FIRST AMENDMENT TO RIGHTS AGREEMENT
Exhibit 4.3
FIRST
AMENDMENT TO RIGHTS AGREEMENT
This FIRST AMENDMENT TO RIGHTS AGREEMENT, dated as of
December 10, 2008 (this “Amendment”), is
entered into by and between SCM Microsystems, Inc. a Delaware
corporation (the “Company”), and American Stock
Transfer & Trust Company (the “Rights
Agent”).
WHEREAS, the Company and the Rights Agent entered into a Rights
Agreement, dated as of November 8, 2002 (the
“Rights Agreement”);
WHEREAS, Section 27 of the Rights Agreement provides that,
in certain circumstances, the Company may supplement or amend
the Rights Agreement in any respect, without the approval of any
holders of Rights, and the Rights Agent shall execute such
supplement or amendment;
WHEREAS, the Company has entered into an Agreement and Plan of
Merger (the “Merger Agreement”) by and among
the Company, Xxxxxx Electronics Corporation, a California
corporation (“Xxxxxx”), Deer Acquisition, Inc.,
a California corporation and a wholly owned subsidiary of the
Company, and Xxxx Acquisition LLC, a Delaware limited liability
company and a wholly owned subsidiary of the Company, pursuant
to which through a two-step merger Xxxxxx will become a new
Delaware limited liability company and a wholly owned subsidiary
of the Company (the “Merger”) and the Company
will issue shares of its common stock and warrants to purchase
shares of its common stock to the former stockholders of Xxxxxx
as merger consideration;
WHEREAS, on December 9, 2008, the Board of Directors of the
Company approved the Merger Agreement and the Merger and
determined that the Merger and the other transactions
contemplated by the Merger Agreement are advisable and fair to,
and in the best interests of, the Company and its stockholders;
WHEREAS, on December 9, 2008, the Board of Directors of the
Company resolved to amend the Rights Agreement to ensure that
none of the execution or delivery of the Merger Agreement and
consummation of the transactions contemplated thereby, or the
execution or delivery of the ancillary agreements contemplated
by the Merger Agreement or the consummation of the transactions
contemplated thereby, will cause (a) the Rights to become
exercisable under the Rights Agreement, (b) Xxxxxx or any
of their affiliates or stockholders to be deemed to be an
“Acquiring Person,” or (c) a “Triggering
Event,” the “Distribution Date” or the
“Shares Acquisition Date” to occur; and
WHEREAS, the Company desires to modify the terms of the Rights
Agreement in certain respects as set forth herein, and in
connection therewith, is entering into this Amendment and
directing the Rights Agent to enter into this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Effect of Amendment. Except as
expressly provided herein, the Rights Agreement shall be and
remain in full force and effect.
2. Capitalized Terms. All
capitalized, undefined terms used in this Amendment shall have
the meanings assigned thereto in the Rights Agreement.
3. Amendments to Section 1.
(a) The definition of “Acquiring Person” in
Section 1 of the Rights Agreement is hereby amended to read
in its entirety as follows:
‘‘‘Acquiring Person’ shall mean any
Person, who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Common Shares then outstanding, but shall not
include the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no
Person shall be deemed to be an Acquiring Person as the result
of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person
to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common Shares of
the Company (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding Common Shares in
Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed to
be an Acquiring Person unless upon becoming the Beneficial Owner
of such additional Common Shares of the Company such Person does
not beneficially own 15% or more of the Common Shares of the
Company then outstanding. Notwithstanding the foregoing,
(i) if the Company’s Board of Directors determines in
good faith that a Person who would otherwise be an
“Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently (including, without limitation, because
(A) such Person was unaware that it beneficially owned a
percentage of the Common Shares that would otherwise cause such
Person to be an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), or
(B) such Person was aware of the extent of the Common
Shares it beneficially owned but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement)
and without any intention of changing or influencing control of
the Company, and if such Person divested or divests as promptly
as practicable a sufficient number of Common Shares so that such
Person would no longer be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this paragraph
(a), then such Person shall not be deemed to be or to have
become an “Acquiring Person” for any purposes of this
Agreement including, without limitation Section 1(gg)
hereof; (ii) if, as of the date hereof, any Person is the
Beneficial Owner of 15% or more of the Common Shares
outstanding, such Person shall not be or become an
“Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), unless and until
such time as such Person shall become the Beneficial Owner of
additional Common Shares (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding
Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), unless, upon
becoming the Beneficial Owner of such additional Common Shares,
such Person is not then the Beneficial Owner of 15% or more of
the Common Shares then outstanding; and (iii) neither
Xxxxxx nor any of its affiliates or stockholders shall be deemed
an Acquiring Person on account of the execution or delivery of
the Merger Agreement or the Ancillary Agreements or the
consummation of the transactions contemplated thereby
(including, until the termination of the Stockholder Agreement
in accordance with its terms, as a result of any Xxxxxx
stockholder being deemed the Beneficial Owner of any Common
Shares solely as a result of their being a party to the
Stockholder Agreement).”
(b) The definition of “Distribution Date” in
Section 1 of the Rights Agreement is hereby amended to read
in its entirety as follows:
‘‘‘Distribution Date’ shall mean the
earlier of (i) the Close of Business on the tenth (10th)
Business day (or such later date as may be determined by action
of the Company’s Board of Directors) after the
Shares Acquisition Date (or, if the tenth (10th) Business
Day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or
(ii) the Close of Business on the tenth (10th) Business Day
(or such later date as may be determined by action of the
Company’s Board of Directors) after the date that a tender
or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any Person pursuant to the Merger
Agreement or the Ancillary Agreements, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of
Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act, if,
assuming the successful consummation thereof, such Person would
be an Acquiring Person; provided that, if such Person is
determined not to have become an Acquiring Person pursuant to
Section 1(a) hereof, then no Distribution Date shall be
deemed to have occurred by virtue of such event.”
(c) The definition of “Shares Acquisition
Date” in Section 1 of the Rights Agreement is hereby
amended to read in its entirety as follows:
“‘Shares Acquisition Date’ shall mean
the first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) of the Exchange Act, but
exclude any public announcement or report relating to the
transactions contemplated by the Merger Agreement or
the Ancillary Agreements) by the Company or an Acquiring Person
that an Acquiring Person has become such; provided that, if such
Person is determined not to have become an Acquiring Person
pursuant to Section 1(a) hereof, then no
Shares Acquisition Date shall be deemed to have occurred by
virtue of such event.”
(d) The definition of “Triggering Event” in
Section 1 of the Rights Agreement is hereby amended to read
in its entirety as follows:
“A ‘Triggering Event’ shall be deemed to have
occurred upon any Person becoming an Acquiring Person; provided
that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no
Triggering Event shall be deemed to have occurred by virtue of
such event.”
(e) The definitions contained in Section 1 of the
Rights Agreement shall be supplemented by adding the following
definitions in alphabetical order:
‘‘‘Ancillary Agreements’ shall mean
all agreements, documents and instruments required to be
delivered by any party pursuant to the Merger Agreement, and any
other agreements, documents or instruments entered into at or
prior to effective time of the Merger in connection with the
Merger Agreement or the transactions contemplated thereby.”
“‘Deer Merger Sub’ shall mean Deer
Acquisition, Inc., a California corporation and a wholly owned
subsidiary of the Company.”
“‘Xxxx Merger Sub’ shall mean Xxxx
Acquisition LLC, a Delaware limited liability company and a
wholly owned subsidiary of the Company.”
“‘Xxxxxx’ shall mean Xxxxxx, a California
corporation.”
“‘Merger Agreement’ shall mean the
Agreement and Plan of Merger, by and among the Company, Xxxxxx,
Deer Merger Sub and Xxxx Merger Sub, pursuant to which through a
two-step merger Xxxxxx will become a new Delaware limited
liability company and a wholly owned subsidiary of the Company
(the “Merger”).”
“‘Stockholder Agreement’ shall mean the
Stockholder Agreement, by and among the Company and the Xxxxxx
stockholders a party thereto.”
4. New
Section 35. Section 35 is hereby
added to the Rights Agreement to read in its entirety as follows:
“Section 35. The Merger Agreement. Notwithstanding
anything contained in this Agreement to the contrary, neither
the approval, execution or delivery of the Merger Agreement or
the Ancillary Agreements, nor the consummation of the
transactions contemplated thereby or the performance by the
Company of its obligations thereunder shall cause (a) the
Rights to become exercisable, (b) Xxxxxx or any of its
affiliates or stockholder to be an Acquiring Person, (c) a
Triggering Event to occur, (d) a Shares Acquisition
Date to occur or (e) a Distribution Date to occur.”
5. Effective Date. This Amendment
is effective as of December 10, 2008, immediately prior to
the execution and delivery of the Merger Agreement.
6. Governing Law. This Amendment
shall be governed by, construed and enforced in accordance with
the laws of the State of Delaware without reference to the
conflicts or choice of law principles thereof.
7. Counterparts; Facsimile
Signatures. This Amendment may be executed in
any number of counterparts (including facsimile signature) each
of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
8. Headings. The headings in this
Amendment are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed, all as of the day and year first
above written.
SCM MICROSYSTEMS, INC.
| By: |
/s/ Xxxxx
Xxxx
|
Xxxxx Xxxx
Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
COMPANY
| By: |
/s/ Xxxxxxx
X. Xxxxxx
|
Name: Xxxxxxx X. Xxxxxx
| Title: | Vice President |
[Signature
Page to Amendment to Rights Agreement]
