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Exhibit 2.4
DATED 10TH AUGUST, 2000
FLEXTRONICS INTERNATIONAL LTD.
JIT HOLDINGS LIMITED
GOH THIAM POH TOMMIE
AND
GOH MUI TECK WILLIAM
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MERGER AGREEMENT
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ALLEN & GLEDHILL
36, ROBINSON ROAD, #18-01,
CITY HOUSE,
SINGAPORE 068877.
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CONTENTS
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CLAUSE CONTENTS PAGE
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1. INTERPRETATION 1
2. THE MERGER 5
3. CONDITIONS 5
4. CONSIDERATION 6
5. UNDERTAKINGS 7
6. MAJOR SHAREHOLDERS' IRREVOCABLE UNDERTAKINGS 11
7. WARRANTIES 11
8. ANNOUNCEMENTS 12
9. MISCELLANEOUS 13
10. TERMINATION 15
11. GOVERNING LAW 15
APPENDIX - FORM OF ANNOUNCEMENT 17
SCHEDULE 1 - SHARES TO WHICH THIS AGREEMENT
RELATES 23
SCHEDULE 2 - NON-COMPETITION COVENANTS 24
SCHEDULE 3 - AFFILIATES AGREEMENT 26
SCHEDULE 4 - SCHEME DOCUMENT 30
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T H I S A G R E E M E N T is made on 10th August, 2000 B E T W E E N:-
(1) FLEXTRONICS INTERNATIONAL LTD. whose registered office is at 36 Robinson
Road, #18-01, City House, Singapore 06877("FLEX");
(2) JIT HOLDINGS LIMITED whose registered office is at 1 Kallang Way,
Singapore 339211 ("JIT"); and
(3) GOH THIAM POH TOMMIE of 3 Sunset Crescent, Singapore 597492 ("GTP"); and
(4) GOH MUI TECK WILLIAM of 90 Cheng Soon Garden, Singapore 599862 ("GMT").
W H E R E A S:-
(A) JIT is a public company limited by shares incorporated in Singapore
under the Companies Act (as defined below) and is listed on the
Singapore Exchange Securities Trading Limited. As at the date of this
Agreement, JIT has an authorised share capital of S$50,000,000 divided
into 500,000,000 ordinary shares of S$0.10 each, of which 249,257,110 of
the said ordinary shares have been issued and are fully paid-up.
(B) FLEX is a public company limited by shares incorporated in Singapore
under the Companies Act and is listed on NASDAQ. As at the date of this
Agreement, FLEX has an authorised share capital of S$2,500,000 divided
into 250,000,000 ordinary shares of S$0.01 each of which 200,245,081 of
the said ordinary shares have been issued and are fully paid-up.
(C) The Corporate Parties (as defined below) propose to merge their
companies so that JIT becomes a wholly-owned subsidiary of FLEX and have
entered into this Agreement with a view to setting out their
understanding and agreement on the manner in which the Merger (as
defined below) will be effected. The Major Shareholders (as defined
below) wish to vote in favour of the Scheme (as defined below) and
undertake to do so on the terms of this Agreement.
I T I S A G R E E D AS FOLLOWS:-
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the context otherwise requires:-
"Announcement" means the announcement (substantially in the form of the
Appendix) by JIT of the proposed Merger, to be released on the
Announcement Date;
"Announcement Date" means the date of this Agreement;
"Business Day" means a day (excluding Saturdays, Sundays and public
holidays) on which commercial banks are open for business in Singapore;
"Companies Act" means the Companies Act, Chapter 50 of Singapore;
"Completion Conditions" means the conditions to the completion of the
Merger, as set out in Clause 3.2;
"Conditions Long-Stop Date" means 31 March 2001 (or such other date as
the Corporate
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Parties may agree);
"Corporate Parties" means FLEX and JIT, and "Corporate Party" means
either one of them;
"Court" means the High Court of Singapore;
"Court Meeting" means the meeting of the Scheme Shareholders to be
convened by the Court to approve the Scheme;
"Court Order" means the order of the Court sanctioning the Scheme under
Section 210 of the Companies Act and confirming the cancellation of the
JIT Shares by way of a capital reduction under Section 73 of the
Companies Act;
"deal with", in relation to shares, includes any of the following:
offering to sell, contracting to sell, selling any option or contracting
to sell any option, granting an option, right or warrant to purchase any
shares or any securities convertible into or exercisable or exchangeable
for shares or by entering into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the shares (however such transaction is to
be settled);
"EGM" means the extraordinary general meeting of JIT to be held to
approve the Merger, the cancellation of the JIT Shares, the issue of the
New JIT Shares and all other matters necessary to effect the Merger;
"Encumbrance" means any charge, mortgage, lien, hypothecation, judgment,
encumbrance, easement, security, title retention, preferential right,
trust arrangement or any other security interest or any other agreement
or arrangement having a commercial effect analogous to the conferring of
security or similar right in favour of any person;
"FLEX Shares" means ordinary shares of S$0.01 each in the capital of
FLEX;
"JIT Group" has the meaning ascribed to it in Clause 5.2(f);
"JIT Shares" means ordinary shares of S$0.10 each in the capital of JIT;
"Key Executives" has the meaning ascribed to it in Clause 5.2(l);
"Listing Rules" means the listing rules of the SGX-ST;
"Major Shareholders" means GTP and GMT, and "Major Shareholder" means
either one of them;
"Merger" means the merger of FLEX and JIT to be effected by way of the
Scheme and on the terms and subject to the conditions set out in this
Agreement;
"Merger Conditions" means the conditions to the Scheme, as set out in
Clause 3.1;
"Merger Date" means the date on which the Scheme becomes effective in
accordance with its terms;
"NASDAQ" means National Association of Securities Dealers Automated
Quotation System;
"New FLEX Shares" means new FLEX Shares to be issued in connection with
the Merger;
"New JIT Shares" means new JIT Shares to be issued in connection with
the Merger;
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"Parties" means JIT, FLEX,GTP and GMT, and "Party" means any one of
them;
"Relevant Date" means 5 p.m. (Singapore time) on the date immediately
preceding the Merger Date;
"ROC" means the Registry of Companies and Businesses in Singapore;
"Share Exchange Ratio" means the Share Exchange Ratio as defined in the
Announcement;
"Scheme" means the scheme of arrangement to be proposed by JIT to the
Scheme Shareholders pursuant to Section 210 of the Companies Act to
effect the Merger, reflecting the terms of the Scheme set out in this
Agreement and in terms agreed by the Corporate Parties and in the form
substantially set out in Schedule 4;
"Scheme Document" means the document to be sent to the Scheme
Shareholders in connection with the implementation of the Merger, which
will contain, inter alia, details of the Scheme in terms agreed by the
Corporate Parties;
"Scheme Shares" means the JIT Shares held by the JIT Shareholders;
"Scheme Shareholders" means the JIT Shareholders;
"SGX-ST" means Singapore Exchange Securities Trading Limited;
"Singapore Dollars" and the symbol "S$" mean the lawful currency of
Singapore; and
"US Dollars" and the symbol "US$" mean United States dollars.
1.2 Modification of Statutes: Any reference in this Agreement to a statutory
provision shall include that provision and any regulations made in
pursuance thereof as from time to time modified or re-enacted, whether
before or after the date of this Agreement, so far as such modification
or re-enactment applies or is capable of applying to any transactions
entered into and (so far as liability thereunder may exist or can arise)
shall include also any past statutory provision or regulation (as from
time to time modified or re-enacted) which such provision or regulation
has directly or indirectly replaced.
1.3 Companies Act: The words "subsidiary", "company" and "corporation" shall
have the same meanings in this Agreement as their respective definitions
in the Companies Act.
1.4 Miscellaneous: The headings in this Agreement are inserted for
convenience only and shall be ignored in construing this Agreement.
Unless the context otherwise requires, words (including words defined in
this Agreement) denoting the singular number only shall include the
plural and vice versa. The words "written" and "in writing" include any
means of visible reproduction. References to the "Appendix", "Clauses"
and "Schedules" and "Recitals" are to the appendix to, clauses of,
schedules and recitals to this Agreement.
2. THE MERGER
2.1 Merger by way of the Scheme. The Corporate Parties agree that the
Merger shall be effected by way of the Scheme which will involve, inter
alia, the cancellation of the JIT Shares and the application of the
resultant reserve in payment in full at par for New JIT Shares
equivalent in number to the JIT Shares as are cancelled, such New JIT
Shares to be issued to FLEX or its
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nominee,credited as fully paid, and the allotment and issue by FLEX to
the Scheme Shareholders of New FLEX Shares in the proportion of the
Share Exchange Ratio based on the number of Scheme Shares held by the
Scheme Shareholders as of the Relevant Date.
2.2 Effective Date of the Scheme. The Corporate Parties agree that, subject
to the fulfilment of all the Merger Conditions and, unless waived by
FLEX in respect of any or all of the Completion Conditions, the
registration of a copy of the Court Order with the ROC to give effect to
the Scheme in accordance with its terms shall take place on 30th
November, 2000 or if the Court Order is granted after 30th November,
2000, on 28th February, 2001 or such other date as FLEX and JIT may
agree.
3. CONDITIONS
3.1 Merger Conditions. The Corporate Parties agree that the completion of
the Merger shall be conditional upon the following:-
(a) Regulatory Approvals: the receipt of all applicable regulatory
approvals and such approvals not being revoked on or before the
Merger Date;
(b) Court Meetings: the approval of the Scheme by the Scheme
Shareholders at the Court Meeting in compliance with Section 210
of the Companies Act;
(c) EGM: the passing of the resolutions by the Scheme Shareholders to
approve (i) the Scheme, (ii) the cancellation of the JIT Shares
by way of a capital reduction, (iii) the allotment and issue of
the New JIT Shares to FLEX or its nominee and (iv) all other
matters necessary to effect the Merger by the JIT Shareholders at
the EGM;
(d) Court Sanction: the sanction of the Scheme by the Court;
(e) ROC Registration: the registration of the Court Order with ROC;
and
(f) No Termination: this Agreement not having been terminated
pursuant to Clause 10.1,
on or prior to the Conditions Long-Stop Date.
3.2 Completion Conditions. The Corporate Parties agree that the completion
of the Merger on the Merger Date shall be conditional upon the
following, unless all or any of such conditions is waived by FLEX:-
(a) no occurrence, on or before the Merger Date, of any adverse
change in the JIT Group's assets, employee base or business since
31st March, 2000 that is material to the JIT Group as a whole;
(b) no discovery, on or before the Merger Date, of any material
inaccuracy in any information or financial statements issued or
made publicly known by JIT to comply with the laws of Singapore
or the Listing Rules; and
(c) no facts or circumstances shall exist that will prevent the
Merger from being accounted for as a pooling of interest under
the generally accepted accounting principles of the United States
of America.
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3.3 Conditions to Approval. Each Corporate Party agrees that:-
(a) where any approval or consent which is required to be obtained by
it is granted subject to any condition, such condition must be
reasonably acceptable to the Corporate Party on which such
condition is imposed or applied; and
(b) where any condition imposed or applied is required to be
fulfilled by a particular date, such condition is so fulfilled,
failing which each Corporate Party agrees that the condition precedent
in question shall not be deemed to have been fulfilled (unless waived by
the Corporate Parties in writing). The Corporate Parties agree that in
the case of any approval or consent falling under paragraph (a) above,
the Corporate Party affected by the conditions imposed or applied in
granting such approval or consent shall be deemed to have found the same
reasonably acceptable unless it notifies the other Corporate Party in
writing to the contrary within seven Business Days of the receipt of the
relevant approval or consent.
3.4 Non-fulfilment of Conditions. The Corporate Parties agree that, if for
any reason the Merger Conditions are not satisfied (or waived) on or
prior to the Conditions Long-Stop Date or the Completion Conditions are
not satisfied (or waived) on the Merger Date, this Agreement shall,
unless otherwise agreed in writing between the Corporate Parties,
automatically terminate, and no Party shall have claim against any Party
under this Agreement for costs, damages, compensation or otherwise save
in respect of any claim relating to a breach by any Party prior to the
date of termination of this Agreement.
4. CONSIDERATION
4.1 New FLEX Shares. Subject to the Scheme becoming effective, FLEX shall
allot and issue to each Scheme Shareholder New FLEX Shares in accordance
with the Share Exchange Ratio based on the number of Scheme Shares held
by such Scheme Shareholder as of the Relevant Date. The actual number of
New FLEX Shares which a Scheme Shareholder will be entitled to receive
shall be calculated such that any resultant fraction of a New FLEX Share
shall be disregarded.
4.2 Ranking of New FLEX Shares. The New FLEX Shares shall be duly
authorised, validly issued, credited as fully paid and free from any
Encumbrance. The New FLEX Shares shall rank pari passu in all respects
with the ordinary shares of S$0.01 each in the capital of FLEX then in
issue, including the right to receive and retain any dividends and other
distributions declared, made or paid after the Merger Date.
4.3 New JIT Shares. Subject to the Scheme becoming effective, JIT shall
allot and issue to FLEX or its nominee one New JIT Share for every
Scheme Share cancelled pursuant to the Scheme. The New JIT Shares shall
be duly authorised, validly issued, credited as fully paid and free from
any Encumbrance. The New JIT Shares shall rank pari passu in all
respects with the Scheme Shares which were cancelled pursuant to the
Scheme, including the right to receive and retain any dividends and
other distributions declared, made or paid after the Merger Date.
5. UNDERTAKINGS
5.1 Effective Date of Undertakings. Each undertaking given pursuant to this
Clause shall, unless otherwise stated, be effective from the date of
this Agreement until the earlier of the Merger Date or the date on which
this Agreement is terminated pursuant to Clause 10.
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5.2 JIT Undertakings. Subject as provided in this Clause, JIT hereby
irrevocably undertakes with FLEX that:-
(a) Provision of Information: it will use best endeavours to provide
all such information as FLEX may reasonably require (but subject
to any binding confidentiality restrictions) and otherwise to
assist FLEX to effect the Merger;
(b) Preparation of Scheme Document: it will use best endeavours as
soon as reasonably practicable to prepare, file and circulate the
Scheme Document and all documents which are required to be
prepared, filed and circulated by it in connection with the
Scheme and the Merger and to carry into effect this Agreement;
(c) Directors' Recommendation: it will use best endeavours to procure
that its directors will recommend to its shareholders to vote in
favour of the Merger and the Scheme at the Court Meeting and the
EGM;
(d) Allotment of New JIT Shares: it will be bound by the Scheme, and
allot and issue the New JIT Shares pursuant to the Scheme on the
terms set out in this Agreement;
(e) Implementation of the Scheme: it will take all steps required to
be taken by it in relation to the Scheme and will use all best
endeavours to procure that the Scheme is implemented on the terms
set out in this Agreement and to be set out in the Scheme
Document, including, without limitation, (i) seeking the urgent
dates for the relevant Court hearings, (ii) despatching the
Scheme Document and appropriate forms of proxy for use at the
Court Meeting and EGM promptly following approval thereof (where
required) by the Court to all of its shareholders, (iii) in the
event of the Merger being approved by the requisite majority at
the Court Meeting, and the requisite majority at the EGM,
promptly applying to the Court for, and diligently seeking its
sanction of, the Scheme and (iv) in the event of the Court Order
being obtained, promptly delivering the same to the ROC for
registration as contemplated by this Agreement;
(f) Authorisations: it will obtain all authorisations, consents,
clearances, permissions and approvals as are within its control
or influence and which are necessary or appropriate for or in
respect of the implementation of the Scheme and the Merger and
the resulting change of ownership of JIT and its subsidiaries
(the "JIT Group"), so as to ensure that as a result of the Scheme
and the Merger or its implementation:-
(i) no moneys borrowed by, and no indebtedness (actual or
contingent) of, any member of the JIT Group are or become
repayable or capable of being declared repayable
immediately or earlier than the stated repayment date and
the ability of any such member to borrow moneys or incur
any indebtedness is not withdrawn or inhibited;
(ii) no agreement, arrangement, licence, permit, franchise or
other instrument which benefits any member of the JIT
Group and which is material to the business of the JIT
Group taken as a whole is terminated or materially
adversely modified and no additional material obligation
or liability arises or any action is taken or arises
thereunder which prejudices any member of the JIT Group;
(iii) no interest or business of any member of the JIT Group in
or with any other person, firm, company or body (or any
arrangements relating to such interest or business) which
is material to the business of the JIT Group taken as a
whole is terminated or materially and adversely modified
or affected;
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(iv) no asset of any member of the JIT Group which is material
to the business of the JIT Group taken as a whole is or
falls to be disposed of or charged and no right arises
under which any such asset or interest could be required
to be disposed of or charged; and
(v) no security interest over any part of the business,
property or assets of any member of the JIT Group becomes
enforceable,
provided that JIT will not be obliged to undertake any action in
respect of the implementation of the Scheme or the Merger which
may result in a breach of any applicable law or regulation;
(g) No Dividend or Distribution: it will not:-
(i) save for the dividend declared on 2nd June, 2000 in
respect of the financial year ended 31st March, 2000,
declare or pay any dividend or make any distribution (in
cash or in kind) to its shareholders; or
(ii) save for the New JIT Shares and any issue of New JIT
Shares pursuant to the exercise of options granted under
the JIT Employee Share Option Scheme, create, allot or
issue any shares or other securities convertible into
shares, or create, issue or grant any option or right to
subscribe in respect of any of its share capital, or agree
to do any of the foregoing;
(h) No Material Disposal: it will not, and will procure that no
member of the JIT Group will, except as would not be material in
the context of the JIT Group taken as a whole:-
(i) dispose of any assets, including shares or other interests
in any member of the JIT Group or in any other entity in
which it has an interest, or voluntarily assume or incur
any liabilities (including contingent liabilities), in
each case otherwise than in the ordinary and normal course
of business of JIT; or
(ii) carry on its business in any respect otherwise than in the
ordinary course and normal and so as to maintain the same
as a going concern.
(i) No Action: it will take no action which may be prejudicial to the
successful completion of the Merger;
(j) No Solicitation: it will:-
(i) not, and will procure that no member of the JIT Group
will, solicit or entertain approaches or enter into
discussions regarding any general offer for the JIT Shares
or any other class of shares in JIT from any third party
or any proposal for a merger of JIT with any other entity
or any proposal for a sale of any shares or (other than in
the ordinary and normal course of business) assets of JIT
or the JIT Group or any other transaction which would
preclude or materially prejudice the Merger;
(ii) notify FLEX of the details of any approach by any third
party made either to JIT or any member of the JIT Group
with a view to the making of any such offer, merger or
sale and also of any such solicitations or discussions
upon becoming aware of the relevant matter; and
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(iii) confer upon FLEX an exclusive right to complete the
Merger;
(k) Notification of Circumstance: it will notify FLEX of any matter
or circumstance which might cause or result in any of the Merger
Conditions or Completion Conditions to be unfulfilled or
incapable of fulfilment as soon as possible after becoming aware
of it and, on request from time to time, to confirm to FLEX in
writing that there are no such matters or circumstances of which
it is aware (other than as previously notified);
(l) Key Executives: it will procure the execution of service
contracts, on terms to be agreed between the Corporate Parties,
with JIT within ten Business Days from the date hereof by Goh
Thiam Poh Tommie, Goh Mui Teck William, Peter Tan and Gay Chee
Cheong (collectively, the "Key Executives"), such service
contracts to contain non-competition covenants which are set out
in Schedule 2;
(m) Affiliates Agreement: it will procure the execution of the
affiliates agreement in the form set out in Schedule 3 by each
director of JIT, each Major Shareholder and each Key Executive,
within ten Business Days from the date hereof;
(n) Preparation of Documents: it will co-operate fully with FLEX and
to use best endeavours in the preparation of the Scheme Document,
and other documents required to effect the Merger;
(o) Directors' Responsibility: it will use its best endeavours to
procure that its directors will take responsibility for the
information in the Scheme Document concerning JIT and its
directors as required by applicable law and regulation;
(p) Fulfilment of Conditions: it will use its best endeavours to
procure the fulfilment of each of the Merger Conditions and
Completion Conditions as are within its control or influence and
to promptly notify FLEX (and supply all relevant information) of
any event or circumstance of which it becomes aware which would
be likely to have a significant impact on the fulfilment of such
conditions; and
(q) Normal Dealing: it will and will procure each member of the JIT
Group:-
(i) to conduct its business in the ordinary course and not to
enter into any transaction or agreement or take any action
other than in the ordinary course and in a reasonable and
prudent manner, consistent with past practices;
(ii) to use all reasonable efforts to preserve its existing
relationships with its employees, customers, suppliers and
the like;
(iii) to use all reasonable efforts to preserve and protect its
properties and assets;
(iv) to enter into any extraordinary transactions nor issue nor
grant any securities (other than upon the exercise of
currently outstanding stock options) or any rights,
options, warrants or debt convertible into or exercisable
or exchangeable for any securities;
(v) not to change the terms (including, without limitation,
acceleration of vesting) of any outstanding shares options
under JIT Employee Share Option Scheme;
(vi) not to incur any liabilities other than in the ordinary
course of business, consistent with past practises; and
(vii) not to enter into or vary any material commitments or
obligations (including,
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without limitation, agreeing or otherwise committing with
any third party to license or develop any material
technology or to sell, purchase or lease any material
property or asset) or any agreement with any director of
JIT, any Major Shareholder or any Key Executive without
the prior written consent of FLEX.
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6. MAJOR SHAREHOLDERS' IRREVOCABLE UNDERTAKINGS
6.1 Voting in favour of the Scheme. The Major Shareholders jointly and
severally and irrevocably and unconditionally undertake to FLEX to vote
in favour of the Scheme at the Court Meeting and the EGM, in respect
of:-
(a) the JIT Shares listed in Schedule 1 to this Agreement;
(b) any other JIT Shares of which the Major Shareholders may
hereafter become the owner or in which any of them may become so
interested; and
(c) any other JIT Shares deriving from Shares falling within either
of Clauses 6.1(a) and 6.1(b) above (such JIT Shares together with
JIT Shares falling within those clauses being referred to below
as the "Subject Shares").
6.2 Dealings with Shares. The Major Shareholders jointly and severally and
irrevocably and unconditionally undertake to FLEX that for a period of
nine months from the date of this Agreement:-
(a) that they will not dispose of or create any Encumbrance or grant
any option or other right over or otherwise deal with or dispose
of any of the Subject Shares or any interest therein (whether
conditionally or unconditionally) except that they may transfer
the Subject Shares to any third party who agrees to be bound by
the terms of the Major Shareholders' obligations under this
Agreement;
(b) that they will exercise all voting rights attaching to the
Subject Shares in such manner as to enable the Merger to become
effective and to oppose the taking of any action which might
result in the Merger not becoming effective;
(c) that if any Major Shareholder receives or negotiates any firm
proposal from or with any independent third party regarding the
sale of any of the New FLEX Shares issued to him pursuant to the
Scheme (the "Relevant Shares"), it will as soon as practicable
notify FLEX of the terms of the proposal, the number of Relevant
Shares to which it relates and the total number of Relevant
Shares continuing to be held by that Major Shareholder); and
(d) that they will not enter into any agreement or arrangement with
any person, whether conditionally or unconditionally, to do any
of the acts prohibited by this Clause 6.2.
6.3 Major Shareholders' Warranties and Undertakings. The Major Shareholders
jointly and severally warrant and represent to FLEX that the Subject
Shares include all the JIT Shares which are beneficially owned by the
Major Shareholders as at the date hereof, and such warranties and
undertakings shall not be extinguished or affected by the completion of
the Merger.
7. WARRANTIES
7.1 Corporate Parties. Each Corporate Party warrants to the other Corporate
Party in the following terms:-
(a) Due incorporation: it is a company duly incorporated and validly
existing under the laws of Singapore and has the power and
authority to conduct the business which it conducts and/or
proposes to conduct and to own, lease and operate its property
and
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other assets;
(b) Capacity: it has the power to enter into, exercise its rights and
perform and comply with its obligations under this Agreement;
(c) Enforceability: its obligations under this Agreement are valid,
binding and enforceable in accordance with its terms; and
(d) Execution: the execution and delivery of, and the performance by
it of its obligations under, this Agreement will not:-
(i) result in a breach of any provision of its memorandum or
articles of association or any agreement to which it or
any of its subsidiaries is a party; and
(ii) result in a breach of any order, judgment or decree of any
court, governmental agency or regulatory body to which it
or any of its subsidiaries is a party or is bound.
7.2 Major Shareholders. The Major Shareholders jointly and severally warrant
and represent to FLEX in the following terms:-
(a) Capacity: they have the power and legal capacity to enter into,
exercise their rights and perform and comply with their
obligations under this Agreement;
(b) Enforceability: their obligations under this Agreement are valid,
binding and enforceable in accordance with its terms; and
(c) Execution: the execution and delivery of, and the performance by
them of their obligations under this Agreement will not result in
a breach of any order, judgement or decree of any court,
governmental agency or regulatory body to which they are bound.
8. ANNOUNCEMENTS
8.1 Initial Announcement. The Corporate Parties agree that the Announcement
shall be released by FLEX and JIT to the SGX-ST at 5.00 p.m. (Singapore
time) (or such other time as the Corporate Parties may agree) on the
Announcement Date.
8.2 Further Announcements. No Corporate Party shall make any further
announcement concerning this Agreement, the Merger or the Scheme except
as required by law or the Listing Rules or the rules of NASDAQ or other
regulatory body or the Court or with the prior approval of the other
Corporate Party (such approval not to be unreasonably withheld or
delayed). Pending the Scheme becoming effective, the Corporate Parties
shall, subject to the requirements of any law or regulation (including,
without limitation, the Listing Rules and the rules of NASDAQ), consult
together as to the terms of, the timetable for and manner of publication
of, any formal announcement or circular to shareholders, employees and
to any recognised stock exchange or other authorities or to the media or
otherwise which any Corporate Party may desire or be obliged to make
regarding the Merger or the Scheme and each Corporate Party will consult
with the other Corporate Party regarding any other announcement which is
or may be material in the context of the Merger. Any other communication
which any Corporate Party may make concerning the foregoing matters
shall, subject to the requirements of any law or regulation (including,
without limitation, the Listing Rules or the rules of NASDAQ), be
consistent with any such formal announcement or circular as aforesaid.
Neither Major Shareholder shall divulge any information regarding the
Merger
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which may have not been made known by the Corporate Parties. Neither
Major Shareholder should make any announcement regarding the Merger. The
Major Shareholders hereby consent to the disclosure of all references to
them and the terms of their undertakings and obligations hereunder by
the Corporate Parties.
9. MISCELLANEOUS
9.1 Successors and Assigns. This Agreement shall be binding on and shall
enure for the benefit of the Parties and their respective successors and
assigns. Any reference in this Agreement to any of the Parties shall be
construed accordingly. The Parties agree that the benefit of any
provision of this Agreement may not be assigned by any Party without the
consent of the other Parties.
9.2 Variation. No variation of this Agreement shall be effective unless
agreed to by the Parties in writing and signed by or on behalf of each
Party.
9.3 Time of the Essence. Time shall be of the essence of this Agreement,
both as regards the dates and periods mentioned and as regards any dates
and periods which may be substituted for them in accordance with this
Agreement or by agreement in writing between the Parties.
9.4 Costs. The Parties shall bear their respective fees, costs and expenses
incurred in connection with this Agreement. Any legal, accounting,
investment banker or other fees or costs incurred by JIT in connection
with the Scheme in excess of US$200,000 shall be borne by the Major
Shareholders.
9.5 Entire Agreement. This Agreement and any other documents delivered
pursuant to this Agreement (a) contain the entire agreement of the
Parties with respect to the subject matter hereof and (b) supercede all
prior agreements, arrangements, understanding, promises, covenants,
representations and communications between the Parties, whether written
or oral, with respect to the subject matter hereof.
9.6 Release, Indulgence and Waiver. Any liability to a Party under this
Agreement may in whole or in part be released, compounded or
compromised, or time or indulgence given, by that Party in its absolute
discretion as regards the Party under such liability without in any way
prejudicing or affecting its rights against the other Party under the
same or a like liability. No failure of any party to exercise, and no
delay by it in exercising, any right, power or remedy in connection with
this Agreement (each a "Right") will operate as a waiver thereof, nor
will any single or partial exercise of any Right preclude any other or
further exercise of such Right or the exercise of any other Right.
9.7 Further Assurance. At any time after the date of this Agreement, each
Party shall, and shall use all reasonable endeavours to procure that any
necessary third party shall, execute such documents and do such acts and
things as may be reasonably required for the purpose of giving effect to
the provisions of this Agreement.
9.8 Invalidity. If any provision in this Agreement shall be held to be
illegal, invalid or unenforceable, in whole or in part, under any
enactment or rule of law, such provision or part shall to that extent be
deemed not to form part of this Agreement but the legality, validity and
enforceability of the remainder of this Agreement shall not be affected.
9.9 Confidentiality. Subject to Clause 8, each Party undertakes to keep
confidential, and shall not disclose to any person (except to its
professional advisers), the existence of this Agreement or any
information relating to the terms of or the transactions contemplated by
this Agreement, unless and to the extent required by any applicable law
or regulation, without the
<PAGE> 15
15
prior written consent of the other Party (such consent not to be
unreasonably withheld).
9.10 Notices. All notices, demands or other communications required or
permitted to be given or made under or in connection with this Agreement
shall be in writing and delivered personally or sent by prepaid
registered post or by fax addressed to the intended recipient thereof at
its or his address, fax number and marked for the attention of such
person (if any), set out against its name below (or to such other
address, fax number as such Party may from time to time notify the
others). Any such notice, demand or communication shall be deemed to
have been duly served (if given or made by fax) immediately or (if given
or made by letter) immediately if hand delivered or seven Business Days
after posting and in proving the same it shall be sufficient to show
that the envelope containing the same was duly addressed, stamped and
posted.
FLEX:- 8th Floor, Hale Weal Industrial Building
22-28 Tai Chung Road
Tsuen Wan, N.T., Hong Kong
Attention : Ash Bhardwaj
Fax No. : 852 2840 4490
Copy to : 2090 Fortune Drive
San Jose, CA 95131
Attention : Tom Smach
Fax No. :
JIT:- 2 Changi South Lane
Singapore 486123
Attention : Goh Thiam Poh Tommie
Fax No. : 299 2981
GTP:- 3 Sunset Cresent,
Singapore 597492
Fax No. : -
GMT:- 90 Cheng Soon Garden
Singapore 599862
Fax No. : -
9.11 Equitable Remedies. Without prejudice to any other rights or remedies a
Party may have, the Parties each acknowledge and agree that damages may
not be an adequate remedy for any breach of this Agreement and the
Parties shall be entitled to the remedies of injunction, specific
performance and other equitable relief (but for the avoidance of doubt
no right of rescission or, unless expressly permitted, termination) for
any threatened or actual breach of this Agreement. For the avoidance of
doubt, nothing in this Clause shall affect FLEX's right to waive any of
the Completion Conditions.
10. TERMINATION
<PAGE> 16
16
10.1 Termination by Consent or Notice. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated as
follows:-
(a) by the mutual written consent of all the Parties; or
(b) if there shall have been a material breach by any Party of its or
his obligations under this Agreement, by the Party not in default
and having the benefit of such obligations by 14 days written
notice.
10.2 Termination without Prejudice to Rights. Any termination of this
Agreement shall be without prejudice to any rights which a Party may
have against any other Party for any breach by that Party prior to the
termination of this Agreement. Notwithstanding the termination of this
Agreement pursuant to Clause 3.4 or this Clause 10, the Parties agree
that the provisions of Clauses 8 and 9.9 shall survive and continue to
be binding on the Parties.
11. GOVERNING LAW
11.1 Governing Law. This Agreement and the documents to be entered into
pursuant to it shall be governed by and construed in accordance with the
laws of Singapore.
11.2 Submission to Jurisdiction. The Parties hereby submit to the
non-exclusive jurisdiction of the courts of Singapore.
<PAGE> 17
17
I N W I T N E S S W H E R E O F this Agreement has been entered into
on the date stated at the beginning.
SIGNED by Ash Bhardwaj )
on behalf of )
FLEXTRONICS INTERNATIONAL LTD. )
in the presence of:- )
SIGNED by Gay Chee Cheong )
on behalf of )
JIT HOLDINGS LIMITED )
in the )
presence of:- )
SIGNED by GOH THIAM POH TOMMIE )
in the )
presence of:- )
SIGNED by GOH MUI TECK WILLIAM )
in the )
presence of:- )
<PAGE> 18
18
A P P E N D I X
FORM OF ANNOUNCEMENT
JIT HOLDINGS LIMITED
ANNOUNCEMENT
PROPOSED MERGER OF FLEXTRONICS INTERNATIONAL LTD. AND
JIT HOLDINGS LIMITED
The Board of Directors of JIT Holdings Limited ("JIT") wish to announce that
they have today entered into a conditional merger agreement (the "Merger
Agreement") for a proposed merger (the "Proposed Merger") between Flextronics
International Ltd. ("Flextronics") and JIT.
PROPOSED MERGER
Pursuant to the terms of the Merger Agreement, JIT will propose a scheme of
arrangement (the "Scheme") pursuant to Section 210 of the Companies Act, Chapter
50 to be undertaken between JIT and the holders (the "JIT Shareholders") of
issued and fully paid-up ordinary shares of S$0.10 each in the capital of JIT
(the "JIT Shares").
The proposed Scheme involves, inter alia, the following:
(a) The cancellation of the issued JIT Shares held by the JIT Shareholders
in exchange for new issued ordinary shares of S$0.01 each in the capital
of Flextronics (the "Flextronics Shares"), credited as fully paid-up, to
be issued by Flextronics to the JIT Shareholders (the "Share Exchange")
on the following basis (the "Share Exchange Ratio"):-
JIT Shareholders will receive such number of Flextronics Shares
calculated based on a reference share price of S$4.38 per JIT Share (the
"JIT Reference Share Price"). The JIT Reference Share Price will be
converted into US$ at a fixed exchange rate of S$1.73 per US$1 (ie
US$2.5318 per JIT Share).
Under the Scheme, Flextronics will issue new Flextronics Shares having a
total value of approximately US$640 million in exchange for all of the
outstanding JIT Shares, subject to any changes in the value of the
Flextronics Shares outside the Collar described below. The number of new
Flextronics Shares received by JIT Shareholders will be calculated based
on dividing the JIT Reference Share Price by the average closing price
of Flextronics Shares for each of the twenty trading days on the
National Automated Securities Dealing and Quotation ("NASDAQ") ending
seven calendar days prior to the extraordinary general meeting ("EGM")
to be convened by JIT to approve, inter alia, the Proposed Merger (the
"Flextronics Reference Share Price"). If the closing price of
Flextronics Shares on any day during the twenty trading day period is
(i) above US$88 or (ii) below US$65, the closing price used for
computation for that trading day will be (i) US$88 or (ii) US$65, as the
case may be (the "Collar").
The actual number of new Flextronics Shares which a JIT Shareholder will
receive will be calculated such that the resultant fraction of a new
Flextronics Share will be disregarded.
<PAGE> 19
19
(b) The issue by JIT to Flextronics of new JIT Shares equivalent in number
to the JIT Shares cancelled.
For illustrative purposes only, based on the closing price of Flextronics Shares
on 9 August 2000 of US$77.375, holders of JIT Shares will receive 32 (rounded
down from 32.72) new Flextronics Shares for every 1,000 JIT Shares held. Based
on the Collar, the minimum and the maximum number of new Flextronics Shares
which a JIT Shareholder will receive for every 1,000 JIT Shares held will be 28
and 38 respectively.
For illustrative purposes only and disregarding rounding of figures, based on
the Flextronics Reference Share Price being assumed to be equivalent to the
closing price of US$77.375 on 9 August 2000, the Share Exchange Ratio is
equivalent to:
(a) a premium of approximately 42% over the closing price of JIT of S$3.08
on 8 August 2000, being the last day on which JIT Shares were traded;
and
(b) a premium of approximately 43% over the average closing price of JIT of
S$3.06 for the three months prior to 8 August 2000.
For illustrative purposes only, based on the Share Exchange Ratio and the
Flextronics Reference Share Price being assumed to be equivalent to the closing
price of US$77.375 on 9 August 2000, JIT Shareholders would receive new
Flextronics Shares as follows:-
<TABLE>
<CAPTION>
Number of JIT Shares held Number of new Flextronics Shares
------------------------- --------------------------------
<S> <C>
1,000 32 (rounded down from 32.72)
10,000 327 (rounded down from 327.21)
100,000 3,272 (rounded down from 3,272.12)
1,000,000 32,721 (rounded down from 32,721.16)
10,000,000 327,211 (rounded down from 327,211.63)
</TABLE>
The new Flextronics Shares to be issued pursuant to the Scheme will rank pari
passu in all respects with, and shall have attached thereto, the same rights and
privileges as the existing issued Flextronics Shares on the date on which the
Scheme becomes effective in accordance with its terms (the "Merger Date"),
including the right to receive and retain any dividends and other distributions
declared, made or paid after the Merger Date.
The new JIT Shares to be issued to Flextronics pursuant to the Scheme will rank
pari passu in all respects with the JIT Shares which were cancelled pursuant to
the Scheme, including the right to receive and retain any dividends and other
distributions declared, made or paid after the Merger Date.
Messrs Goh Thiam Poh Tommie and Goh Mui Teck William, both of whom are executive
Directors and substantial shareholders of JIT, have given irrevocable
undertakings to Flextronics to vote in favour of the Proposed Merger at the
meeting to be convened by order of the High Court of Singapore (the "High
Court") and at the EGM (the "Court Meeting") of JIT to approve the Proposed
Merger and the Scheme. Messrs Goh Thiam Poh Tommie and Goh Mui Teck William hold
80,839,870 and 36,852,240 JIT Shares respectively, representing in aggregate
47.21% of the issued and paid-up capital of JIT as at the date of this
Announcement.
Salomon Smith Barney has been appointed to advise Flextronics on the Proposed
Merger. ABN AMRO Asia Merchant Bank (Singapore) Limited has been appointed to
advise JIT on the Proposed Merger. JIT intends to appoint an independent
financial adviser to advise the independent directors of JIT on the Proposed
Merger.
BASIS OF SHARE EXCHANGE RATIO
<PAGE> 20
20
The Share Exchange Ratio was agreed upon based on arms' length negotiations
between Flextronics and JIT, taking into account factors such as the turnover,
profitability and growth of the two companies and the respective share price
performances of the two companies. The Collar was agreed upon to address the
market volatility of share price movements.
Further details of the respective valuations of the two companies will be set
out in the document to be despatched by JIT to its shareholders.
RATIONALE FOR THE PROPOSED MERGER
~ After the Proposed Merger, the enlarged group will have an enhanced global
capacity to meet the increased volume demands of global customers and will
be in a stronger position to take advantage of acquisition opportunities as
the electronics manufacturing services industry continues to consolidate.
~ JIT's particular knowledge and experience in the Asian markets (in
particular northern China), will complement Flextronics' experience and
operations in other parts of the world.
~ From the perspective of JIT's shareholders, the Proposed Merger will enable
JIT to realise its objective of becoming a premier global electronics
manufacturing company and to benefit from the generally higher market
valuations which are enjoyed by global electronic manufacturing companies
with larger market capitalisation.
~ The Proposed Merger will enable JIT to become part of the Flextronics group
which is a significantly larger group, and enable JIT shareholders to
benefit from a group with a broader and more diverse customer base. In
addition, JIT will benefit from the economies of scale which will result
from being part of a group with significantly increased operations and
sales.
FINANCIAL HIGHLIGHTS OF FLEXTRONICS AND JIT
For the financial year ended 31 March 2000, based on unaudited proforma
financial statements, Flextronics recorded a turnover of S$9,609 million, a
profit before tax of S$343 million and a profit after tax but before
extraordinary items of S$297 million. As at 31 March 2000, its total assets
amounted to S$7,535 million and its total liabilities amounted to S$3,638
million whilst its net tangible asset was S$3,897 million.
For the financial year ended 31 March 2000, based on unaudited financial
statements, JIT recorded a turnover of S$973 million, a profit before tax of
S$33 million and a profit after tax but before extraordinary items of S$27
million. As at 31 March 2000, its total assets amounted to S$475 million and its
total liabilities amounted to S$329 million whilst its net tangible asset was
S$146 million.
APPROVALS AND CONDITIONS FOR THE SCHEME
The completion of the Proposed Merger is conditional upon the following:-
(a) the receipt of all applicable regulatory approvals and such approvals
not being revoked on or before the Merger Date;
(b) the approval of the Scheme by the JIT Shareholders at the Court Meeting
to be convened in compliance with Section 210 of the Companies Act;
(c) the passing of the resolutions by the JIT Shareholders to approve (i)
the Scheme, (ii) the cancellation of the JIT Shares by way of a capital
reduction, (iii) the allotment and issue of the
<PAGE> 21
21
new JIT Shares to Flextronics or its nominee and (iv) all other matters
necessary to effect the Proposed Merger by the JIT Shareholders at the
EGM;
(d) the sanction of the Scheme by the High Court of Singapore;
(e) the registration of the Court Order with Registry of Companies and
Businesses;
(f) the Merger Agreement not having been terminated pursuant to the terms
therein,
on or prior to the Conditions Long-Stop Date (defined in the Merger Agreement as
31 March, 2000 (or such other date as the parties may agree)).
In addition, the completion of the Proposed Merger shall be conditional upon the
following, unless all or any of such conditions is waived by Flextronics:
(a) no occurrence, on or before the Merger Date, of any adverse change in
the JIT group's assets, employee base or business since 31st March, 2000
that is material to the JIT group as a whole;
(b) no discovery, on or before the Merger Date, of any material inaccuracy
in any information or financial statements issued or made publicly known
by JIT to comply with the laws of Singapore or the listing rules of the
Singapore Exchange Securities Trading Limited ("SGX-ST"); and
(c) no facts or circumstances shall exist that would prevent the Proposed
Merger from being accounted for as a pooling of interest under the
generally accepted accounting principles of the United States of
America.
The Securities Industry Council has ruled that the Singapore Code on Take-overs
and Mergers will not apply to the Scheme and accordingly, Flextronics will not
be required to make a general offer for JIT following the Proposed Merger.
Subject to all relevant approvals being obtained and conditions being satisfied
or waived (as the case may be), the Scheme is expected to become effective and
binding, and the Proposed Merger is expected to be completed, on 30 November
2000. If all relevant approvals have not been obtained and conditions have not
been satisfied or waived (as the case may be) on or before 30 November 2000, the
Proposed Merger is expected to be completed on 28 February 2001 or such other
date as Flextronics and JIT may agree.
JIT will become a wholly-owned subsidiary of Flextronics upon the Scheme
becoming effective and binding and its ordinary shares and other securities, if
any, which are, at present, listed and quoted on the SGX-ST will be delisted
from the Official List thereof. In the meantime, the ordinary shares of JIT will
continue to be traded on the SGX-ST.
A document explaining the Proposed Merger in greater detail including the Scheme
(as well as the approvals required before the Scheme may become effective and
binding) and to convene the requisite meeting(s) under the Scheme will be
despatched to JIT shareholders of JIT in due course.
SHAREHOLDERS OF JIT AND OTHER INVESTORS ARE THEREFORE ADVISED TO EXERCISE DUE
CAUTION WHEN BUYING OR SELLING JIT SHARES. PERSONS WHO ARE IN DOUBT AS TO THE
ACTION THEY SHOULD TAKE SHOULD CONSULT THEIR STOCKBROKER, BANK MANAGER,
SOLICITOR OR OTHER PROFESSIONAL ADVISER.
DISCLOSURE OF INTERESTS
<PAGE> 22
22
None of the Directors or controlling shareholders of the JIT have any interest,
direct or indirect, in the Proposed Merger or the Scheme.
AUDIT COMMITTEE
The Audit Committee of JIT is of the view that the Proposed Merger is on normal
commercial terms and is not prejudicial to the interests of shareholders of JIT.
DESPATCH OF SCHEME DOCUMENTS
A scheme document containing, inter alia, details of the Proposed Merger and the
Scheme, the advice of the independent financial adviser to the independent
directors of JIT, the explanatory statement and to convene the Court Meeting and
the EGM will be despatched to JIT Shareholders in due course.
ABOUT FLEXTRONICS
Flextronics is a leading global provider of electronics manufacturing and design
services. The ordinary shares of Flextronics are traded on NASDAQ. As at 26 July
2000, Flextronics has an authorised share capital of S$2.5 million divided into
250 million ordinary shares of S$0.01 each and an issued and paid-up share
capital of S$1,999,965 divided into 199,996,519 ordinary shares of S$0.01 each.
As at 9 August 2000, Flextronics' market capitalisation was S$26 billion (or
US$14.991 billion based on an exchange rate of S$1.71=US$1).
ABOUT JIT
JIT is the 17th largest electronics manufacturing service provider in the world
with more than one million square feet of manufacturing operations in Singapore,
Malaysia, China, Indonesia and Hungary. The ordinary shares of JIT are traded on
SGX-ST. As at 31 March 2000, JIT has an authorised share capital of S$50 million
divided into 500 million ordinary shares of S$0.10 each and an issued and
paid-up share capital of S$24,925,711 divided into 249,257,110 ordinary shares
of S$0.10 each. As at 8 August 2000, JIT's market capitalisation was S$768
million.
BY ORDER OF THE BOARD OF DIRECTORS:-
Goh Thiam Poh Tommie
Director
JIT Holdings Limited
<PAGE> 23
23
S C H E D U L E 1
Shares to which this Agreement relates
<TABLE>
<CAPTION>
REGISTERED HOLDER AND ADDRESS JIT SHARES
<S> <C>
GOH THIAM POH TOMMIE 80,839,870
3 Sunset Crescent, Singapore 597492
GOH MUI TECK WILLIAM 36,852,240
90 Cheng Soon Garden, Singapore 599862
</TABLE>
<PAGE> 24
24
S C H E D U L E 2
NON-COMPETITION COVENANTS
1. For the three years after the Merger Date or the one year after the
termination of the relevant service contracts referred to in Clause
5.2(l), whichever is the later, (the "Non-competition Term") the Key
Executive shall not, without the written consent of JIT, directly or
indirectly, individually or as an employee, partner, officer, director
or shareholder or in any other capacity whatsoever of or for any person,
firm, partnership, company or corporation other than JIT or its
subsidiaries (other than as a holder of less than five per cent. of the
outstanding share capital of a publicly-traded company):-
(a) own, manage, operate, sell, control or participate in the
ownership, management, operation, sales or control of or be
connected in any manner with any business engaged in printed
circuit board design or assembly or electronics contract
manufacturing or that is otherwise substantially similar to or
competitive with any services or products created, distributed or
under development by JIT, or any of its subsidiaries;
(b) recruit, attempt to hire, solicit, assist others in recruiting or
hiring, or refer to others concerning employment, any person who
is or was an employee of JIT, or any of its subsidiaries, or
induce or attempt to induce any such employee to terminate his
employment with the JIT, or any of its subsidiaries (as the case
may be);
(c) induce or attempt to induce any person or entity to curtail or
cancel any business or contracts that such person or entity had
with JIT, or any of its subsidiaries; or
(d) contact, solicit or call upon any customer or supplier of JIT, or
any of its subsidiaries, on behalf of any other person or entity
for the purpose of selling or providing any services or products
of the type normally sold or provided by JIT, or any of its
subsidiaries.
2. The agreements set forth in this Schedule 2 include within their scope
all cities, counties, provinces and states of countries in which JIT or
any of its subsidiaries has engaged in manufacturing or sales or
otherwise conducted business or selling or licensing efforts at any time
during the two years prior to the Merger Date hereof or during the
Non-competition Term. The Key Executive acknowledges that the scope and
period of restrictions and the geographical area to which the
restriction imposed in this Schedule 2 shall apply are fair and
reasonable and are reasonably required for the protection of JIT and
that this Schedule 2 accurately describes the business to which the
restrictions are intended to apply.
3. It is the desire and intent of the parties that the provisions of this
Schedule 2 shall be enforced to the fullest extent permissible under
applicable law. If any particular provision or portion of this Schedule
2 shall be adjudicated to be invalid or unenforceable, this Schedule 2
shall be deemed amended to revise those provisions or portions to the
minimum extent necessary to render them enforceable. Such amendment
shall apply only with respect to the operation of this paragraph in the
particular jurisdiction in which such adjudication was made.
4. The Key Executive acknowledges that any breach of the covenants of this
Schedule 2 will result in immediate and irreparable injury to JIT and,
accordingly, consents to the application of injunctive relief and such
other equitable remedies for the benefit of JIT as may be appropriate in
the event such a breach occurs or is threatened. The foregoing remedies
shall
<PAGE> 25
25
be in addition to all other legal remedies to which JIT may be entitled
hereunder, including, without limitation, monetary damages.
<PAGE> 26
26
S C H E D U L E 3
To: Flextronics International Ltd.
2090 Fortune Drive
San Jose, CA 95131
AFFILIATES AGREEMENT
This Affiliates Agreement (this "AGREEMENT") is being delivered to Flextronics
International Ltd., a Singapore company ("FLEXTRONICS") in connection with the
proposed acquisition (the "MERGER") of JIT Holdings Limited, a Singapore company
("Company"), by Flextronics.
The undersigned understands that, since the Merger is anticipated to be
accounted using the "pooling-of-interests" method of financial accounting, and
the undersigned may be deemed an "affiliate" of Company (within the meaning of
Rule 405 promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "SECURITIES ACT")), the Flextronics
ordinary shares received in exchange for Company ordinary shares, which the
undersigned owns or which the undersigned may acquire hereafter may be disposed
of only in conformity with the limitations described herein.
The undersigned has been informed that the treatment of the Merger as a
pooling-of-interest for financial accounting purposes depends upon the accuracy
of certain of the representations and warranties and the compliance with certain
of the agreements set forth herein. The undersigned further understands that the
representations, warranties and agreements set forth herein will be relied upon
by Flextronics, Company and their respective counsel and accounting firms.
1. The undersigned represents, warrants and agrees as follows:
(a) The undersigned has full power to execute this Agreement and to
make the representations, warranties and agreements herein and to
perform the undersigned's obligations hereunder.
(b) Attachment 1 hereto sets forth all Company ordinary shares and
any other equity securities of Company owned by the undersigned
as of the date hereof, including all equity securities of Company
as to which the undersigned has sole or shared voting or
investment power, and all rights, options and warrants to acquire
shares of Company ordinary shares or other equity securities of
Company (such Company ordinary shares, other equity securities of
Company and rights, options and warrants to acquire Company
ordinary shares and other equity securities of Company are
hereinafter collectively referred to as "COMPANY SECURITIES").
Except for the Company Securities, the undersigned does not
beneficially own any other equity security of Company or any
options, warrants or other rights to acquire equity securities of
Company. As of the date hereof, the Company Securities are, and
at all times until the "EXPIRATION DATE" (as defined below), will
be, free and clear of any liens, claims, options, charges or
other encumbrances. As used herein, the term "EXPIRATION DATE"
means the earliest to occur of (i) the publication of the first
report including the combined financial results of Flextronics
and Company for a period of at least thirty (30) days of combined
operations or (ii) such time as the Merger may be terminated in
accordance with its terms.
2. The undersigned agrees as follows:
<PAGE> 27
27
(a) During the period beginning thirty (30) days prior to the
effective time of the Merger (the "EFFECTIVE TIME") and ending on
the Expiration Date (as defined above), without the prior written
consent of Flextronics, the undersigned will not sell, transfer,
encumber or dispose of, or offer to sell, transfer, encumber or
dispose of, or in any other way reduce the undersigned's risk of
ownership or investment in (i) any of the Company Securities or
(ii) any Company Securities that the undersigned purchases or
otherwise acquires after the execution of this Agreement and
prior to the Expiration Date ("NEW COMPANY SECURITIES"). All New
Company Securities will be subject to the terms of this Agreement
to the same extent and in the same manner as if they were Company
Securities.
(b) The undersigned will not sell, transfer or otherwise dispose of
any Flextronics ordinary shares, or any option, right or other
interest with respect to Flextronics ordinary shares that the
undersigned might acquire in connection with the Merger or any
securities that may be paid as a dividend thereon or with respect
thereto or issued or delivered in exchange or substitution
therefor (collectively, the "FLEXTRONICS SECURITIES"), or offer
or agree to sell, transfer or otherwise dispose of, or in any
other way reduce the undersigned's risk of ownership or
investment in, any Flextronics Securities: (i) in the thirty (30)
day period immediately preceding the Effective Time; or (ii)
after the Effective Time, until Flextronics has publicly released
its first report including the combined financial results of
Flextronics and Company for a period of at least thirty (30) days
of combined operations.
3. The undersigned also understands that stop-transfer instructions will be
given to Flextronics' transfer agent with respect to certificates
evidencing the Flextronics Securities and that there will be placed on
the certificates evidencing the Flextronics Securities a legend stating
in substance (in addition to any other legends required by law or
contract):
"THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNTIL FLEXTRONICS INTERNATIONAL
LTD. HAS PUBLICLY RELEASED A FINANCIAL REPORT INCLUDING THE COMBINED
RESULTS OF FLEXTRONICS INTERNATIONAL LTD. AND COMPANY FOR A PERIOD OF AT
LEAST THIRTY (30) DAYS OF COMBINED OPERATIONS OF FLEXTRONICS
INTERNATIONAL LTD. AND JIT HOLDINGS LIMITED."
4. After release of the report described in Sections 1(b) and 2(b) hereof,
certificates evidencing the Flextronics Securities delivered at or after
the Closing Date may, at the undersigned's election, be surrendered for
cancellation and reissuance with only a legend relating to any resale
restrictions under Rule 145(d) promulgated under the Securities Act.
Flextronics agrees that such stop-transfer instructions and legend will
be removed promptly if the provisions of this Agreement and the
Securities Act are complied with.
5. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement will remain in full force and effect and
will in no way be affected, impaired or invalidated.
6. This Agreement and all of the provisions hereof will be binding upon and
inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but except as otherwise specifically
provided herein, neither this Agreement nor any of the rights, interests
or obligations of the parties hereto may be assigned by any of the
parties without prior written consent of the others.
7. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed
by the parties hereto.
<PAGE> 28
28
8. The undersigned acknowledges that Flextronics and Company will each be
irreparably harmed and that there will be no adequate remedy at law for
a violation of any of the covenants or agreements of the undersigned set
forth herein. Therefore, it is agreed that, in addition to any other
remedies which may be available to Flextronics and Company upon any such
violation, Flextronics and Company will have the right to enforce such
covenants and agreements by specific performance, injunctive relief or
by any other means available at law or in equity.
9. This Agreement will be governed by, and construed and enforced in
accordance with, the internal laws of the Republic of Singapore, without
regard to its rules regarding conflict of laws.
10. This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and supersedes all prior
negotiations and understandings between the parties with respect to such
subject matter.
11. This Agreement may be executed in several counterparts, each of which
will be an original as regards the party whose signature appears
thereon, and all of which together will constitute one and the same
instrument.
12. This Agreement will be binding upon and enforceable against
administrators, executors, representatives, heirs, legatees and devisees
of the undersigned and any pledgee holding Company Securities (or the
Flextronics ordinary shares issued in the Merger) as collateral.
Dated: August __________, 2000
Very truly yours,
By:
--------------------------------
Agreed to and accepted:
Flextronics International Ltd.
By:
--------------------------------
Title:
-----------------------------
<PAGE> 29
29
[SIGNATURE PAGE TO COMPANY AFFILIATES AGREEMENT]
ATTACHMENT 1 TO AFFILIATES AGREEMENT
COMPANY SECURITIES
Number of shares of Company ordinary shares
beneficially owned by the undersigned: __________________
Number of shares of Company ordinary shares
subject to options beneficially
owned by the undersigned: __________________
S C H E D U L E 4
THE SCHEME OF ARRANGEMENT
SCHEME OF ARRANGEMENT
IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE
Originating Summons )
Number [ ] of 2000 )
In the Matter of
JIT Holdings Limited
<PAGE> 30
30
(RCB No. 199702151K)
And
In the Matter of
The Companies Act, Chapter 50
(Revised Edition 1994)
SCHEME OF ARRANGEMENT
under Section 210 of the Companies Act, Chapter 50
Between
JIT Holdings Limited
And
the Scheme Shareholders (as defined herein)
And
Flextronics International Ltd.
<PAGE> 31
31
PRELIMINARY
(A) In this Scheme, except to the extent that the context requires
otherwise:-
(i) the following expressions bear the following respective meanings,
namely:-
<TABLE>
<CAPTION>
Expressions Meaning
----------- -------
<S> <C>
"Collar" has the meaning ascribed thereto in
Clause 2(A)(b) of this Scheme
"Company" or JIT Holdings Limited
"JIT"
"Court" The High Court of the Republic of
Singapore
"Depository" The Central Depository (Pte) Limited
"EGM" extraordinary general meeting
"Effective Date" the date on which this Scheme
becomes effective in accordance with
Clause 7 of this Scheme
"JIT Shares" ordinary shares of S$0.10 each in
the capital of JIT
"JIT Reference Share has the meaning ascribed thereto in
Price" Clause 2(A)(a) of this Scheme
"Flextronics " Flextronics International Ltd.
"Flextronics Reference has the meaning ascribed thereto in
Share Price" Clause 2(A)(b) of this Scheme
"Flextronics Shares" ordinary shares of S$0.01 each in
the capital of Flextronics
"Proposed Merger" has the meaning ascribed thereto in
recital (D) of this Scheme
"Options" share options granted by the Company
under the JIT Employee Share Option
Scheme
"Relevant Date" the date immediately preceding the
Effective Date (or, if that date is
not a business day, then the
Relevant Date shall be the business
day immediately preceding that date)
"Scheme" this Scheme of Arrangement in its
present form (or,
</TABLE>
<PAGE> 32
32
<TABLE>
<S> <C>
if this Scheme is modified or
amended in accordance with Clause 9
of this Scheme, this Scheme as from
time to time so modified or amended)
"Scheme Shareholders" persons who are registered as
holders of JIT Shares in the
Register of Members of JIT and
Depositors who have JIT Shares
entered against their names in the
Depository Register as at 5 p.m. on
the Relevant Date
"Scheme Shares" all of the issued JIT Shares
"Securities Account" securities account maintained by a
Depositor with the Depository
"SGX-ST" Singapore Exchange Securities
Trading Limited
"Share Registrar" Lim Associates (Pte) Ltd
"Singapore Dollars"
and "S$" the lawful currency of Singapore
"United States Dollars"
and "US$" the lawful currency of the United
States of America
</TABLE>
(ii) the term "business day" shall mean any day other than a Saturday,
a Sunday or a public holiday in Singapore;
(iii) the terms "Depositor" and "Depository Register" shall have the
meanings ascribed to them respectively in Section 130A of the
Companies Act, Chapter 50;
(iv) the term "Shareholder" includes a person entitled by
transmission;
(v) any reference to a statutory provision shall include such
provision and any regulations made in pursuance thereof as from
time to time modified or re-enacted whether before or after the
date of this Scheme;
(vi) words denoting the singular number only shall include the plural
and vice versa;
(vii) words importing persons shall include corporations; and
(viii) any reference in this Scheme to a time of day shall be a
reference to Singapore time.
(B) JIT is a public company limited by shares incorporated in Singapore on
19 May 1997 and has at the date of this Scheme an authorised capital of
S$50 million divided into 500 million ordinary shares of S$0.10 each and
an issued and paid-up share capital of S$24,925,711 divided into
249,257,110 ordinary shares of S$0.10 each. JIT is listed on the SGX-ST.
(C) Flextronics is a public company limited by shares incorporated in
Singapore on [ ] and has at the date of this Scheme an authorised
capital of S$2.5 million divided into 250
<PAGE> 33
33
million ordinary shares of S$0.01 each and an issued and paid-up share
capital of S$1,999,965 divided into 199,996,519 ordinary shares of
S$0.01 each. Flextronics is listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").
(D) The purpose of this Scheme is to effect a reorganisation of the capital
of JIT such that on the completion of the Scheme, the sole shareholder
of JIT shall be Flextronics and the Scheme Shareholders shall
immediately following the completion of the Scheme be shareholders of
Flextronics (the "Proposed Merger").
(E) Flextronics has agreed to appear by Counsel on the hearing of the
Originating Summons to sanction this Scheme, and to consent thereto, and
to undertake to the Court to be bound thereby and to execute all such
documents and do all such acts and things as may be necessary or
desirable to be executed or done by it for the purpose of giving effect
to this Scheme.
THE SCHEME
Re-organisation of Capital
1(A) The capital of the Company shall be reduced from S$50,000,000 divided
into 500,000,000 JIT Shares, of which 249,257,110 of the JIT Shares have
been issued and are fully paid, and [ ] new JIT Shares are liable to be
issued and fully paid-up, assuming the exercise in full of the
outstanding Options in respect of [ ] JIT Shares, to between a maximum
of S$[ ] divided into [ ] JIT Shares and a minimum of S$[ ] divided into
[ ] JIT Shares, and such reduction shall be effected by cancelling
between a maximum of [ ] JIT Shares and a minimum of [ ] JIT Shares.
(B) Forthwith and contingently upon the reduction of capital of the Company
taking effect:-
(a) the capital of the Company shall be increased to its former
capital of S$50,000,000 by the creation of between a maximum of [
] new JIT Shares and a minimum of [ ] new JIT Shares; and
(b) out of the credit of between a maximum of S$[ ] and a minimum of
S$[ ] which will arise in the books of accounts of the Company as
a result of the said reduction of capital, the Company shall
apply between a maximum of S$[ ] and a minimum of S$[ ] in paying
up in full at par between a maximum of [ ] new JIT Shares and a
minimum of [ ] new JIT Shares which shall be allotted and issued
by the Company, credited as fully paid- up, to Flextronics or its
nominees.
2(A) In consideration for the cancellation of between a maximum of [ ] JIT
Shares and a minimum of [ ] JIT Shares provided for by Clause 1(A) of
this Scheme, Flextronics shall, not later than ten business days after
the Effective Date but subject to hereinafter provided as regards
fractions, allot and issue to the Scheme Shareholders, new Flextronics
Shares, credited as fully paid up, on the following basis:
(a) JIT Shareholders will receive such number of new Flextronics
Shares calculated based on a reference share price of S$4.38 per
JIT Share (the "JIT Reference Share Price").
<PAGE> 34
34
The JIT Reference Share Price will be converted into US$ at a
fixed exchange rate of S$1.73 per US$1 (ie US$2.5318 per JIT
Share).
(b) Flextronics will issue new Flextronics Shares having a total
value of approximately US$640 million in exchange for all of the
outstanding JIT Shares and options issued pursuant to the JIT
Employee Share Option Scheme, subject to any changes in the value
of the Flextronics Shares outside the Collar described below. The
number of new Flextronics Shares received by JIT Shareholders
will be calculated based on dividing the JIT Reference Share
Price by the average closing price of Flextronics Shares for each
of the twenty trading days on the NASDAQ ending seven calendar
days prior to the EGM to be convened by JIT to approve, inter
alia, the Proposed Merger (the "Flextronics Reference Share
Price"). If the closing price of Flextronics Shares on any day
during the twenty trading day period is (i) above US$88 or (ii)
below US$65, the closing price used for computation for that
trading day will be (i) US$88 or (ii) US$65, as the case may be
(the "Collar").
(B) No fraction of a Flextronics Share shall be allotted or issued to any of
the Scheme Shareholders or, as the case may be, the Depository.
(C) Where a Scheme Shareholder is a Depositor, the new Flextronics Shares
shall be issued to the Depository for the benefit and to the credit of
the Securities Account of such Scheme Shareholder.
3(A) The new Flextronics Shares to be issued to the Scheme Shareholders
referred to in Clause 2(A) of this Scheme shall rank pari passu in all
respects with, and shall have attached thereto, the same rights and
privileges, as the then existing issued Flextronics Shares.
(B) The new JIT Shares to be issued to Flextronics referred to in Clause
2(A) of this Scheme shall rank pari passu in all respects with, and
shall have attached thereto, the same rights and privileges as the JIT
Shares which were cancelled pursuant to the Scheme.
4 Flextronics shall, not later than ten business days after the Effective
Date, deliver the share certificates for the Flextronics Shares allotted
and issued pursuant to this Scheme to:-
(a) the Scheme Shareholders referred to in Clause 2(A) of this Scheme
(not being Depositors) by sending the same at the risk of such
Scheme Shareholders by ordinary post addressed to their
respective addresses as set out in the Register of Members of the
Company at the close of business on the Relevant Date or, in the
case of joint Scheme Shareholders, to the address of the first
named Scheme Shareholder and neither the Company nor Flextronics
shall be liable for any loss in transmission; and
(b) the Scheme Shareholders referred to in Clause 2(A) of this Scheme
(being Depositors) by sending the same to [ ]. [ ] shall send to
such Scheme Shareholders, by ordinary post and at the risk of
such Scheme Shareholders, a statement showing the number of
Flextronics Shares credited to their respective Securities
Accounts.
5 As on and from the Effective Date each existing certificate representing
a former holding of the Scheme Shares shall cease to have effect as a
document for title of the shares comprised therein and each of the
Scheme Shareholders shall be bound to deliver the share certificates
<PAGE> 35
35
for his holdings of the Scheme Shares for cancellation to the Share
Registrar at 10 Collyer Quay #19-08 Ocean Building, Singapore 049315.
6 All mandates or other instructions given by any Scheme Shareholder
relating to the payment of dividends by the Company or relating to
notices or other communications in force at the close of business on the
Relevant Date shall, unless and until revoked, be deemed as from the
Effective Date to be a valid and effective mandate or, as the case may
be, valid and effective instructions to Flextronics in relation to his
corresponding holding of Flextronics Shares.
Effective Date
7 This Scheme shall become effective as soon as an office copy or office
copies of the order or orders of the Court sanctioning this Scheme,
under Section 210 of the Companies Act, Chapter 50, and confirming under
Section 73 of the Companies Act, Chapter 50, the reduction of the
capital of the Company provided for in this Scheme shall have been
delivered to the Registrar of Companies and Businesses in Singapore for
registration.
8 Unless this Scheme shall have become effective on or before 31 March
2001 or such later date, if any, as the Court may allow, the same shall
never become effective.
9 The Company and Flextronics may jointly consent on behalf of all persons
concerned to any modification or amendment of this Scheme or to any
condition which the Court may approve or impose.
Dated the [ ] day of [ ] 2000.
<PAGE> 36
Draft: 7 September 2000
[On JIT letterhead]
Date:
Flextronics International Ltd.
8th Floor, Hale Weal Industrial Building
22-28 Tai Chung Road
Tsuen Wan, N.T.,
Hong Kong
Dear Sirs
PROPOSED MERGER OF FLEXTRONICS INTERNATIONAL LTD.
AND JIT HOLDINGS LIMITED (THE "MERGER")
We refer to the Merger Agreement dated 10 August 2000 (the "Merger Agreement")
made between, Flextronics International Ltd. ("FLEX"), JIT Holdings Limited
("JIT"), Goh Thiam Poh Tommie and Goh Mui Teck William in relation to the
Merger. Terms defined in the Merger Agreement shall have the same meaning
herein.
This letter sets out the Parties' agreement to amend the Merger Agreement as
follows:-
1. by inserting a new Clause 2.1A immediately after the existing Clause 2.1
of the Merger Agreement as follows:-
"2.1A Alteration of capital. In the event that the effective date of a
variation in the issued share capital of FLEX shall occur between the
date of this Agreement and the Merger Date:-
(a) Capitalisation of Profits or Reserves, Subdivision,
Consolidation: in the case of a capitalisation of profits or
reserves, or subdivision, or consolidation, the upper and lower
limit of the Collar (as defined in the Announcement) which is
US$88 and US$65 respectively, shall be adjusted by applying the
following factor:-
Factor = A/B
where:
A = the aggregate number of existing issued and paid-up FLEX
Shares immediately before the aforesaid variation; and
B = the aggregate number of existing issued and paid-up FLEX
Shares immediately after the aforesaid variation;
(b) Rights Issue: in the case of a rights issue, the upper and lower
limit of the Collar (as defined in the Announcement) which is
US$88 and US$65 respectively, shall be adjusted by applying the
following formula:-
1/[E/(E-F)]
where:
E = the last dealt price immediately preceding the date on which
the rights issue is announced; and
<PAGE> 37
F = the value of rights attributable to one (1) FLEX Share, which
is calculated in accordance with the formula [E-G] / [H+1]
where:
G = the subscription price of one (1) additional FLEX Share under
the rights issue; and
F = the number of FLEX Shares which is necessary to hold in order
to be offered the rights to subscribe for one (1) additional FLEX
Share;
(c) Others: subject to Clause 2.1A(d), in the case of a variation in
the issued share capital of FLEX other than those specified in
Clauses 2.1A(a) and (b), during the period commencing five (5)
Business Days from the date when the aforesaid variation is
approved by the directors of FLEX, the Corporate Parties agree to
negotiate in good faith as to the adjustment to be made to the
upper and lower limit of the Collar (as defined in the
Announcement) in a fair and equitable manner. If no agreement is
reached (i) on or before three (3) Business Days prior to the
Merger Date; or (ii) upon the expiry of five (5) Business Days
from the date of commencement of the negotiations, whichever is
earlier, the Corporate Parties agree to refer to FLEX's auditors
for resolution, and the Collar shall be adjusted in a fair and
equitable manner as FLEX's auditors (acting as experts and not as
arbitrators) shall determine.
(d) Excluded Transactions: the issue of FLEX Shares for cash and/or
as consideration for one or more acquisitions of assets or
companies by FLEX will not be regarded as a circumstance
requiring adjustment pursuant to this Clause 2.1A."
2. by substituting the following clause in place of the existing Clause 4.1
of the Merger Agreement:-
"The actual number of New FLEX Shares which a Scheme Shareholder will be
entitled to receive shall be calculated such that any resultant fraction of a
New FLEX Share shall be disregarded. Flextronics will make cash payments to all
affected Scheme Shareholders for any resultant fraction of a new Flextronics
Share so disregarded (except that no amount of less than S$10 shall be
distributed to any of such JIT Shareholder)."
Save as hereby modified, the Merger Agreement shall continue in full force and
effect in all respects. The Merger Agreement shall be read and construed in
conjunction and as one document with this agreement and references in the Merger
Agreement to "this Agreement" shall be construed accordingly.
This letter shall be governed by, and interpreted in accordance with, the laws
of Singapore and the Parties agree to submit to the non-exclusive jurisdiction
of the courts of Singapore.
Please confirm your agreement to the above terms and conditions by signing and
returning the duplicate copy to us.
Yours faithfully
For and on behalf of
JIT Holdings Limited
Name:
Director
<PAGE> 38
(Signature)
Goh Thiam Poh Tommie
(Signature)
Goh Mui Teck William
--------------------------------------------------------------------------------
A C K N O W L E D G E M E N T
We hereby confirm and agree to the above terms and conditions.
Yours faithfully
For and on behalf of
Flextronics International Ltd.
Name:
Director
