CONFIDENTIALITY, STANDSTILL AND BOARD REPRESENTATION AGREEMENT
This Confidentiality, Standstill and Board Representation Agreement
(the "Agreement") is made as of the 7th day of July, 2005 by and between Artesyn
Technologies, Inc. ("ARTESYN") and Xxxx Partners LLC ("XXXX", and together with
ARTESYN, the "Parties").
1. BACKGROUND. ARTESYN and XXXX intend to engage in discussions
concerning potential strategic alternatives that XXXX, as a significant
stockholder of ARTESYN, believes that ARTESYN should evaluate; and ARTESYN is
prepared to furnish to XXXX and to JANA's directors, officers, members,
employees and agents, as applicable (collectively, "Representatives"), certain
of its confidential or proprietary information and use its best efforts to cause
a designee of XXXX to be appointed to the ARTESYN Board of Directors (the
"Board"). The Parties are entering into this Agreement in order to assure the
confidentiality of the Confidential Information (as defined below) in accordance
with the terms of this Agreement and to provide the terms upon which XXXX will
be entitled to have a designee appointed to and remain on the Board.
2. CONFIDENTIAL INFORMATION. As used in this Agreement, the term
"Confidential Information" shall mean all information and data of ARTESYN or any
of its affiliates furnished to XXXX or any of its Representatives pursuant to
this Agreement by or on behalf of ARTESYN, but does not include information that
(i) was known by XXXX or available to the public prior to the time of its
disclosure, (ii) becomes available to the public through no act or omission of
XXXX or (iii) becomes available to XXXX from a third party not known by XXXX to
be under any obligation of confidentiality to ARTESYN with respect thereto. In
addition, the term "Confidential Information" shall be deemed to include any
notes, analyses, compilations, studies, interpretations, memoranda or other
documents prepared by XXXX or its Representatives that contain, reflect or are
based upon, in whole or in part, or recollections or memorizations of, any
Confidential Information furnished to XXXX or its Representatives pursuant
hereto.
3. USE AND DISCLOSURE OF CONFIDENTIAL INFORMATION. XXXX and its
Representatives shall use the Confidential Information only to assist XXXX in
evaluating potential strategic alternatives available to ARTESYN. The
Confidential Information shall not be used or exploited for any other purpose
without the prior written consent of ARTESYN. XXXX and its Representatives shall
hold in strict confidence, and shall not use or disclose any Confidential
Information, except as may be required by law in the opinion of JANA's outside
counsel. In the event of any such disclosure pursuant to court order or
governmental request, XXXX will provide ARTESYN with reasonable prior written
notice so that ARTESYN may seek a protective order or other appropriate remedy,
and XXXX shall exercise reasonable efforts to assist ARTESYN in obtaining such
order or remedy. XXXX shall disclose Confidential Information to its
Representatives only on a need to know basis for the purpose specified herein.
In any event, XXXX shall be responsible for any breach of this Agreement by any
of its Representatives, and agrees, at its sole expense, to use reasonable best
efforts to safeguard the Confidential Information and restrain its
Representatives from any prohibited or unauthorized disclosure or use of the
Confidential Information. In addition, XXXX hereby acknowledges that the federal
securities laws, including Regulation FD thereof, impose restrictions on its
ability to purchase, sell, trade or otherwise transfer securities of ARTESYN
until such time as the material, non-public information provided by ARTESYN to
XXXX becomes publicly available or is no longer material and XXXX further agrees
hereby to comply with all such restrictions.
4. RETURN OF CONFIDENTIAL INFORMATION. XXXX shall, upon conclusion of
discussions between the Parties hereto, or at any earlier time upon ARTESYN's
request, return to ARTESYN all documents furnished to XXXX by or on behalf of
ARTESYN containing Confidential Information, and
XXXX shall destroy all copies, electronic or otherwise, of such material
together with any notes, extracts and other materials prepared by XXXX or JANA's
Representatives containing or based upon any Confidential Information. In
addition, upon the written request of ARTESYN, XXXX shall deliver an officer's
certificate certifying that it has complied with the provisions of this
Section 4.
5. ACCURACY AND COMPLETENESS. While ARTESYN shall endeavor to furnish
information that it considers to be relevant for the purpose of JANA's
investigation, neither ARTESYN nor its Representatives makes any representations
or warranties as to the accuracy or completeness of the Confidential
Information. XXXX agrees that neither ARTESYN nor any of its Representatives
shall have any liability to XXXX resulting from JANA's disclosure or use of the
Confidential Information, whether or not permitted hereby.
6. STANDSTILL. XXXX hereby agrees that, from the date hereof until six
(6) months from the date of this Agreement (the "Standstill Period"), neither it
nor any of its affiliates or associates (as each such term is defined in Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, will (and neither it nor its affiliates or associates
will assist or encourage others to), without the prior written consent of
ARTESYN: (i) seek or propose to influence or control the management or policies
of ARTESYN or obtain representation on ARTESYN's Board (except as set forth
herein), or solicit, or participate in the solicitation of, any proxies or
consents with respect to any securities of ARTESYN, or make any public
announcement with respect to ARTESYN (except as required by law) or any of the
foregoing or request permission to do any of the foregoing; (ii) submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction (including, but not limited to, a tender offer, exchange offer,
merger, acquisition or consolidation) involving ARTESYN or its securities or
assets; or (iii) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing, or
otherwise form, join or in any way participate in a "group" (as defined in
Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing,
PROVIDED, HOWEVER, that XXXX shall not be subject to the foregoing restrictions
in the event that (A) ARTESYN calls a special meeting for the purpose of
amending its articles of incorporation or bylaws, (B) ARTESYN's Board without
the concurrence of the XXXX Designee (as defined below) authorizes any officer
or other representative of ARTESYN to negotiate or pursue any material agreement
containing a provision providing for any material consequence upon a change of
control of the Company or a sale of a substantial portion of the Company's
assets by sale, merger or otherwise, (C) the XXXX Designee (as defined below)
shall not have been appointed within twenty (20) calendar days from the date
hereof other than as a result of action or inaction on the part of XXXX, (D)
ARTESYN's Board without the concurrence of the XXXX Designee (as defined below)
authorizes any officer or other representative of ARTESYN to begin a process
designed to culminate in the issuance of any equity securities or securities
convertible into equity securities (other than pursuant to the exercise of
options, warrants or other rights to acquire equity securities heretofore
granted, conversion of outstanding convertible securities and grants of options,
restricted stock or other equity compensation under existing agreements, plans
or arrangements or under agreements with respect to the acquisition of any
business or entity which is required to be approved by ARTESYN's stockholders)
or (E) ARTESYN's Board without the concurrence of the XXXX Designee (as defined
below) authorizes any officer or other representative of ARTESYN to negotiate or
pursue any agreement with respect to the acquisition or disposition of any
business or entity (provided that nothing contained herein shall prevent ARTESYN
or ARTESYN's Board from taking any of the foregoing actions).
7. BOARD REPRESENTATION. In accordance with ARTESYN's articles of
incorporation and bylaws, and subject to and consistent with ARTESYN's Corporate
Governance Guidelines and Governance and Nominating Committee Charter, ARTESYN
will increase the size of its Board by one seat and fill the newly-created seat
by appointing Xxxx X. Xxxxxxx or another person designated by
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XXXX and reasonably acceptable to the Board (the "XXXX Designee") to the Board.
The XXXX Designee shall provide ARTESYN with such information as ARTESYN
reasonably requests, including, without limitation, all information about the
XXXX Designee as would be required to be included in a proxy statement with
respect to the election of directors. The XXXX Designee shall be appointed to
any committee of the Board established to evaluate potential strategic
alternatives and/or to pursue any alternative(s) selected. The XXXX Designee
shall be entitled to the same option grants, compensation, expense
reimbursements, indemnification and insurance coverage as the other
non-management directors of ARTESYN. XXXX shall be entitled to the XXXX
Designee, and the XXXX Designee shall be entitled to serve in the aforementioned
capacity, for a period of six months beginning as of the date hereof, unless
otherwise agreed to in writing by XXXX and ARTESYN, and at the end of such
period such entitlement shall expire and, upon the request of ARTESYN, XXXX will
cause the XXXX Designee to resign from the Board and any committees as of the
end of such period.
8. NO WAIVER. No failure or delay by either Party in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial waiver thereof preclude any other or further exercise thereof
or the exercise of any other right or remedy hereunder.
9. INJUNCTIVE RELIEF. Each party acknowledges and agrees that, because
of the unique nature of this Agreement, the other party would suffer irreparable
harm in the event of a breach by such party of any of its obligations under this
Agreement, such that monetary damages would be inadequate to compensate the
non-breaching party for such a breach. Each party agrees that under such
circumstances the other party shall be entitled to injunctive relief, in
addition to any other appropriate relief at law to which such party shall be
entitled, and waives any requirement for the securing or posting of any bond in
connection with such remedy.
10. COSTS; DAMAGES; ATTORNEYS' FEES. In the event of an improper
disclosure or use of Confidential Information by XXXX or its Representative,
XXXX shall assume and discharge liability for all costs, damages and expenses
sustained by the ARTESYN as may be caused or compounded thereby. If any suit or
other action is commenced to construe or enforce any provision of this
Agreement, the prevailing Party, in addition to all other amounts such Party
shall be entitled to receive from the non-prevailing Party to such action, shall
be awarded reasonable attorneys' fees and court costs.
11. MISCELLANEOUS. This Agreement (i) shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts entered into and to be performed wholly within said State, (ii)
constitutes the entire agreement of the Parties hereto with respect to the
subject matter hereof, superseding all prior agreements, written or oral, (iii)
may not be amended, except in writing, (iv) may be executed in counterparts, (v)
shall be binding upon and inure to the benefit of each Party's successors and
permitted assigns, (vi) may not be assigned without the prior written consent of
the other Party and (vii) shall be enforceable, notwithstanding the
unenforceability of any particular provision hereof, with respect to all other
provisions hereof.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
ARTESYN TECHNOLOGIES, INC.
By: /s/ Xxxxxx X'Xxxxxxx
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Name: Xxxxxx X'Xxxxxxx
Title: President and Chief
Executive Officer
XXXX PARTNERS LLC
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Managing Partner
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