed-upon procedures with respect to the preliminary financial data. Accordingly, PricewaterhouseCoopers
LLP does not express an opinion or any other form of assurance with respect thereto.
Investor Non-GAAP Financial Measures
In addition to the measures presented in our consolidated
financial statements, we regularly review other measures, defined as non-GAAP financial measures by the U.S Securities and Exchange Commission,
to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key
measures we consider are non-GAAP Gross Profit, non-GAAP Gross Margin, non-GAAP Operating Expenses, EBITDA, Adjusted EBITDA, Adjusted
EBITDA margin, non-GAAP Net Income, non-GAAP Basic
and Diluted Earnings per Share, Free Cash Flow and Free Cash Flow Margin (collectively,
the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures provide supplemental information regarding our operating
performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently
and/or that management considers to be unrelated to our core operations, and in the case of non-GAAP Income Tax Provision, management
believes that this non-GAAP measure of income taxes provides it with the ability to evaluate the non-GAAP Income Tax Provision across
different reporting periods on a consistent basis, independent of special items and discrete items, which may vary in size and frequency.
These Non-GAAP Financial Measures are used by both management and our Board of Directors, together with the comparable GAAP information,
in evaluating our current performance and planning our future business activities.
The Non-GAAP Financial Measures are supplemental
measures of our performance that are neither required by, nor presented in accordance with, GAAP. The Non-GAAP Financial Measures used
by us may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies, which
could reduce the usefulness of our Non-GAAP Financial Measures as tools for comparison. These Non-GAAP Financial Measures should not be
considered as substitutes for GAAP financial measures such as gross profit, gross margin, net income or any other performance measures
derived in accordance with GAAP. Also, in the future we may incur expenses or charges such as those being adjusted in the calculation
of these Non-GAAP Financial Measures. Our presentation of these Non-GAAP Financial Measures should not be construed as an inference that
future results will be unaffected by unusual or nonrecurring items. These Non-GAAP Financial Measures exclude costs related to acquisition
and related integration expenses, amortization of acquired intangible assets, stock-based compensation, restructuring actions, related
party activities and other non-operational costs.
Reconciliation
of Preliminary Non-GAAP Gross Margin
| |
Three-Month Period Ended |
| |
June 28, 2024 (unaudited) |
| |
(Dollars in thousands, except percentages) |
GAAP Gross Profit | |
$ | 74,500 | | |
| +/-$1.0M |
GAAP Gross Margin | |
| 44.6 | % | |
| +/-25bps |
Non-GAAP adjustments | |
| | | |
| |
Purchased intangible amortization | |
| 5,000 | | |
| |
Restructuring costs | |
| 1,200 | | |
| |
Stock-based compensation | |
| 600 | | |
| |
Other costs(1) | |
| 200 | | |
| |
Total Non-GAAP Adjustments | |
$ | 7,000 | | |
| +/-$1.0M |
| |
| | | |
| |
Non-GAAP Gross Profit | |
$ | 81,500 | | |
| +/-$1.0M |
Non-GAAP Gross Margin (% of net sales) | |
| 48.8 | % | |
| +/-25bps |
(1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure.
| Reconciliation | of Preliminary Non-GAAP Operating Expenses |
| |
Three-Month Period Ended |
| |
June 28, 2024 (unaudited) |
| |
(Dollars in thousands) |
GAAP Operating Expenses | |
$ | 85,500 | | |
| +/-$0.5M |
| |
| | | |
| |
Research and Development Expenses | |
| | | |
| |
GAAP Research and Development Expenses | |
| 45,000 | | |
| |
Non-GAAP adjustments | |
| | | |
| |
Transaction-related costs | |
| 1,000 | | |
| |
Restructuring costs | |
| 200 | | |
| |
Stock-based compensation | |
| 3,700 | | |
| |
Non-GAAP Research and Development Expenses | |
| 40,100 | | |
| +/-$0.5M |
| |
| | | |
| |
Selling, General and Administrative Expenses | |
| | | |
| |
GAAP Selling, General and Administrative Expenses | |
| 40,200 | | |
| |
Non-GAAP adjustments | |
| | | |
| |
Transaction-related costs | |
| 800 | | |
| |
Purchased intangible amortization | |
| 500 | | |
| |
Restructuring costs | |
| 1,000 | | |
| |
Stock-based compensation | |
| 5,800 | | |
| |
Other costs(1) | |
| 1,000 | | |
| |
Non-GAAP Selling, General and Administrative Expenses | |
| 31,100 | | |
| +/-$0.5M |
| |
| | | |
| |
Total Non-GAAP Adjustments | |
| 14,000 | | |
| +/-$0.5M |
| |
| | | |
| |
Non-GAAP Operating Expenses | |
$ | 71,500 | | |
| +/-$0.5M |
(1) Included in non-GAAP other costs are non-recurring charges that are
individually immaterial for separate disclosure such as project evaluation costs, which consist of costs incurred in connection with debt
and equity financings or other non-recurring transactions.
Reconciliation
of Preliminary EBITDA and Preliminary Adjusted
EBITDA
| |
Three-Month Period Ended |
| |
June 28, 2024 (unaudited) |
| |
(Dollars in thousands, except percentages) |
GAAP Net Loss | |
$ | (17,600 | ) | |
| +/-$1.0M |
GAAP Net Loss Margin (% of net sales) | |
| (10.5 | )% | |
| +/-50bps |
Interest expense | |
| 5,500 | | |
| |
Interest income | |
| (500 | ) | |
| |
Income tax provision | |
| 1,500 | | |
| |
Depreciation & amortization | |
| 16,500 | | |
| |
EBITDA | |
$ | 5,400 | | |
| +/-$1.0M |
| |
| | | |
| |
Transaction-related costs | |
| 1,800 | | |
| |
Restructuring costs | |
| 2,400 | | |
| |
Stock-based compensation | |
| 10,100 | | |
| |
Other costs(1) | |
| 2,300 | | |
| |
Adjusted EBITDA | |
$ | 22,000 | | |
| +/-$1.0M |
Adjusted EBITDA Margin (% of net sales) | |
| 13.2 | % | |
| +/-50bps |
| |
| | | |
| |
(1) Included in non-GAAP other costs are non-recurring charges that are
individually immaterial for separate disclosure such as project evaluation costs, which consist of costs incurred in connection with debt
and equity financings or other non-recurring transactions and income (loss) in earnings of equity investments.
Reconciliation
of Preliminary Non-GAAP Net Income Attributable to
Allegro MicroSystems, Inc. and Preliminary Non-GAAP Diluted
Earnings per Share
| |
Three-Month Period Ended |
| |
June 28, 2024 (unaudited) |
| |
(Dollars in thousands (except per share amounts) and share counts in millions) |
GAAP Net Loss Attributable to Allegro MicroSystems, Inc.(1) | |
$ | (17,700 | ) | |
| +/-$1.0M |
GAAP Diluted Loss per Share | |
$ | (0.09 | ) | |
| +/-$0.01 |
| |
| | | |
| |
Transaction-related costs | |
| 1,800 | | |
| |
Transaction-related interest | |
| 700 | | |
| |
Purchased intangible amortization | |
| 5,400 | | |
| |
Restructuring costs | |
| 2,400 | | |
| |
Stock-based compensation | |
| 10,100 | | |
| |
Other costs(2) | |
| 2,900 | | |
| |
Total Non-GAAP Adjustments | |
| 23,300 | | |
| +/-$1.0M |
Tax effect of adjustments to GAAP results(3) | |
| 400 | | |
| |
Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. | |
$ | 6,000 | | |
| +/-$1.0M |
Diluted weighted average common shares | |
| 194.7 | | |
| |
Non-GAAP Diluted Earnings per Share | |
$ | 0.03 | | |
| +/-$0.01 |
| |
| | | |
| |
(1) GAAP
Net Loss Attributable to Allegro MicroSystems, Inc. represents GAAP Net Income adjusted for Net Income Attributable to non-controlling
interests.
(2) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure
such as project evaluation costs, which consist of costs incurred in connection with debt and equity financings or other non-recurring
transactions and income (loss) in earnings of equity investments.
(3) To calculate the tax effect of adjustments to GAAP results, the Company considers each
Non-GAAP adjustment by tax jurisdiction and reverses all discrete items to calculate an annual Non-GAAP effective tax rate (“NG
ETR”). This NG ETR is then applied to Non-GAAP Profit Before Tax to arrive at the tax effect of adjustments to GAAP
results.
Reconciliation
of Preliminary Non-GAAP Free Cash Flow
| |
Three-Month Period Ended |
| |
June 28, 2024 (unaudited) |
| |
(Dollars in thousands, except percentages) |
GAAP Operating Cash Flow | |
$ | 32,700 | | |
| +/-$2.0M |
GAAP Operating Cash Flow % of net sales | |
| 19.6 | % | |
| +/-50bps |
Non-GAAP adjustments | |
| | | |
| |
Purchases of property, plant and equipment | |
| (9,700 | ) | |
| +/-$2.0M |
| |
| | | |
| |
Non-GAAP Free Cash Flow | |
$ | 23,000 | | |
| +/-$2.0M |
Non-GAAP Free Cash Flow Margin (% of net sales) | |
| 13.8 | % | |
| +/-50bps |
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