EXHIBIT 3
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
Amendment No. 2 to Rights Agreement, dated as of April 9,
2002 (this "Amendment"), between Standard Microsystems Corporation, a Delaware
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York banking corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent entered into that
certain Rights Agreement, dated January 7, 1998 (as amended by that certain
Amendment No. 1 to Rights Agreement dated January 23, 2001, the "Prior
Agreement," and as amended hereby, the "Rights Agreement"); and
WHEREAS, the Company and the Rights Agent desire to make
certain amendments and clarifications to the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
1. Definition of Acquiring Person. Section 1(a) of the Prior
Agreement is hereby amended to add the following text at the end thereof:
"Notwithstanding the foregoing, (x) a Person shall not become
an Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 20% or more (or 28% or more, in the case of
Citigroup) of the shares of Common Stock then outstanding solely as a result of
a reduction in the number of shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company, unless and until such time
as such Person shall purchase or otherwise become (as a result of actions by
such Person or its Affiliates or Associates) the Beneficial Owner of any
additional shares of Common Stock and (y) "Acquiring Person" shall not include
any Person who or which becomes the Beneficial Owner of 20% or more (or 28% or
more, in the case of Citigroup) of the outstanding Common Stock but who acquired
beneficial ownership of shares of Common Stock inadvertently, and such Person
promptly (and in any event within 5 Business Days after being so requested by
the Company) divests or enters into an irrevocable commitment satisfactory to
the Company's Board of Directors promptly (and in any event within 5 Business
Days or such shorter period as shall be determined by the Company's Board of
Directors) to divest, and thereafter divests as required by such commitment,
sufficient shares of Common Stock so that such Person ceases to be a Beneficial
Owner of 20% or more (or 28% or more, in the case of Citigroup) of shares of
Common Stock."
2. Adverse Person. Section 1(c) of the Prior Agreement is
hereby deleted and replaced in its entirety with the following:
"(c) [Reserved]."
3. Continuing Director. Section 1(j) of the Prior Agreement is
hereby deleted and replaced in its entirety with the following:
"(j) [Reserved]."
4. Issue of Rights Certificates. (a) Clause (i) of the first
sentence of Section 3(a) of the Prior Agreement is hereby deleted and replaced
with the following:
"(i) the close of business on the Stock Acquisition Date or"
(b) The reference to "ChaseMellon Shareholder Services,
L.L.C." in the first sentence of the legend contained in Section 3(c) of the
Prior Agreement shall be replaced with a reference to "American Stock Transfer &
Trust Company".
(c) The words "or Adverse Person" are hereby deleted from the
fourth sentence of the legend contained in Section 3(c) of the Prior Agreement.
5. Form of Rights Certificates. Section 4(b) of the Prior
Agreement is hereby amended to read in its entirety as follows:
"(b) Any Rights Certificate issued pursuant to Section 3(a) or
3(b) or Section 22 hereof that represents Rights beneficially owned by Persons
known by the Company to be: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights or (B) a transfer that the Board
of Directors of the Company has determined is part of a plan, arrangement, or
understanding that has as a primary purpose or effect the avoidance of Section
7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section
11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall bear (to the extent feasible and
specified by the Company) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement."
6. Exercise of Rights; Purchase Price; Expiration Date of
Rights. Section 7(e) of the Prior Agreement is hereby amended to read in its
entirety as follows:
"(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use reasonable efforts to effect
compliance with the provisions of this Section 7(e) and Section 4(b) hereof, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates, or transferees hereunder."
7. Adjustment of Purchase Price. (a) Section 11(a)(ii)(A) of
the Prior Agreement is hereby amended to replace all references to "30%" therein
with references to "20%".
(b) Section 11(a)(ii)(B) of the Prior Agreement is hereby
amended to read in its entirety as follows:
"(B) [Reserved]"
8. Duties of Rights Agent. Section 20(b) of the Prior
Agreement is hereby amended to delete the words "or Adverse Person" from the
first sentence thereof.
9. Redemption and Termination. Section 23(a) of the Prior
Agreement is hereby amended to read in its entirety as follows:
"(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Stock Acquisition Date and (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), and the Company may, at its
option, pay the Redemption Price either in cash, shares of Common Stock (based
on the "current market price", as defined in Section 11(d)(i) hereof, of the
shares of Common Stock at the time of redemption), or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish."
10. Supplements and Amendments. Section 26 of the Prior
Agreement is hereby amended to read in its entirety as follows:
"Section 26. Supplements and Amendments. Prior to the Stock
Acquisition Date and subject to the penultimate sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the Stock
Acquisition Date and subject to the penultimate sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision
herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing, or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made that changes the Redemption Price, changes the Final Expiration
Date to an earlier date, increases the Purchase Price or reduces the number of
Units of Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock."
11. Determinations and Actions by the Board of Directors, etc.
Section 28 of the Prior Agreement is hereby amended to read in its entirety as
follows:
"Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or any member thereof to any
liability to the holders of the Rights."
12. Severability. Section 30 of the Prior Agreement is hereby
amended to delete the words "(subject to any required concurrence of the
Continuing Directors)" from the first sentence thereof.
13. Exhibit B. (a) The legend appearing at the top of the form
of the Rights Certificate included as Exhibit B to the Prior Agreement is hereby
amended to read in its entirety as follows:
"NOT EXERCISABLE AFTER JANUARY 12, 2008 OR EARLIER IF REDEEMED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT (AS
SUCH TERMS ARE HEREINAFTER DEFINED). UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON.
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.] THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO
LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION
TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN
SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE."
(b) The first sentence of the form of Rights Certificate
included as Exhibit B to the Prior Agreement is hereby amended to add the words
"as amended from time to time" after the words "January 7, 1998" in the first
sentence thereof.
(c) The second paragraph of the form of Rights Certificate
included as Exhibit B to the Prior Agreement is hereby amended to read in its
entirety as follows:
"Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person or an Associate or
Affiliate of any such Person, or (iii) under certain circumstances specified in
the Rights Agreement, a transferee of a person who, after such transfer, became
an Acquiring Person or an Affiliate or Associate of any such Person, such Rights
shall become null and void, and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event."
(d) The seventh paragraph of the form of Rights Certificate
included as Exhibit B to the Prior Agreement is hereby amended to read in its
entirety as follows:
"Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the earlier
of the close of business on (i) the Stock Acquisition Date (as such period may
be extended pursuant to the Rights Agreement) and (ii) the Final Expiration Date
(as such date may be extended pursuant to the Rights Agreement). After the
expiration of the redemption period, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 20% or
less of the outstanding shares of Common Stock in a transaction or series of
transaction not involving the Company in the manner contemplated by Section 1(a)
of the Rights Agreement."
(e) Paragraphs (1) and (2) of the form of Certificate included
on the reverse side of the form of Rights Certificate included as Exhibit B to
the Prior Agreement are hereby amended to read in their entirety as follows:
"(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was, or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person."
(f) Paragraphs (1) and (2) of the Form of Election to Purchase
included in the form of Rights Certificate included as Exhibit B to the Prior
Agreement are hereby amended to read in their entirety as follows:
"(1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person."
(g) The first sentence of the third paragraph of the NOTICE
included in the form of Rights Certificate included as Exhibit B to the Prior
Agreement is hereby amended to delete the words "or an Adverse Person" following
the words "an Acquiring Person" therein.
IN WITNESS WHEREOF, this Amendment has been signed on behalf
of each of the parties hereto as of the date first written above.
STANDARD MICROSYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Financial Officer and Director
American Stock Transfer & Trust Company
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
CERTIFICATION
The Company hereby certifies that this Amendment is in
compliance with the terms of Section 26 of the Prior Agreement.
STANDARD MICROSYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Financial Officer and Director
