INDUCEMENT AGREEMENT
This Inducement Agreement (the "Agreement"), dated as of March 2, 2000, by
and among Avnet, Inc., a New York corporation ("Parent"), and the stockholders
listed on the signature page hereof (each such stockholder being referred to
herein as a "Stockholder" and, collectively with each other Stockholder, the
"Stockholders").
W I T N E S S E T H
WHEREAS, each Stockholder is the sole record and beneficial owner of, and
has the sole right to vote with respect to, certain shares of common stock, par
value $.01 per share (the "Company Common Stock") of Savoir Technology Group,
Inc., a Delaware corporation ("Company") (together with any shares of Company
Common Stock acquired by a Stockholder after the date hereof, the "Company
Shares");
WHEREAS, Parent, Tactful Acquisition Corp., a Delaware corporation
("Buyer"), and Company propose on the date hereof to enter into an Agreement and
Plan of Merger (the "Merger Agreement"), pursuant to which Buyer will be merged
with and into Company (the "Merger"), on the terms and subject to the conditions
contained in the Merger Agreement; and
WHEREAS, in order to induce Buyer and Parent to enter into the Merger
Agreement and to incur the obligations set forth therein, the Stockholders are
entering into this Agreement pursuant to which each Stockholder is granting: (i)
an irrevocable proxy to Parent to vote in favor of the Merger, and to make
certain agreements with respect to such Stockholders' Company Shares, upon the
terms and conditions set forth herein, and (ii) an option to Parent to purchase
all of the Company Shares owned by such Stockholders.
NOW THEREFORE, for and in consideration of the foregoing and the mutual
promises contained herein, and upon and subject to the terms and conditions set
forth below, the parties hereto agree as follows:
Section 1. Grant of Irrevocable Proxy. Each Stockholder hereby irrevocably
appoints and constitutes Parent or any designee of Parent, with full power of
substitution, the lawful agent, attorney and proxy of the Stockholder (each an
"Irrevocable Proxy") during the term of this Agreement to vote in its sole
discretion all of the shares of Company Common Stock of which such Stockholder
is or becomes the owner of record or has the power to vote in the following
manner for the following purposes: (i) to call one or more meetings of the
stockholders of Company in accordance with the By-Laws of Company and applicable
law for the purpose of considering the transactions contemplated by the Merger
Agreement such that the stockholders shall have the full opportunity to approve
the Merger Agreement and any and all amendments, modifications and
waivers thereof and the transactions contemplated thereby; (ii) in favor of the
Merger Agreement or any of the transactions contemplated by the Merger Agreement
at any stockholders meetings of Company held to consider the Merger Agreement
(whether annual or special and whether or not an adjourned meeting); (iii)
against any other proposal for any recapitalization, merger, sale of assets or
other business combination between Company and any other person or entity other
than Buyer or Parent or the taking of any action which would result in any of
the conditions to Parent's obligations under the Merger Agreement not being
fulfilled; and (iv) as otherwise necessary or appropriate to enable Buyer and
Parent to consummate the transactions contemplated by the Merger Agreement and,
in connection with such purposes, to otherwise act with respect to the Shares
which the Stockholder is entitled to vote. THIS IRREVOCABLE PROXY HAS BEEN GIVEN
IN CONSIDERATION OF THE UNDERTAKINGS OF BUYER AND PARENT IN THE MERGER AGREEMENT
AND SHALL BE IRREVOCABLE AND COUPLED WITH AN INTEREST UNTIL THE EXPIRATION DATE
AS DEFINED IN SECTION 2 HEREOF. This Agreement shall revoke all other proxies
granted by the Stockholders with respect to their Shares.
Section 2. Expiration Date. This Irrevocable Proxy shall expire on the date
(the "Expiration Date") of the earlier to occur of (i) the effective time of the
Merger, (ii) 6 months after the first occurrence of a Purchase Event (or if, at
the expiration of such 6-months after the first occurrence of a Purchase Event,
the Option (as defined below) cannot be exercised by reason of any applicable
judgment, decree, order, law or regulation, 10 business days after such
impediment to exercise shall have been removed, but in no event under this
clause (ii) later than the first anniversary of the Purchase Event), (iii)
termination of the Merger Agreement under circumstances which do not and cannot
result in Parent becoming entitled to receive the Termination Fee from Company
pursuant to Section 4.9 of the Merger Agreement; and (iv) 12 months after the
termination of the Merger Agreement under circumstances which do or could result
in Parent's becoming entitled to receive the Termination Fee from Issuer
pursuant to Section 4.9 of the Merger Agreement, unless during such 12-month
period, a Purchase Event shall occur. As used herein, a "Purchase Event" means
an event the result of which is that Parent becomes entitled to receive the
Termination Fee from Company pursuant to Section 4.9 of the Merger Agreement.
Section 3. Grant of Option. Subject to the conditions herein set forth,
each Stockholder hereby grants to Parent an irrevocable option (the "Option") to
acquire such Stockholder's Shares (the "Option Shares"), at the Exercise Price,
payable in cash or in shares of common stock, par value $1.00 per share, of
Parent (the "Parent Stock"), at the election of Parent. The number and nature of
Option Shares that may be received upon the exercise of the Option, and the
Exercise Price, are subject to adjustment as set forth herein. The Option may be
exercised from and after the date Company or its stockholders shall have
received in writing, or there shall have been publicly disclosed, an
"Acquisition Proposal" (as such term is defined in the Merger Agreement). The
Option shall terminate and be of no further force and effect upon the Expiration
Date.
Section 4. Exercise of Option. Parent may exercise the Option by delivery
of written notice of exercise (an "Exercise Notice") to the Stockholder with
respect to which the Option is being exercised (the "Called Stockholder"),
binding Parent to acquire the Called Stockholder's
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Option Shares on the terms set forth herein, signed by an officer of Parent, to
the Called Stockholder at the executive offices of Company in Campbell,
California, prior to the Expiration Date.
Section 5. Exercise Price. (a) The "Exercise Price" shall be $7.85, subject
to adjustment pursuant to this Section 5. In the event of any change in Option
Shares by reason of reclassification, recapitalization, stock split, split-up,
combination, exchange of shares, stock dividend, dividend, dividend payable in
any other securities, or any similar event, the type and number of Option Shares
or securities subject to the Option, and the Exercise Price therefor, shall be
adjusted appropriately, and proper provisions shall be made in the agreements
governing such transaction, so that Parent shall receive upon exercise of each
Option the number and class of shares or other securities or property that
Parent would have received in respect of Option Shares if such Option had been
exercised immediately prior to such event or the record date therefor.
(b) If the Merger shall occur, under the Merger Agreement as entered into
on the date hereof, at an "Exchange Price" (as such term is defined in the
Merger Agreement) less than $59.6063, and if any Option shall have been
exercised prior to the Merger, then Parent shall issue to each Stockholder with
respect to which the Option was exercised, promptly after the Merger, an
additional number of shares of Parent Stock (plus cash in lieu of fractional
shares) equal to the difference (the "Collar Difference") between (i) the number
of shares of Parent Stock (A) issued upon such exercise of the Option (if Parent
shall have elected to pay the Exercise Price in shares of Parent Stock) or (B)
derived by dividing the amount of cash received upon such exercise of the Option
(if Parent shall have elected to pay the Exercise Price in cash) by the Exchange
Price and (ii) the number of shares of Parent Stock to which such Stockholder
would have been entitled in respect of such Option Shares upon the Merger.
(c) If the Merger shall occur, under the Merger Agreement as entered into
on the date hereof, at an Exchange Price greater than $59.6063 and if any Option
shall have been exercised prior to the Merger, then each Stockholder with
respect to which the Option was exercised, promptly after the Merger, shall
deliver to Parent a number of shares of Parent Stock (plus cash in lieu of
fractional shares) equal to the Collar Difference, or, in the election of the
Stockholder, cash equal to the product of the Collar Difference times the
Exchange Price.
Section 6. Closing of Option. (a) The closing of each purchase and sale of
Option Shares (the "Closing") shall occur at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ in New York, New York, at 10 a.m. on the second business day following
the delivery of the Exercise Notice therefor.
(b) At each Closing, if Parent shall have elected to pay the Exercise Price
therefor in shares of Parent Stock ("Purchase Shares"), Parent shall deliver to
the Called Stockholder a certificate or certificates representing the Purchase
Shares to be delivered at such Closing, which Purchase Shares shall be free and
clear of all liens, charges or encumbrances ("Liens"), plus cash in lieu of
fractional shares, and the Called Stockholder shall deliver to Grantee a letter
agreeing that Issuer shall not offer to sell or otherwise dispose of such
Purchase Shares in violation of applicable law or the provisions of this
Agreement. The number of Purchase Shares issuable at such Closing
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shall be obtained by multiplying the number of Option Shares specified in the
Exercise Notice therefor by a fraction, of which the numerator shall be the
Exercise Price, and the denominator shall be price per share of Parent Common
Stock on the five trading days immediately preceding the date of the Exercise
Notice therefor.
(c) At each Closing, if Parent shall have elected to pay the Exercise Price
therefor in cash, Grantee shall pay to the Called Stockholder in immediately
available funds by wire transfer to a bank account designated by Issuer an
amount equal to the Exercise Price multiplied by the number of Option Shares to
be purchased at such Closing.
(d) At each Closing, simultaneously with the delivery of immediately
available funds as provided in Section 6(b) or Purchase Shares as provided in
Section 6(c), the Called Stockholder shall deliver to Parent a certificate or
certificates representing the Option Shares to be purchased at such closing,
which Option Shares shall be free and clear of all Liens, and Parent shall
deliver to the Called Stockholder a letter agreeing that Parent shall not offer
to sell or otherwise dispose of such Option Shares in violation of applicable
law or the provisions of this Agreement.
(e) Certificates for the Option Shares and Purchase Shares delivered at
each Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF AN INDUCEMENT AGREEMENT DATED AS OF MARCH __, 2000. A COPY OF
SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT
BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the issuer of such Shares
shall have received a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel in form and substance reasonably
satisfactory to such issuer and its counsel, to the effect that such legend is
not required for purposes of the Securities Act and (ii) the reference to
restrictions pursuant to this Agreement in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the Shares
evidenced by certificate(s) containing such reference have been sold or
transferred in compliance with the provisions of this Agreement under
circumstances that do not require the retention of such reference.
Section 7. Covenants of the Stockholders. Each Stockholder covenants and
agrees for the benefit of Parent that, until the Expiration Date, such
Stockholder will not:
(a) sell, transfer, pledge, hypothecate, encumber, assign, tender or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to
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the sale, transfer, pledge, hypothecation, encumbrance, assignment, tender or
other disposition of, any of his Company Shares or any interest therein;
(b) other than as expressly contemplated by this Agreement, grant any
powers of attorney or proxies or consents in respect of any of such
Stockholder's Company Shares, deposit any of such Company Shares into a voting
trust, enter into a voting agreement with respect to any of such Company Shares
or otherwise restrict or take any action adversely affecting the ability of such
Stockholder freely to exercise all voting rights with respect thereto; or
(c) except as permitted by the Merger Agreement, directly or indirectly
through his or her agents and representatives, initiate, solicit or encourage,
any inquiries or the making or implementation of any alternative proposal (an
"Alternative Proposal") to acquire the Company Shares or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Alternative Proposal, or
otherwise facilitate any effort or attempt to make or implement an Alternative
Proposal; and such Stockholder shall (i) immediately cease and cause to be
terminated any existing activities, including discussions or negotiations with
any parties, conducted heretofore with respect to any of the foregoing and will
take the necessary steps to inform his or her agents and representatives of the
obligations undertaken in this Section 7(c), and (ii) notify Parent immediately
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, him or her.
Section 8. Covenants of Parent. Parent covenants and agrees for the benefit
of the Stockholders that (a) immediately upon execution of this Agreement,
Parent shall enter into the Merger Agreement, and (b) until the Expiration Date,
it shall use all reasonable efforts to take, or cause to be taken, all action,
and do, or cause to be done, all things necessary or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
and the Merger Agreement, consistent with the terms and conditions of each such
agreement; provided, however, that nothing in this Section 8 or any other
provision of this Agreement is intended, nor shall it be construed, to limit or
in any way restrict Parent's right or ability to exercise any of its rights
under the Merger Agreement.
Section 9. Representations and Warranties of the Stockholders. Each
Stockholder represents and warrants to Parent that:
(a) the execution, delivery and performance by such Stockholder of this
Agreement will not conflict with, require a consent, waiver or approval under,
or result in a breach or default under, any of the terms of any contract,
commitment or other obligation (written or oral) to which such Stockholder is
bound;
(b) such Stockholder has full right, power and authority to enter into and
execute this Agreement and to perform his obligations hereunder;
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(c) this Agreement has been duly executed and delivered by such Stockholder
and constitutes a legal, valid and binding obligation of such Stockholder
enforceable against him in accordance with its terms;
(d) such Stockholder is the sole record and beneficial owner of, and has
the sole right to vote with respect to, the number of Company Shares set forth
opposite such Stockholder's name on Schedule A hereto, and such Company Shares
represent all shares of Company Common Stock of or with respect to which such
Stockholder is the sole owner or has the right to vote at the date hereof;
(e) except for the Company Shares listed on Schedule A hereto, such
Stockholder does not have any right to acquire, nor is he or she the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended) of, any other shares of any class of capital stock of
Company or any securities convertible into or exchangeable or exercisable for
any shares of any class of capital stock of Company (other than shares subject
to options or other rights granted by Company as set forth on Schedule B
hereto);
(f) such Stockholder's Company Shares are duly authorized, validly issued,
fully paid and non-assessable, and such Stockholder owns its Company Shares free
and clear of all Liens, other than as provided by this Agreement, and good and
valid title to its Company Shares, free and clear of any Lien, will pass to
Parent upon Closing or exercise of the Option granted pursuant to Section 4
hereof; and
(g) The Board of Directors of Company has approved the granting of the
Option to Parent.
The representations and warranties contained herein shall be made as of the
date hereof and as of the Closing.
Section 10. Representations and Warranties of Parent. Parent represents and
warrants to the Stockholders that:
(a) It has all requisite corporate power and authority to enter into and
perform all of its obligations under this Agreement;
(b) The execution, delivery and performance of this Agreement by it and all
transactions contemplated hereby have been duly authorized by all necessary
corporate action on its part, and this Agreement constitutes the legal, valid
and binding contract of Parent enforceable against it in accordance with its
terms;
(c) Parent will not acquire the Option Shares with a view to the
distribution thereof as that term is used in the Securities Act of 1933; and
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(d) The Purchase Shares issuable hereunder, when issued to a Called
Stockholder in accordance with Section 6(b) hereof, will be duly authorized,
validly issued, fully paid and non-assessable shares of common stock of Parent,
and good and valid title to such shares of Parent Stock, free and clear of any
Encumbrance, will pass to the Stockholders upon exercise of the Option.
The representations and warranties contained herein shall be made as of the
date hereof and as of the Closing.
Section 10. Adjustments; Additional Shares. In the event of any stock
dividend, stock split, merger (other than the Merger), recapitalization,
reclassification, combination, exchange of shares or the like of the capital
stock of Company on, of or affecting the Company Common Stock then the terms of
this Agreement shall apply to the shares of capital stock or other instruments
or documents that the Stockholders own or have the right to vote immediately
following the effectiveness of such event as though they were Shares hereunder.
Section 11. Registration Rights. If Parent shall have elected to pay the
Exercise Price for the purchase of any Option Shares in Purchase Shares, Parent
shall, as expeditiously as reasonably possible after the Closing therefor,
prepare and file a registration statement under the Securities Act if such
registration is necessary in order to permit the sale or other disposition of
any or all such Purchase Shares in accordance with the intended method of sale
or other disposition stated by the holder of such Purchase Shares, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision, and Parent shall use all reasonable efforts to list such
Purchase Shares on the New York Stock Exchange and to qualify such Purchase
Shares under any applicable state securities laws. Parent shall use all
reasonable efforts to cause such registration statement to become effective, to
obtain all consents or waivers of other parties which are required therefor and
to keep such registration statement effective for such period at least 90 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. The obligations
of Parent hereunder to file a registration statement and to maintain its
effectiveness may be suspended for a period of time not exceeding 90 days in the
aggregate if the Board of Directors of Parent shall have determined in good
faith that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect Parent (but in no event shall Parent exercise
such postponement right more than once in any 12-month period). Any registration
statement prepared and filed under this Section 11, and any sale covered
thereby, shall be at Parent's expense except for underwriting discounts or
commissions, brokers' fees and the reasonable fees and disbursements of counsel
to the Purchase Share holders. The Purchase Share holders shall provide all
information reasonably requested by Parent for inclusion in any registration
statement to be filed hereunder. In connection with any registration pursuant to
this Section 11, Parent and the Purchase Share holders shall provide each other
and any underwriter of the offering with customary representations, warranties,
covenants, indemnification and contribution in connection with such
registration.
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Section 12. Specific Performance. The parties hereto agree that the Shares
are unique and that money damages are an inadequate remedy for breach of this
Agreement because of the difficulty of ascertaining the amount of damage that
will be suffered by Parent in the event that this Agreement is breached.
Therefore, each of the Stockholders agrees that in addition to and not in lieu
of any other remedies available in Parent at law or in equity, Parent may obtain
specific performance of this Agreement.
Section 13. Assignment. Parent's rights and obligations under this
Agreement may not be assigned without the consent of each affected Stockholder,
except that Parent may assign the same to any of its direct or indirect
wholly-owned subsidiaries upon delivery of written notice of such assignment to
such affected Stockholder(s).
Section 14. Amendments. Amendment or waiver of any provision of this
Agreement or consent to departure therefrom shall be effective unless in writing
and signed by Parent and all affected Stockholders, in the case of an amendment,
or by the party which is the beneficiary of any such provision, in the case of a
waiver or a consent to depart therefrom.
Section 15. Notices. Any notices or other communications hereunder shall be
in writing and shall be deemed to have bee duly given (and shall be deemed to
have been duly received if so given) if personally delivered or sent by
telecopier or by registered or certified mail, postage paid, addressed to the
respective parties as follows:
If to Parent:
Avnet, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
If to a Stockholder:
To the address listed on the signature page hereof
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with a copy to:
Pillsbury Madison & Sutro LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ del ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
Section 16. Miscellaneous. All references herein to time shall mean New
York, New York time. All amounts payable hereunder are in United States Dollars.
Section 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Delaware, without regard to the conflict of laws principles thereof.
Section 18. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, personal
representatives, executors, heirs and permitted assigns.
Section 19. Headings. The Section headings herein are for convenience of
reference only and shall not affect the construction hereof.
Section 20. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, Parent and each of the Stockholders have duly executed
this Agreement as of the date and year first above written.
AVNET, INC.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
and Chief Financial Officer
/s/P. ▇▇▇▇▇ ▇▇▇▇▇
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P. ▇▇▇▇▇ ▇▇▇▇▇
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