exv4w3






 




    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, Hirsch Electronics Corporation, a California
    corporation (“Hirsch”), Deer Acquisition, Inc.,
    a California corporation and a wholly owned subsidiary of the
    Company, and Hart Acquisition LLC, a Delaware limited liability
    company and a wholly owned subsidiary of the Company, pursuant
    to which through a two-step merger Hirsch 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 Hirsch
    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) Hirsch 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
    Hirsch 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 Hirsch
    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.”



 



    “‘Hart Merger Sub’ shall mean Hart
    Acquisition LLC, a Delaware limited liability company and a
    wholly owned subsidiary of the Company.”



 



    “‘Hirsch’ shall mean Hirsch, a California
    corporation.”



 



    “‘Merger Agreement’ shall mean the
    Agreement and Plan of Merger, by and among the Company, Hirsch,
    Deer Merger Sub and Hart Merger Sub, pursuant to which through a
    two-step merger Hirsch 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 Hirsch
    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) Hirsch 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/  Felix
    Marx









    Felix Marx




    Chief Executive Officer



 



    AMERICAN STOCK TRANSFER & TRUST

    COMPANY



 


			
	 	    By: 
	
    /s/  Herbert
    J. Lemmer









    Name:     Herbert J. Lemmer



			
	 	    Title: 
	
    Vice President




 




    [Signature
    Page to Amendment to Rights Agreement]