AMENDMENT TO RIGHTS AGREEMENT BETWEEN BEI TECHNOLOGIES, INC. AND AMERICAN STOCK TRANSFER & TRUST COMPANY

Exhibit 10.1

AMENDMENT TO RIGHTS AGREEMENT
BETWEEN BEI TECHNOLOGIES, INC. AND
AMERICAN STOCK TRANSFER & TRUST COMPANY

THIS AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is made as of the 21st day of July, 2005, by and between BEI TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York banking corporation (the “Rights Agent”).

WHEREAS, the Company is entering into an Agreement and Plan of Merger (as the same may be amended from time to time, the “Merger Agreement”), among the Company, Xxxxxxxxx Electric SA, a societé anonyme organized under the laws of the Republic of France (“Parent”), and Beacon Purchaser Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of Parent (“Acquisition Sub”), pursuant to which Acquisition Sub will: (i) make a tender offer to acquire all of the issued and outstanding shares of common stock of the Company, par value $0.001 per share, on the terms and subject to the conditions set forth in the Merger Agreement (such tender offer, as it may be amended from time to time, is referred to in this Amendment as the “Offer”); and (ii) after acquiring shares of common stock of the Company pursuant to the Offer, Acquisition Sub will merge with and into the Company upon the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, the Company and the Rights Agent (as successor Rights Agent to Chasemellon Shareholder Services, L.L.C.) are parties to that certain Rights Agreement, dated as of September 11, 1997, as it was amended on December 22, 2004 (the “Rights Agreement”);

WHEREAS, the Company desires to amend the Rights Agreement in connection with the execution and delivery of the Merger Agreement; and

WHEREAS, the Board of Directors of the Company has approved this Amendment and authorized its appropriate officers to execute and deliver the same to the Rights Agent.

NOW, THEREFORE, in accordance with the procedures for amendment of the Rights Agreement set forth in Section 27 thereof, and in consideration of the foregoing and the mutual agreements herein set forth, the parties hereby agree as follows:

1. Capitalized terms that are not otherwise defined herein shall have the meanings ascribed to them in the Rights Agreement.

2. The definition of “Acquiring Person” set forth in Section 1(a) of the Rights Agreement is amended by adding the following sentence to the end of that section:

Notwithstanding the foregoing, no Person shall be or become an Acquiring Person by reason of (i) the execution and delivery of the Agreement and Plan of Merger, dated as of July 21, 2005, among Xxxxxxxxx Electric SA, a societé anonyme organized under the laws of the Republic of France (“Parent”), and Beacon Purchaser Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of Parent (“Acquisition Sub”), and the Company (the

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“Merger Agreement”) or the execution of any amendment thereto, (ii) the execution and delivery of those Transaction Support Agreements executed by Parent and each of the persons listed on the signature page of such Transaction Support Agreements in connection with the execution and delivery of the Merger Agreement and dated July 21, 2005 (the “Transaction Support Agreements”) or the execution of any amendment thereto, (iii) the purchase by Acquisition Sub of Common Shares pursuant to a tender offer to acquire all of the issued and outstanding Common Shares to be commenced by Acquisition Sub pursuant to, and on the terms and subject to the conditions set forth in, the Merger Agreement (such tender offer, as it may be amended from time to time, is referred to in this Agreement as of the “Offer”), (iv) the merger of Acquisition Sub with and into the Company pursuant to, and on the terms and subject to the conditions set forth in, the Merger Agreement (the “Merger”), or (v) the consummation of any other transaction contemplated by the Merger Agreement, as it may be amended from time to time.

3. The definition of “Shares Acquisition Date” in Section l(o) of the Rights Agreement is hereby amended by adding the following sentence to the end of that section:

Notwithstanding anything else set forth in this Agreement, a Shares Acquisition Date shall be deemed not to have occurred by reason of (i) the execution and delivery or amendment of the Merger Agreement or the Transaction Support Agreements, (ii) the purchase by Acquisition Sub of Common Shares pursuant to the Offer, (iii) the Merger, or (iv) the consummation of any other transaction contemplated by the Merger Agreement.

4. Section 3(a) of the Rights Agreement is hereby amended by adding the following sentence to the end of that section:

Notwithstanding anything else set forth in this Agreement, no Distribution Date shall be deemed to have occurred by reason of (i) the execution and delivery or amendment of the Merger Agreement or the Transaction Support Agreements, (ii) the purchase by Acquisition Sub of Common Shares pursuant to the Offer, (iii) the Merger, or (iv) the consummation of any other transaction contemplated by the Merger Agreement.

5. Section 7(a)(i) of the Rights Agreement is hereby amended to delete the phrase “(the “Final Expiration Date”)” so that it shall read as follows:

(i) the Close of Business on September 10, 2007,

6. Section 7(a) is further amended by deleting the word “or” at the end of Section 7(a)(ii) and by adding the following clause at the end of Section 7(a):

, or (iv) the moment in time immediately prior to the effective time of the Merger, as such time is determined pursuant to Section 2.1 of the Merger Agreement (the earlier to occur of the events described in clauses (i) and (iv) of this section shall be referred to as the “Final Expiration Date”).

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7. Section 11(a)(ii) of the Rights Agreement is hereby amended by adding the following sentence to the end of that section:

Notwithstanding anything else set forth in this Agreement, no event requiring an adjustment under this Section 11(a)(ii) shall be deemed to have occurred by reason of (i) the execution and delivery or amendment of the Merger Agreement or the Transaction Support Agreements, (ii) the purchase by Acquisition Sub of Common Shares pursuant to the Offer, (iii) the Merger, or (iv) the consummation of any other transaction contemplated by the Merger Agreement.

8. Sections 13(a)(x) and (y) of the Rights Agreement are amended to read as follows:

(a) In the event that, following the Shares Acquisition Date, or, if a Transaction is proposed, the Distribution Date, directly or indirectly (x) the Company shall consolidate with, or merge with and into, any Interested Stockholder, or if in such merger or consolidation all holders of Common Shares are not treated alike, any other Person, (y) any Interested Stockholder, or if in such merger or consolidation all holders of Common Shares are not treated alike, any other Person, shall consolidate with the Company, or merge with and into, the Company, and the Company shall be the continuing or surviving corporation of such merger (other than, in the case of either transaction described in (x) or (y), (i) a merger or consolidation which would result in all of the Voting Power represented by the securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into securities of the surviving entity) all of the voting power represented by the securities of the Company or such surviving entity outstanding immediately after such merger or consolidation and the holders of such securities not having changed as a result of such merger or consolidation or (ii) the Merger),

The remaining portion of Section 13(a) shall be unchanged and shall remain in full force and effect.

9. The first phrase of Section 13(c) of the Rights Agreement is hereby amended to read as follows:

The Company shall not consummate any such consolidation, merger (other than the Merger), sale or transfer unless the Principal Party shall have a sufficient number of authorized Common Shares that have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and each Principal Party and each other Person who may become a Principal Party as a result of such consolidation, merger, sale or transfer shall have (i) executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and (ii) prepared, filed and had declared and remain effective a registration statement under the Act on the appropriate form with respect to Rights and the securities exercisable upon exercise of the

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Rights and further providing that, as soon as practicable after the date of any consolidation, merger, sale or transfer of assets mentioned in paragraph (a) of this Section 13, the Principal Party at its own expense will:  .. . .

The remaining portion of Section 13(c) shall be unchanged and shall remain in full force and effect.

10. 13(d)(i) of the Rights Agreement is hereby amended to read as follows:

(i) consolidate with (other than the Merger),

11. 13(d)(ii) of the Rights Agreement is hereby amended to read as follows:

(ii) merge with or into (other than by the Merger),

12. The Rights Agreement, as amended by this Amendment, shall remain in full force and effect in accordance with its terms.

13. All the covenants and provisions of this Amendment by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

14. Nothing in this Amendment shall be construed to give to any person or corporation other than the Company, the Parent, the Acquisition Sub, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Amendment; but this Amendment shall be for the sole and exclusive benefit of the Company, the Parent, the Acquisition Sub, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).

15. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

16. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.

17. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

18. The Company hereby certifies to the Rights Agent that this Amendment is in compliance with Section 27 of the Rights Agreement.

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IN WITNESS WHEREOF, the parties herein have caused this Amendment to be duly executed and attested, all as of the date and year first above written.

			BEI TECHNOLOGIES, INC.
			By:	/s/ Xxxxxxx Xxxxxxx
				Name: Xxxxxxx Xxxxxxx
				Title: Chairman and Chief Executive Officer
Attest:	/s/ Xxxxxx X. Xxxx
	Name: Xxxxxx X. Xxxx
	Title:   Secretary
			AMERICAN STOCK TRANSFER & TRUST
			COMPANY
			By:	/s/ Xxxxxxx X. Xxxxxx
				Name: Xxxxxxx X. Xxxxxx
				Title: Vice President
Attest:	/s/ Xxxxxxx Xxxxx
	Name: Xxxxxxx Xxxxx
	Title: Vice President

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