1
EXHIBIT 2
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is entered
into by Kent Electronics Corporation, a Texas corporation (the "Company"), and
Mellon Investor Services LLC, a New Jersey limited liability company, formerly
known as ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights
Agent"), effective as of March 21, 2001.
WHEREAS, the Company and the Rights Agent entered into that certain
Rights Agreement dated as of October 21, 1999 (the "Rights Agreement"), and all
capitalized terms not defined herein shall have the meanings given to such
terms in the Rights Agreement; and
WHEREAS, the Company has entered into an Amended and Restated
Agreement and Plan of Merger dated as of March 21, 2001 (the "Merger
Agreement") with Avnet, Inc., a New York corporation ("Avnet"), under the terms
of which the Company will be merged with and into Avnet and the separate
corporate existence of the Company will thereupon cease (the "Merger"); and
WHEREAS, Section 4.14 of the Merger Agreement provides that the
Company shall take all necessary action, including, if required, amending the
Rights Agreement so that the entering into of the Merger Agreement and the
consummation of the Merger and the other transactions contemplated thereby do
not and will not result in a "Distribution Date" under the Rights Agreement;
and
WHEREAS, the Company has entered into an Amended and Restated Stock
Option Agreement dated as of March 21, 2001 (the "Stock Option Agreement") with
Avnet, under the terms of which the Company has granted to Avnet an option to
acquire 2,863,474 shares of Common Stock; and
WHEREAS, in order to facilitate the transactions contemplated by the
Merger Agreement and Stock Option Agreement, the Company and the Rights Agent
desire to amend the Rights Agreement as provided herein pursuant to Section 27
of the Rights Agreement, which authorizes the Company and the Rights Agent, if
the Company so directs, to supplement or amend any provision of the Rights
Agreement without the approval of any holders of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth the parties hereto agree as follows:
1. The definition of "Acquiring Person" in Section 1 of the
Rights Agreement is hereby amended and restated in its entirety to read 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 shares of Common Stock then outstanding, but shall not
include any Exempt Person; provided, however, that a Person shall not become an
Acquiring Person if such Person, together with its Affiliates
2
and Associates, shall become the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding solely as a result of (i) any action or
transaction or series of related actions or transactions between the Company
and such Person approved by the Board before such Person otherwise became an
Acquiring Person or (ii) a reduction in the number of shares of Common Stock
outstanding pursuant to a transaction or series of transactions approved by the
Board, unless and until such time as such Person or any Affiliate or Associate
of such Person shall purchase or otherwise become the Beneficial Owner of
additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or any other Person (or Persons) who is (or
collectively are) the Beneficial Owner of shares of Common Stock constituting
1% or more of the then outstanding shares of Common Stock shall become an
Affiliate or Associate of such Person, unless the acquisition of such
additional Common Stock would not result in such Person becoming an Acquiring
Person by reason of clause (i) or (ii) above; and provided, further, that if
the Board determines in good faith that a Person that would otherwise be an
"Acquiring Person" has become such inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its
beneficial ownership of Common Stock 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
divests itself as promptly as practicable of beneficial ownership of a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement.
In accordance with the first clause (i) in the immediately preceding
paragraph and notwithstanding any provision of this Agreement to the contrary,
(1) no Distribution Date, Section 11(a)(ii) Event, Section 13 Event, Stock
Acquisition Date or Triggering Event shall be deemed to have occurred, (2)
neither Avnet nor any Affiliate or Associate of Avnet shall be deemed to have
become an Acquiring Person, and (3) no holder of Rights shall be entitled to
exercise such Rights under, or be entitled to any other rights pursuant to,
this Agreement or any Rights issued hereunder solely by reason of (y) the
approval, execution, delivery or performance by the Company and Avnet of the
Merger Agreement or the Stock Option Agreement, or (z) the consummation of the
transactions contemplated by the Merger Agreement (including the Merger) or the
Stock Option Agreement; provided, however, that in the event Avnet or any
Affiliate or Associate of Avnet becomes an Acquiring Person after the date
hereof in any manner other than pursuant to the Merger Agreement or the Stock
Option Agreement, the foregoing provisions of this paragraph (other than this
proviso) shall not be applicable; and provided, further, that, notwithstanding
Section 27 of this Agreement and except to the extent that any supplement or
amendment to this Agreement would constitute a breach of Section 4.14 of the
Merger Agreement, any supplement or further amendment to this Agreement can, in
the Company's discretion, have retroactive effect with respect to Avnet and its
Affiliates or Associates, regardless of whether Avnet and its Affiliates or
Associates consent, and regardless of whether the supplement or amendment has
an adverse affect on Avnet or its Affiliates or Associates."
2
3
2. Except as specifically provided herein, the Rights Agreement
shall continue in full force and effect in accordance with its terms without
amendment or modification.
3
4
IN WITNESS WHEREOF, the undersigned parties hereby execute this
Amendment on this 14th day of May 2001, and agree to be bound by this Amendment
effective as of March 21, 2001.
ATTEST: KENT ELECTRONICS CORPORATION
/s/ David R. Cobb /s/ Stephen J. Chapko
- -------------------------------------- --------------------------------------
Name: David R. Cobb Name: Stephen J. Chapko
-------------------------------- --------------------------------
Title: Assistant Treasurer Title: Executive Vice President & CFO
------------------------------ ------------------------------
ATTEST: MELLON INVESTOR SERVICES LLC,
AS RIGHTS AGENT
/s/ Margaret Grubb /s/ Deodatt Lakeram
- -------------------------------------- --------------------------------------
Name: Margaret Grubb Name: Deodatt Lakeram
-------------------------------- --------------------------------
Title: Assistant Vice President Title: Assistant Vice President
------------------------------- -------------------------------
4