SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 29, 2000
Commission File Number 0-3319
DEL GLOBAL TECHNOLOGIES CORP.
------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1784308
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Commerce Park, Valhalla, NY 10595
- ------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(914) 686-3600
--------------
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the business on March 10, 2000.
Common Stock - 7,814,494
<PAGE>
PART I
Item 1. Financial Statements
Consolidated Balance Sheets - January 29, 2000 and July 31, 1999
Consolidated Statements of Income for the Three Months and Six
Months Ended January 29, 2000 and January 30, 1999
Consolidated Statements of Cash Flows for the Six Months Ended
January 29, 2000 and January 30, 1999
Notes to Consolidated Financial Statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
January 29, July 31,
2000 1999
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 244,762 $ 320,742
Investments available-for-sale 1,290,418 1,292,852
Trade receivables - net 15,906,168 15,624,433
Cost and estimated earnings
in excess of billings
on uncompleted contracts 8,788,171 6,402,532
Inventory 37,693,356 36,599,587
Prepaid expenses and other
current assets 1,878,514 1,216,145
----------- -----------
Total current assets 65,801,389 61,456,291
----------- -----------
FIXED ASSETS - Net 15,137,511 14,668,060
INVESTMENT IN AFFILIATE 1,451,348 --
INTANGIBLES - Net 788,483 879,898
GOODWILL - Net 5,091,200 5,236,965
DEFERRED CHARGES 199,281 264,464
OTHER ASSETS 1,625,251 1,598,279
----------- -----------
TOTAL $90,094,463 $84,103,957
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 594,740 $ 516,654
Accounts payable - trade 5,709,684 6,295,586
Accrued liabilities 4,269,911 4,468,521
Deferred compensation liability 1,301,296 1,201,065
Income taxes 1,339,958 1,224,451
----------- -----------
Total current liabilities 13,215,589 13,706,277
----------- -----------
LONG-TERM LIABILITIES
Long-term debt (less current portion) 4,729,976 1,832,287
Other 532,771 594,272
Deferred income taxes 1,936,467 1,620,417
----------- -----------
Total liabilities 20,414,803 17,753,253
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $.10 par value;
Authorized 20,000,000 shares;
Issued and outstanding - 8,383,840
shares at January 29, 2000 and
8,278,646 shares at July 31, 1999 838,385 827,866
Additional paid-in capital 51,446,645 50,798,502
Retained earnings 22,326,647 19,032,506
----------- -----------
74,611,677 70,658,874
Less common stock in treasury -
567,846 shares at January 29, 2000
and 490,393 shares at July 31, 1999 4,932,017 4,308,170
----------- -----------
Total shareholders' equity 69,679,660 66,350,704
----------- -----------
TOTAL $90,094,463 $84,103,957
=========== ===========
See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
------------------------- -------------------------
January 29, January 30, January 29, January 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
NET SALES $17,450,349 $15,921,952 $33,162,373 $30,731,618
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 10,419,466 9,308,253 19,730,199 17,987,421
Research and development 1,706,689 1,522,929 3,249,843 2,954,243
Selling, general and
administrative 2,700,789 2,749,659 5,303,963 5,370,821
Interest expense - net 83,095 15,831 145,132 22,712
----------- ----------- ----------- -----------
14,910,039 13,596,672 28,429,137 26,335,197
----------- ----------- ----------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,540,310 2,325,280 4,733,236 4,396,421
PROVISION FOR INCOME TAXES 772,147 720,836 1,439,095 1,362,890
----------- ----------- ----------- -----------
NET INCOME $ 1,768,163 $ 1,604,444 $ 3,294,141 $ 3,033,531
=========== =========== =========== ===========
NET INCOME PER COMMON
SHARE AND COMMON
SHARE EQUIVALENTS:
BASIC $ .23 $ .21 $ .42 $ .40
=========== =========== =========== ===========
DILUTED $ .22 $ .20 $ .40 $ .37
=========== =========== =========== ===========
Weighted average number
of commons shares
outstanding 7,813,017 7,648,308 7,799,511 7,648,361
=========== =========== =========== ===========
Weighted average number
of common shares
outstanding and common
share equivalents 8,163,980 8,205,600 8,167,878 8,174,078
=========== =========== =========== ===========
See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
--------------------------
January 29, January 30,
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,294,141 $ 3,033,531
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,146,461 843,725
Amortization 368,873 322,676
Imputed interest 22,541 10,973
Deferred income tax provision 294,990 184,374
Tax benefit from exercise of stock
options and warrants 238,518 131,391
Amortization of stock-based compensation 17,518 11,215
Changes in assets and liabilities:
Increase in trade receivables (281,735) (1,011,876)
Increase in cost and estimated earnings in
excess of billings on uncompleted contracts (2,385,639) (1,454,565)
Increase in inventory (1,093,769) (4,013,448)
Increase in prepaid and other current assets (728,879) (869,686)
Increase in other assets (5,912) (9,983)
(Decrease) increase in accounts payable - trade (585,902) 1,262,347
(Decrease) increase in accrued liabilities (360,308) 170,749
Increase in deferred compensation liability 100,231 212,006
Increase in income taxes payable 115,507 627,041
----------- -----------
Net cash provided by (used in) operating activities 156,636 (549,530)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash invested in affiliate (1,080,040) --
Net cash paid to acquire selected assets -- (509,219)
Expenditures for fixed assets (1,615,912) (1,502,770)
Investment in marketable securities 2,434 (170,963)
Payments to former shareholders of
subsidiary acquired (35,770) (60,186)
----------- -----------
Net cash used in investing activities (2,729,288) (2,243,138)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank borrowing 2,975,775 583,701
Payment for repurchase of shares (623,847) (692,474)
Proceeds from exercise of stock options
and warrants 133,924 328,500
Other 10,820 54,543
----------- -----------
Net cash provided by financing activities 2,496,672 274,270
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (75,980) (2,518,398)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 320,742 3,401,697
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 244,762 $ 883,299
=========== ===========
See notes to consolidated financial statements
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<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
---------------------------
January 29, January 30,
2000 1999
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 109,321 $ 75,698
============ ============
Income taxes paid $ 832,360 $ 419,469
============ ============
SUPPLEMENTAL SCHEDULE OF INVESTING AND
FINANCING ACTIVITIES:
Investment in affiliate $ 1,451,348
Compensation cost of warrant issued (218,702)
Investment costs in accrued expense (152,606)
------------
Net cash invested in affiliate $ 1,080,040
============
Acquisition of selected assets $ 1,309,219
Payment due under acquisition term note (800,000)
------------
Net cash paid to acquire selected assets $ 509,219
============
See notes to consolidated financial statements
-5-
<PAGE>
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to
present fairly the results of the Company's financial position as
of January 29, 2000 and the results of its operations and its
cash flows for the six months ended January 29, 2000 and January
30, 1999.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements as of July 31, 1999.
The consolidated financial statements should be read in
conjunction with the notes to the financial statements as of July
31, 1999.
Certain reclassifications have been made in the prior period's
financial statements to correspond to the current period's
presentation.
NOTE 2 The results of operations for the three and six-month periods
ended January 29, 2000 are not necessarily indicative of the
results to be expected for the full year.
NOTE 3 INVESTMENTS
Investments available-for-sale at January 29, 2000 and July 31,
1999 include $1,301,296 and $1,201,065,respectively, for the
Company's President's deferred compensation and certain key
executives. At January 29, 2000 and July 31, 1999, $45,085 and
$213,411, respectively, were classified as cash and $1,256,211
and $1,146,009, respectively, were recorded as investments. The
liabilities of $1,301,296 and $1,201,065, respectively, are
recorded as deferred compensation liability. Gains and losses on
the investments held to fund the deferred compensation, either
recognized or unrealized, inure to the benefit or detriment of
the President's or key executives' deferred compensation. At
January 29, 2000 and July 31, 1999, the balance of investments
available-for-sale of $34,207 and $146,843, respectively, are
equity securities held by the Company for its own account.
Realized and unrealized gains and losses on these securities for
the periods ended January 29, 2000 and January 30, 1999 were not
material and are recorded in the financial statements.
NOTE 4 PERCENTAGE OF COMPLETION ACCOUNTING
January 29, July 31,
2000 1999
----------- -----------
Costs incurred on
uncompleted contracts $17,331,810 $15,012,158
Estimated earnings 10,939,263 9,329,220
----------- -----------
28,271,073 24,341,378
Less billings to date 19,482,902 17,938,846
----------- -----------
Costs and estimated
earnings in excess of billings
on uncompleted contracts $ 8,788,171 $ 6,402,532
=========== ===========
The backlog of unshipped contracts being accounted for under the
percentage of completion method of accounting was approximately
$3.6 million at January 29, 2000.
-6-
<PAGE>
NOTE 5 INVENTORY
Inventory is stated at the lower of cost (first-in, first-out) or
market.
Inventories and their effect on cost of sales are determined by
physical count for annual reporting purposes and are estimated by
management for interim reporting purposes.
Inventory consists of the following:
January 29, July 31,
2000 1999
----------- -----------
Finished goods $ 7,921,344 $ 5,414,095
Work-in-process 17,245,195 14,814,766
Raw material and purchased parts 12,526,817 16,370,726
----------- -----------
Total $37,693,356 $36,599,587
=========== ===========
NOTE 6 FIXED ASSETS
Fixed assets consist of the following:
January 29, July 31,
2000 1999
----------- ----------
Land $ 694,046 $ 694,046
Building 2,200,742 2,161,025
Machinery and equipment 17,696,398 16,446,086
Furniture and fixtures 1,569,579 1,435,929
Leasehold improvements 2,373,106 2,180,873
Transportation equipment 30,103 30,103
----------- -----------
24,563,974 22,948,062
Less accumulated depreciation
and amortization 9,426,463 8,280,002
----------- -----------
Net fixed assets $15,137,511 $14,668,060
=========== ===========
NOTE 7 INVESTMENT IN AFFILIATE
On December 28, 1999, the Company obtained a 19% interest in
Villa Sistemi Medicali S.p.A. ("Villa") located in Milan, Italy,
for a six-year warrant to purchase 50,000 shares of Del Global
Technologies Corp. common stock at the fair market price on the
date of issuance. This warrant is valued at approximately
$219,000 using the Black-Scholes method as prescribed by SFAS No.
123, "Accounting for Stock-Based Compensation." In addition, the
associated transaction costs of this investment are approximately
$340,000. The investment is accounted for at cost. Further, Villa
management has granted to the Company an exclusive irrevocable
option to purchase an additional 61% of the shares of Villa
within 60 days after the Company receives certified financial
statements of Villa for the year ended December 31, 1999.
On January 3, 2000, the Company contributed $892,000 to the
charter capital of Villa in consideration for a pledge by the
Villa management of their majority ownership of the outstanding
shares of Villa. On the same date, Villa management collectively
contributed $108,000 to the charter capital of Villa.
NOTE 8 SEGMENTS
The Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", during the fourth quarter
of the year ended July 31, 1999. SFAS No. 131 establishes
standards for reporting information about operating segments in
annual financial statements and requires selected information
about operating segments in interim financial statements. It also
establishes standards for related disclosures about products and
services, major customers and geographic areas. Operating
segments are defined as components of an
-7-
<PAGE>
enterprise about which separate financial information is
available that is evaluated regularly by the chief decision
maker, or decision making group, in deciding how to allocate
resources and in assessing performance. The Company's chief
operating decision making group is comprised of the Chief
Executive Officer and the senior executives of the Company's
operating segments.
The Company has two reportable segments which are Medical Imaging
Systems and Critical Electronic Subsystems. The Medical Imaging
Systems Segment designs, manufactures and markets
state-of-the-art, cost-effective medical imaging and diagnostic
systems consisting of stationary and portable imaging systems,
radiographic/fluoroscopic systems, mammography systems a neo-
natal imaging system and dental imaging systems. The Critical
Electronic Subsystems Segment designs, manufactures and markets
proprietary precision power conversion and electronic noise
suppression subsystems for medical as well as critical industrial
applications.
Selected financial data of these segments is as follows:
<TABLE>
<CAPTION>
Medical Critical
Imaging Electronic
Systems Subsystems Total
----------- ----------- -----------
For the Six Months Ended January 29, 2000:
<S> <C> <C> <C>
Net sales to external customers $17,532,787 $15,629,586 $33,162,373
=========== =========== ===========
Income before provision for income taxes $ 1,597,431 $ 3,135,805 $ 4,733,236
=========== =========== ===========
Segment assets $12,635,506 $77,458,957 $90,094,463
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Medical Critical
Imaging Electronic
Systems Subsystems Total
----------- ----------- -----------
For the Six Months Ended January 30, 1999:
<S> <C> <C> <C>
Net sales to external customers $16,179,691 $14,551,927 $30,731,618
=========== =========== ===========
Income before provision for income taxes $ 1,684,027 $ 2,712,394 $ 4,396,421
=========== =========== ===========
Segment assets $10,848,887 $68,166,063 $79,014,950
=========== =========== ===========
</TABLE>
-8-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management Discussion and Analysis of Financial Condition and Results of
Operations contains forward looking statements. Such statements involve various
risks that may cause actual results to differ materially. These risks include,
but are not limited to, the ability of the Company to grow internally or by
acquisition and to integrate acquired businesses, changing industry or
competitive conditions, and other risks referred to in the Company's
registration statements and periodic reports filed with the Securities and
Exchange Commission.
OVERVIEW
The Company's net sales have increased as a result of both
internal growth and acquisitions. The Company has completed five acquisitions in
the past six years: Dynarad (a designer and manufacturer of medical imaging
systems and critical electronic subsystems) in fiscal 1993; Bertan (a designer
and manufacturer of precision high voltage power supplies and instrumentation
for medical and industrial applications) in fiscal 1994; Gendex-Del (a
manufacturer of medical imaging systems) in fiscal 1996; X-Ray Technologies,
Inc. (a manufacturer of medical imaging systems) in fiscal 1998 and Acoma
Medical Imaging Inc. (a designer and manufacturer of medical imaging systems) in
fiscal 1999.
During the past five years the Company has grown internally and
through acquisitions into a company whose predominant business is serving the
medical imaging and diagnostic markets. The Company's net sales attributable to
medical imaging products have increased from approximately $14.4 million or 44%
of total net sales in fiscal 1995 to approximately $49.2 million or 72% of total
net sales in fiscal 1999.
Management believes that recent cost containment trends in the
healthcare industry have created opportunities for its cost-effective medical
imaging products in domestic and international markets. Some of these trends are
increased demand for lower cost medical equipment, the outsourcing of systems
and critical electronic subsystems by leading original equipment manufacturers
("OEMs"), increased demand for certain diagnostic procedures and lower cost
medical services in the global marketplace.
RESULTS OF OPERATIONS
Net sales for the three months ended January 29, 2000 were
approximately $17.5 million as compared to approximately $15.9 million for the
three months ended January 29, 1999, an increase of approximately 10%. Net sales
for the six months ended January 29, 2000 were approximately $33.2 million as
compared to approximately $30.7 million for the six months ended January 30,
1999, an increase of approximately 8%. These increases are due to internal
growth from existing operations.
Cost of sales, as a percentage of net sales for the three
months ended January 29, 2000, was 59.7% compared to 58.5% for the prior
corresponding period. Cost of sales, as a percentage of net sales for the six
months ended January 29, 2000, was 59.5% compared to 58.5% for the prior
corresponding period. These increases are due to a change in product mix in both
periods.
Research and development expenses were $1.7 million and $1.5
million for the three-month periods ended January 29, 2000 and January 30, 1999,
respectively, an increase of 12%. Research and development expenses increased to
approximately $3.3 million for the six months ended January 29, 2000 from
approximately $3.0 million for the six months ended January 30, 1999, an
increase of 10%. The increase was primarily due to new product development. The
Company continues to invest in research and development in order to introduce
new state-of-the-art products for its medical and industrial markets.
Selling, general and administrative expenses were approximately
$2.7 million for three-month periods ended January 29, 2000 and January 30,
1999, respectively, or 15.5% and 17.3% of net sales, a decrease of 1.8%.
Selling, general and administrative expenses were approximately $5.3 million, or
16% of
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<PAGE>
net sales, for the six months ended January 29, 2000 as compared to
approximately $5.4 million, or 17.5% of net sales, for the same period in the
prior year, a decrease of 1.2%.
Net interest expense was approximately $83,000 for the three
months ended January 29, 2000 as compared to approximately $16,000 for the
corresponding period in the prior year. Net interest expense was approximately
$145,000 for the six months ended January 29, 2000 as compared to approximately
$23,000 for the corresponding period in the prior year. This increase is due to
both higher interest rates and higher levels of long-term debt for both periods.
Income tax expense was 30.4% of pretax income for the three and
six months ended January 29, 2000 and 31% for the three and six months ended
January 30, 1999. The decrease from statutory rates is primarily due to sales
being made through the Company's Foreign Sales Corporation, research and
development and other tax credits.
Net income increased to approximately $1.8 million for the
three months ended January 29, 2000, an increase of 10.2% from approximately
$1.6 million for the prior corresponding period. Basic earnings per share at
January 29, 2000 increased to $.23 from $.21 at January 30, 1999, an increase of
9.5%. Diluted earnings per share increased to $.22 at January 29, 2000 from $.20
at January 30, 1999, an increase of 10.0%. The weighted number of common shares
outstanding increased to 7,813,017 at January 29, 2000 from 7,648,308 at January
30, 1999 and the number of common shares and common share equivalents
outstanding decreased to 8,163,980 at January 29, 2000 from 8,205,600 at January
30, 1999. Net income increased to approximately $3.3 million for the six months
ended January 29, 2000, an increase of 8.6% from approximately $3.0 million for
the prior corresponding period. Basic earnings per share at January 29, 2000
increased to $.42 from $.40 at January 30, 1999, an increase of 5.0%. Diluted
earnings per share increased to $.40 at January 29, 2000 from $.37 at January
30, 1999, an increase of 8.1%. The weighted number of common shares outstanding
increased to 7,799,511 at January 29, 2000 from 7,648,361 at January 30, 1999
and the number of common shares and common share equivalents outstanding
decreased to 8,167,878 at January 29, 2000 from 8,174,078 at January 30, 1999.
These increases in net income for the three and six-month periods ended January
29, 2000 were primarily due to higher sales.
The backlog of unshipped orders at January 29, 2000 was
approximately $45 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations and acquisitions through
a combination of cash flow from operations, bank borrowings and the issuance of
the Company's common stock.
Working Capital. At January 29, 2000 and July 31, 1999, the
Company's working capital was approximately $52.6 million and $47.8 million,
respectively. At such dates the Company had approximately $245,000 and $321,000,
respectively, in cash and cash equivalents.
Cost and estimated earnings in excess of billings on
uncompleted contracts increased to approximately $8.8 million at January 29,
2000 from approximately $6.4 million at July 31, 1999 due to additional work
performed in the six-month period on long-term contracts accounted for under the
percentage of completion method of accounting.
Inventory at January 29, 2000 increased approximately $1.1
million as compared to July 31, 1999 primarily because of higher sales levels of
major medical OEM contracts.
Prepaid expenses and other current assets at January 29, 2000
increased approximately $662,000 as compared to July 31, 1999 were primarily due
to additional expenses related to increased acquisition activity, prepaid
advertising and show expenses and prepaid insurance.
On December 28, 1999, the Company obtained a 19% interest in
Villa Sistemi Medicali S.p.A. ("Villa") located in Milan, Italy for a six-year
warrant to purchase 50,000 shares of Del Global Technologies Corp. common stock
at the fair market price on the date of issuance. This warrant is valued at
approximately
-10-
<PAGE>
$219,000 using the Black-Scholes method as prescribed by SFAS No. 123,
"Accounting for Stock-Based Compensation." In addition, the associated
transaction costs of this investment are approximately $340,000. Further, Villa
management has granted to the Company an exclusive irrevocable option to
purchase an additional 61% of the shares of Villa within 60 days after the
Company receives certified financial statements of Villa for the year ended
December 31, 1999.
Credit Facility and Borrowing. At January 29, 2000 the Company
had a $14.0 million revolving credit line and a $10.0 million acquisition credit
line. The available portion of the revolving credit line was approximately $10.8
million, after deducting outstanding letters of credit of approximately $24,000
and $7.5 million was available under its acquisition credit line.
Long-term debt increased approximately $2.9 million as compared
to July 31, 1999, primarily due to the investment in Villa, annual payment for
the selected assets purchased in December 1998, additional investments in
capital equipment and additional working capital requirements.
The Company anticipates that cash generated from operations and
amounts available under its bank lending facilities will be sufficient to
satisfy its currently projected operating cash needs.
Capital Expenditures. The Company continues to invest in
capital equipment, principally for its manufacturing operations, in order to
improve its manufacturing capability and capacity. The Company has expended
approximately $1.6 for capital equipment for the six-month period ended January
29, 2000.
Shareholders' Equity. Shareholders' equity increased to
approximately $69.7 million at January 29, 2000 from approximately $66.4 million
at July 31, 1999, primarily due to the results of operations. Additionally,
during the period 99,333 stock options were exercised, with proceeds of $133,925
and 79,453 shares of common stock were repurchased at a cost of approximately
$624,000.
Year 2000. To date, the Company has not encountered any
significant effects of the year 2000 issue either internally or with third
parties. The Company cannot guarantee that problems will not occur in the future
or have not yet been detected.
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
Disclosures about Derivative Instruments and Hedging
Activities. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. SFAS No. 133 is effective for all fiscal years beginning after
December 15, 1999. Management does not anticipate that this statement will have
any effect on the Company's consolidated financial statements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Not applicable.
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<PAGE>
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults on Senior Securities
None
Item 4. Submission to a Vote of Security Holders
At the annual meeting of stockholders of the Company held on
February 10, 2000, the stockholders:
(a) Elected the following directors: Natan V. Bertman,
David Michael, Seymour Rubin, James Tiernan, Leonard A.
Trugman and Roger J. Winston.
Election of Directors For Withheld
--------------------- --------- --------
Leonard A. Trugman 7,199,865 261,550
Natan V. Bertman 7,207,930 253,485
David Michael 7,210,756 250,659
Seymour Rubin 7,209,209 252,206
James Tiernan 7,206,724 254,691
Roger J. Winston 7,229,474 231,941
(b) Approved the proposal to increase by 750,000 the number
of shares of common stock reserved for issuance under
the Company's Amended and Restated Stock Option Plan.
For Against Abstain
--------- --------- -------
4,494,801 1,464,268 40,761
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 4.1 - Warrant Certificate of Laurence
Hirschhorn
Exhibit 4.2 - Warrant Certificate of Steven
Anreder
Exhibit 4.3 - Warrant Agreement and Warrant
Certificate of USB Capital S.p.A
Exhibit 11 - Computation of Earnings per Common
Share
Exhibit 27 - Financial Data Schedule
(b) Report on Form 8-K: None
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DEL GLOBAL TECHNOLOGIES CORP.
/S/LEONARD A. TRUGMAN
---------------------
Leonard A. Trugman
Chairman of the Board,
Chief Executive Officer
and President
/S/MICHAEL H. TABER
---------------------
Michael H. Taber
Chief Financial Officer,
Vice President of Finance
and Secretary
Dated: March 13, 2000
-13-
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
7,500 Warrants
Void after 5:00 p.m. New York time on October 6. 2004
WARRANT TO PURCHASE COMMON STOCK
OF
DEL GLOBAL TECHNOLOGIES CORP.
This warrant certificate ("Warrant Certificate") certifies that for
value received, Laurence Hirschhorn, 10 East 40th Street, Suite 1308,
New York, SS# ###-##-#### is the owner of the number of warrants
("Warrants") specified above, each of which entitles the holder thereof
to purchase, at any time on or before the Expiration Date, as
hereinafter defined, one fully paid and non-assessable share ("Share")
of common stock, par value $.10 per share ("Common Stock"), of Del
Global Technologies Corp. (the "Company"), a New York corporation, at a
purchase price of SEVEN DOLLARS AND SIXTY NINE CENTS ($7.69) per share
in lawful money of the United States of America in cash or by check or
a combination of cash and check, subject to adjustment as hereinafter
provided.
1. Warrant; Exercise Price; Payout Amount.
1.1. Each Warrant shall entitle the Warrant Holder the right to
purchase one Share of Common Stock of the Company (individually, a "Warrant
Share"; severally, the "Warrant Shares").
1.2. The purchase price payable upon exercise of each Warrant
("Exercise Price") shall be SEVEN DOLLARS AND SIXTY NINE CENTS ($7.69), subject
to adjustment as hereinafter provided. The Exercise Price and number of
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Warrants evidenced by each Warrant Certificate are subject to adjustment as
provided in Section 7 hereof.
2. Exercise of Warrant; Expiration Date.
2.1. This Warrant Certificate is exercisable, in whole or from
time to time in part, at the option of the Warrant Holder, at any time after the
date of issuance and on or before the Expiration Date, upon surrender of this
Warrant Certificate to the Company together with a duly completed exercise form
and payment of the Exercise Price. In the case of exercise of less than all the
Warrants represented by this Warrant Certificate, the Company shall cancel the
Warrant Certificate upon the surrender thereof and shall execute and deliver a
new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
on October 6, 2004, or if such date shall in the State of New York be a holiday
or a day on which banks are authorized to close, then 5:00 p.m. New York time
the next following day which in the State of New York is not a holiday or a day
on which banks are authorized to close, or in the event of any merger,
consolidation, or sale of all or substantially all the assets of the Company as
an entirety resulting in any distribution to the Company's stockholders prior to
the Expiration Date, the Warrant Holder shall have the right to exercise this
Warrant commencing at such time through the Expiration Date into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock into which this
Warrant might have been exercisable immediately prior thereto.
3. Registration and Transfer on Company Books.
3.1. The Company shall maintain books and records for the
registration and transfer of Warrant Certificates.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, the Company may deem and treat the registered holder as the
absolute owner thereof.
3.3. The Company shall register upon its books any transfer of a
Warrant Certificate upon surrender of same to the Company accompanied by a
written instrument of transfer duly executed by the registered holder. Upon any
such registration of transfer, new Warrant Certificate(s) shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled by the
Company. A Warrant Certificate may also be exchanged, at the option of the
holder, for new Warrant
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Certificates representing in the aggregate the number of Warrants evidenced by
the Warrant Certificate surrendered.
4. Reservation of Shares. The Company covenants that it will at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issuance upon exercise of the Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof, and that upon issuance such shares shall be
listed on each national securities exchange, if any, on which the other shares
of outstanding Common Stock of the Company are then listed.
5. Exchange, Transfer, Assignment, Loss or Mutilation of Warrant
Certificate. This Warrant Certificate is exchangeable, without expense, at the
option of the Warrant Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other Warrants
of different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder. This
Warrant Certificate may be transferred or assigned by the Warrant Holder upon
surrender of this Warrant Certificate to the Company at its principal office or
at the office of its transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax. Upon such
surrender the Company shall, without charge, execute and deliver a new Warrant
Certificate in the name of the assignee named in such instrument of assignment
and this Warrant Certificate shall be promptly canceled. This Warrant may be
divided or combined with other warrants which carry the same rights upon
presentation hereof at the principal office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Warrant Holder hereof. The term "Warrant Certificate" as used herein includes
any Warrant Certificates into which this Warrant Certificate may be divided or
exchanged. Upon receipt by the Company of reasonable evidence of the ownership
of and the loss, theft, destruction or mutilation of this Warrant Certificate
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company, or, in the case of mutilation, upon surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver in lieu thereof a new Warrant Certificate of like tenor and date
representing an equal number of Warrants.
6. Rights of the Holder. The Warrant Holder shall not, by virtue
hereof, be entitled to any voting or other rights of a stockholder in the
Company, either at law or equity, and the rights of the Warrant Holder are
limited to
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those expressed in the Warrant Certificate and are not enforceable against the
Company except to the extent set forth herein.
7. Adjustment of Exercise Price and Number of Shares Deliverable. The
Exercise Price and the number of shares of Common Stock purchasable pursuant to
each Warrant shall be subject to adjustment from time to time as hereinafter set
forth in this Section 7:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date
of such subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to
such action, and the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (a) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously
be adjusted by multiplying the number of Shares initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the
date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(c) Notwithstanding the provisions of Subsections (a) and (b) of
this Section 7, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($0.05) in such price; provided, however, that any
adjustments which by reason of this Subsection (c) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations
under this Section 7 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything in this
Section 7 to the contrary
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notwithstanding, the Company shall be entitled, but shall not be
required, to make such changes in the Exercise Price, in addition to
those required by this Section 7, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution
in shares of Common Stock, or any subdivision, reclassification or
combination of Common Stock hereafter made by the Company, shall not
result in any Federal income tax liability to the holders of Common
Stock or securities convertible into Common Stock (including
Warrants).
(d) Whenever the Exercise Price is adjusted as herein provided,
the Company shall promptly cause a notice setting forth the adjusted
Exercise Price and adjusted number of Shares issuable upon exercise of
each Warrant, and if requested by the Warrant Holder, information
describing the transactions giving rise to such adjustments, to be
mailed to the Warrant Holders at their last addresses appearing in the
books and records of the Company, and shall cause a certified copy
thereof to be mailed to its transfer agent, if any. The Company may
retain a firm of independent certified public accountants selected by
the Board of Directors (who may be the regular accountants employed by
the Company) to make any computation required by this Section 7, and a
certificate signed by such firm shall be conclusive evidence of the
correctness of such adjustment.
(e) In the event that at any time, as a result of an adjustment
made pursuant to Subsection (a) above, the Warrant Holder of this
Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (a) to (c), inclusive above.
(f) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Warrant Certificate.
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8. Fractional Shares. No certificate for fractional Shares shall be
issued upon the exercise of the Warrants. With respect to any fraction of a
Share called for upon any exercise hereof, the Company shall pay to the Warrant
Holder an amount in cash equal to such fraction calculated to the nearest cent
multiplied by the current market value of a Share, determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the NASDAQ system, the current market value
of a Share shall be the last reported sale price per Share of the
Common Stock on such exchange or system on the last business day prior
to the date of exercise of this Warrant or if no such sale is made on
such day, the average of the closing bid and asked prices per Share
for such day on such exchange or system; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value of a Share shall be the
mean of the last reported bid and asked prices per Share reported by
the National Quotation Bureau, Inc. on the last business day prior to
the date of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value of a Share shall be an amount, not less than book
value thereof, as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board
of Directors of the Company.
9. Officer's Certificate. Whenever the Exercise Price shall be adjusted
as required by the provisions of Section 7 hereof, the Company shall forthwith
file in the custody of its Secretary or Assistant Secretary at its principal
office and with its stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price as herein provided setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the holder or any holder of a Warrant
executed and delivered pursuant to Section 2, and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Warrant Holder or any such holder.
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10. Notices to Warrant Holders. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock; or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any shares of any class or any
other rights; or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Warrant Holder, at least fifteen days
prior to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any, which is to be fixed, as of which the holders of Common Stock
or other securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
11. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Warrant Holder shall have the right thereafter by exercising this Warrant at any
time prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 11 shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation,
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merger, sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (a) of
Section 7 hereof.
12. Voluntary Adjustment by the Company. The Company may, at its
option, at any time prior to the Expiration Date, reduce the then current
Exercise Price to any amount deemed appropriate by the Board of Directors of the
Company and/or extend the date of the expiration of the Warrants.
13. Registration Under the Securities Act of 1933. The Warrant Holder
shall be entitled to the following registration rights;
(a) Demand Rights. The Company covenants and agrees that, during
the two (2) year period commencing on the exercise of this warrant,
within forty-five (45) days after the receipt of a written request
from the Warrant holder, or a majority of holders if there is more
than one holder, that he desires and intends to transfer all or a
portion of his Shares under such circumstances that a public offering,
within the meaning of the Securities Act of 1933, as amended (the
"Act"), will be involved, the Company shall file with the Securities
and Exchange Commission (the "Commission") with all deliberate speed a
Registration Statement on Form S-3 (or any shortform successor
thereto), or if not eligible for the use of Form S-3, any other Form,
covering all such securities and use its best efforts to cause such
Registration Statement with respect to such securities to become
effective under the Act. The Company shall pay all costs of preparing
and filing such Registration Statement. The Company shall not be
required to comply with more than one request for registration
pursuant to this Section 13(a). The Company need not comply with any
request for registration pursuant to this Section 13(a) if at such
time the Company would be required to use, in connection with the
filing of the Registration Statement, pursuant to the requirements of
the Act and the rules and regulations of the Commission thereunder,
audited financial statements as of a date other than the end of a
fiscal year of the Company. If the Company includes Shares to be sold
by it in any registration requested pursuant to
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this Section 13(a), such registration shall be deemed to have been a
registration under Section 13 (b).
(b) Piggyback Rights. If at any time after the date hereof, the
Company shall propose to file a registra tion statement ("Registration
Statement") under the Act (o ther than a reorganization or an offering
pursuant to a stock option or other employee benefit plan or an of
fering on Form S-4 or S-5 (or any successor forms thereto) relating to
an acquisition of another corporation), then, during the two(2) year
period commencing on the date hereof, and subject to Subsection (3) of
this Section 13(b), the Company shall in each case deliver written
notice thereof to the Holder of this Warrant or of the Warrant Shares
and/or any then holder of Warrants or Warrant Shares (such persons
being collectively referred to herein as " holders") at least 15 days
before the anticipated filing date. Such notice shall offer to each
holder the option to include Warrant Shares in such Registration
Statement, subject to the conditions set forth in this Section 13(b);
provided, however, that the Company shall be under no obligation to
register Warrant Shares of any holder if in the opinion of counsel to
such holder no registration under the Act is required with respect to
a public disposition of such Warrant Shares.
(1)Should a holder desire to have any Warrant Shares
registered under this Section 13(b), such holder shall so advise
in writing no later than 15 days after the date of receipt by the
holder of the Company's written notice, setting forth the number
of such Warrant Shares for which registration is requested.
Subject to Subsection (3) of this Section 13(b), the Company
shall thereupon include in such Registration Statement such
Warrant Shares.
(2)Neither the giving of notice by the Company nor any
request by any holders to register Warrant Shares pursuant to
this Section 13(b) shall in any way obligate the Company to file
any such Registration Statement, and notwithstanding the filing
of such Registration Statement, the Company may, at any time
prior to the effective date thereof, determine not to offer the
securities to which such registration relates and/or withdraw the
Registration Statement from the Commission, without liability of
the Company to any holders.
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(3)If the securities covered by such Registration Statement
are to be sold by underwriters in an underwritten public offering
(including, without limitation, a so-called "best efforts"
undertaking by an underwriter), the Company shall use its best
efforts to cause the managing underwriter, if any, of a proposed
offering to grant a request by a holder that Warrant Shares be
included in the proposed offering on terms and conditions which
are customary industry practice for such underwriter under the
existing circumstance, provided that any Warrant Shares to be
sold by holders pursuant to this Section 13(b), shall be sold or
distributed in a manner identical to the manner in which the
securities which are the subject of such Registration Statement
are to be sold or distributed. Notwithstanding the foregoing, if
any such managing underwriter shall advise the Company in writing
that, in good faith and in its reasonable opinion, the
distribution of Warrant Shares requested to be included in the
Registration Statement concurrently with the securities being
registered by the Company would adversely affect the distribution
of such securities by such underwriters, the Company shall give
notice of such determination to the holders requesting
registration, and the number of Warrant Shares proposed to be
offered by the holders and any other persons other than the
Company shall be reduced pro rata (as specified by the Company in
such notice) to aggregate a quantity of Warrant Shares (so
specified) which said managing underwriter shall not consider
excessive.
(4)The rights of holders to have their Warrant Shares be
included in any Registration Statement pursuant to the provisions
of Section 13(b) of this Warrant Certificate, shall be subject to
the condition that the holders requesting registration shall
furnish to the Company in writing such information and documents
as may be reasonably required to properly prepare and file such
Registration Statement in accordance with applicable provisions
of the Act.
(5)The Company shall bear the entire cost and expense of any
registration of securities initiated by it notwithstanding that
Warrant Shares may be included in any such registration. Any
holder whose Warrant Shares are included in any such registration
statement pursuant to this Section 13(b) shall, however, bear the
fees of his own counsel and any registration
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fees, transfer taxes or underwriting discounts or commissions
applicable to the Warrant Shares sold by him pursuant thereto.
(c) Indemnification. (i) The Company shall indemnify and
hold harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrant Shares (collectively, "Indemnified Persons")
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 13 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused
by any such untrue statement or alleged untrue statement or
omission or alleged omission based upon information furnished or
required to be furnished in writing to the Company by such holder
or underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that the Company shall not be obliged so to indemnify any such
holder, underwriter or controlling person unless such holder,
underwriter or controlling person shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement and each person, if any, who
controls the Company within the meaning of such Act, from and
against any and all losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any
prospectus required to be filed or furnished by reason of this
Section 13 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, insofar
as such losses, claims, damages or liabilities are caused by any
untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished or required to
be furnished in writing to the Company by any such holder,
underwriter or controlling person expressly for use therein.
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(ii) The holders registering Warrant Shares pursuant to this
Warrant Certificate shall indemnify and hold harmless the
Company, its directors and officers, and each person, if any who
controls the Company within the meaning of either Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), to the same extent as the indemnity
from the Company to each Indemnified Person set forth in
paragraph (i) of this Subsection (c), but only with respect to
information relating to such Indemnified Person furnished in
writing by such Indemnified Person to the Company expressly for
use in the Registration Statement or related Prospectus
(preliminary or final), or any amendment or supplement thereto.
In case any action or proceeding shall be brought against the
Company or its directors or officers or any such controlling
person, in respect of which indemnity may be sought against a
holder, each shall have the rights and duties given to the
Company and the Company or its directors or its officers or its
controlling persons each shall have the rights and duties given
to a holder by Subsection (c).
(iii) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in this Section 13(c) is due in accordance with its
terms but is, for any reason, held by a court to be unavailable,
the Company and the holders shall contribute to the aggregate
losses, claims, damages and liabilities (including reasonable
legal or other expenses incurred in connection with investigation
or defending of same) to which the Company and the holders may be
subject based on their comparative fault; provided, however, that
no holder shall have any liability hereunder in excess of the
gross proceeds realized by such holder from the sale by it of the
Warrant Shares to which the third party claim relates; provided,
further, however, that no person who has committed an intentional
misrepresentation shall be entitled to contribution from any
person who has not committed an intentional misrepresentation.
For the purposes of this paragraph (iii) any person controlling,
controlled by or under common control with the holders, or any
partner, director, officer, employee, representative or agent of
any thereof, shall have the same rights to contribution as the
holders, and each person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act, each officer and each director of the Company shall have the
same rights to contribution as the Company. Any party entitled to
contribution shall, promptly after
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receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against the other party under this
paragraph (iii), notify such party from whom contribution may be
sought, but the omission to so notify such party shall not
relieve the party from which contribution may be sought from any
obligation it or they may have hereunder or otherwise.
The Company's agreements with respect to Warrant Shares in this Section
13 shall continue in effect regardless of the exercise and surrender of this
Warrant.
14. Governing Law. This Warrant Certificate shall be governed by,
enforced and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of law thereof. IN WITNESS
WHEREOF, the Company has caused this Warrant Certificate to be duly executed by
its officers thereunto duly authorized and its corporate seal to be affixed
herein.
DEL GLOBAL TECHNOLOGIES CORP.
By:/S/LEONARD A. TRUGMAN
---------------------
Name: Leonard A. Trugman
Title: Chairman, CEO and President
[SEAL]
Dated: January 11, 2000
Attest:
/S/MICHAEL TABER
- ---------------------------
Michael Taber, Secretary
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EXERCISE FORM
Dated: ________________, 20__
The undersigned hereby irrevocably elects to exercise the right to
purchase __________ shares of Common Stock covered by this Warrant according to
the conditions hereof and herewith makes payment of the Exercise Price for such
shares in full.
--------------------------------
Signature [Print Name]
--------------------------------
(STREET ADDRESS)
--------------------------------
(CITY) (STATE) (ZIP CODE)
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________________________________
hereby sells, assigns and transfers unto
Name _________________________________________________________________________
(Please typewrite or print in bold letters)
Address_______________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _____________________ Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Date _____________, 20__
Signature __________________________
[PRINT NAME]
15
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
7,500 Warrants
Void after 5:00 p.m. New York time on October 6. 2004
WARRANT TO PURCHASE COMMON STOCK
OF
DEL GLOBAL TECHNOLOGIES CORP.
This warrant certificate ("Warrant Certificate") certifies that for
value received, Steven Anreder, 10 East 40th Street, Suite 1308, New
York, SS# ###-##-#### is the owner of the number of warrants
("Warrants") specified above, each of which entitles the holder thereof
to purchase, at any time on or before the Expiration Date, as
hereinafter defined, one fully paid and non-assessable share ("Share")
of common stock, par value $.10 per share ("Common Stock"), of Del
Global Technologies Corp. (the "Company"), a New York corporation, at a
purchase price of SEVEN DOLLARS AND SIXTY NINE CENTS ($7.69) per share
in lawful money of the United States of America in cash or by check or
a combination of cash and check, subject to adjustment as hereinafter
provided.
1. Warrant; Exercise Price; Payout Amount.
1.1. Each Warrant shall entitle the Warrant Holder the right to
purchase one Share of Common Stock of the Company (individually, a "Warrant
Share"; severally, the "Warrant Shares").
1.2. The purchase price payable upon exercise of each Warrant
("Exercise Price") shall be SEVEN DOLLARS AND SIXTY NINE CENTS ($7.69), subject
to adjustment as hereinafter provided. The Exercise Price and number of
<PAGE>
Warrants evidenced by each Warrant Certificate are subject to adjustment as
provided in Section 7 hereof.
2. Exercise of Warrant; Expiration Date.
2.1. This Warrant Certificate is exercisable, in whole or from
time to time in part, at the option of the Warrant Holder, at any time after the
date of issuance and on or before the Expiration Date, upon surrender of this
Warrant Certificate to the Company together with a duly completed exercise form
and payment of the Exercise Price. In the case of exercise of less than all the
Warrants represented by this Warrant Certificate, the Company shall cancel the
Warrant Certificate upon the surrender thereof and shall execute and deliver a
new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
on October 6, 2004, or if such date shall in the State of New York be a holiday
or a day on which banks are authorized to close, then 5:00 p.m. New York time
the next following day which in the State of New York is not a holiday or a day
on which banks are authorized to close, or in the event of any merger,
consolidation, or sale of all or substantially all the assets of the Company as
an entirety resulting in any distribution to the Company's stockholders prior to
the Expiration Date, the Warrant Holder shall have the right to exercise this
Warrant commencing at such time through the Expiration Date into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock into which this
Warrant might have been exercisable immediately prior thereto.
3. Registration and Transfer on Company Books.
3.1. The Company shall maintain books and records for the
registration and transfer of Warrant Certificates.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, the Company may deem and treat the registered holder as the
absolute owner thereof.
3.3. The Company shall register upon its books any transfer of a
Warrant Certificate upon surrender of same to the Company accompanied by a
written instrument of transfer duly executed by the registered holder. Upon any
such registration of transfer, new Warrant Certificate(s) shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled by the
Company. A Warrant Certificate may also be exchanged, at the option of the
holder, for new Warrant
2
<PAGE>
Certificates representing in the aggregate the number of Warrants evidenced by
the Warrant Certificate surrendered.
4. Reservation of Shares. The Company covenants that it will at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issuance upon exercise of the Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof, and that upon issuance such shares shall be
listed on each national securities exchange, if any, on which the other shares
of outstanding Common Stock of the Company are then listed.
5. Exchange, Transfer, Assignment, Loss or Mutilation of Warrant
Certificate. This Warrant Certificate is exchangeable, without expense, at the
option of the Warrant Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other Warrants
of different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder. This
Warrant Certificate may be transferred or assigned by the Warrant Holder upon
surrender of this Warrant Certificate to the Company at its principal office or
at the office of its transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax. Upon such
surrender the Company shall, without charge, execute and deliver a new Warrant
Certificate in the name of the assignee named in such instrument of assignment
and this Warrant Certificate shall be promptly canceled. This Warrant may be
divided or combined with other warrants which carry the same rights upon
presentation hereof at the principal office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Warrant Holder hereof. The term "Warrant Certificate" as used herein includes
any Warrant Certificates into which this Warrant Certificate may be divided or
exchanged. Upon receipt by the Company of reasonable evidence of the ownership
of and the loss, theft, destruction or mutilation of this Warrant Certificate
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company, or, in the case of mutilation, upon surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver in lieu thereof a new Warrant Certificate of like tenor and date
representing an equal number of Warrants.
6. Rights of the Holder. The Warrant Holder shall not, by virtue
hereof, be entitled to any voting or other rights of a stockholder in the
Company, either at law or equity, and the rights of the Warrant Holder are
limited to
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<PAGE>
those expressed in the Warrant Certificate and are not enforceable against the
Company except to the extent set forth herein.
7. Adjustment of Exercise Price and Number of Shares Deliverable. The
Exercise Price and the number of shares of Common Stock purchasable pursuant to
each Warrant shall be subject to adjustment from time to time as hereinafter set
forth in this Section 7:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date
of such subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to
such action, and the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (a) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously
be adjusted by multiplying the number of Shares initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the
date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(c) Notwithstanding the provisions of Subsections (a) and (b) of
this Section 7, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($0.05) in such price; provided, however, that any
adjustments which by reason of this Subsection (c) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations
under this Section 7 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything in this
Section 7 to the contrary
4
<PAGE>
notwithstanding, the Company shall be entitled, but shall not be
required, to make such changes in the Exercise Price, in addition to
those required by this Section 7, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution
in shares of Common Stock, or any subdivision, reclassification or
combination of Common Stock hereafter made by the Company, shall not
result in any Federal income tax liability to the holders of Common
Stock or securities convertible into Common Stock (including
Warrants).
(d) Whenever the Exercise Price is adjusted as herein provided,
the Company shall promptly cause a notice setting forth the adjusted
Exercise Price and adjusted number of Shares issuable upon exercise of
each Warrant, and if requested by the Warrant Holder, information
describing the transactions giving rise to such adjustments, to be
mailed to the Warrant Holders at their last addresses appearing in the
books and records of the Company, and shall cause a certified copy
thereof to be mailed to its transfer agent, if any. The Company may
retain a firm of independent certified public accountants selected by
the Board of Directors (who may be the regular accountants employed by
the Company) to make any computation required by this Section 7, and a
certificate signed by such firm shall be conclusive evidence of the
correctness of such adjustment.
(e) In the event that at any time, as a result of an adjustment
made pursuant to Subsection (a) above, the Warrant Holder of this
Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (a) to (c), inclusive above.
(f) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Warrant Certificate.
5
<PAGE>
8. Fractional Shares. No certificate for fractional Shares shall be
issued upon the exercise of the Warrants. With respect to any fraction of a
Share called for upon any exercise hereof, the Company shall pay to the Warrant
Holder an amount in cash equal to such fraction calculated to the nearest cent
multiplied by the current market value of a Share, determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the NASDAQ system, the current market value
of a Share shall be the last reported sale price per Share of the
Common Stock on such exchange or system on the last business day prior
to the date of exercise of this Warrant or if no such sale is made on
such day, the average of the closing bid and asked prices per Share
for such day on such exchange or system; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value of a Share shall be the
mean of the last reported bid and asked prices per Share reported by
the National Quotation Bureau, Inc. on the last business day prior to
the date of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value of a Share shall be an amount, not less than book
value thereof, as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board
of Directors of the Company.
9. Officer's Certificate. Whenever the Exercise Price shall be adjusted
as required by the provisions of Section 7 hereof, the Company shall forthwith
file in the custody of its Secretary or Assistant Secretary at its principal
office and with its stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price as herein provided setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the holder or any holder of a Warrant
executed and delivered pursuant to Section 2, and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Warrant Holder or any such holder.
6
<PAGE>
10. Notices to Warrant Holders. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock; or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any shares of any class or any
other rights; or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Warrant Holder, at least fifteen days
prior to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any, which is to be fixed, as of which the holders of Common Stock
or other securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
11. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Warrant Holder shall have the right thereafter by exercising this Warrant at any
time prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 11 shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation,
7
<PAGE>
merger, sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (a) of
Section 7 hereof.
12. Voluntary Adjustment by the Company. The Company may, at its
option, at any time prior to the Expiration Date, reduce the then current
Exercise Price to any amount deemed appropriate by the Board of Directors of the
Company and/or extend the date of the expiration of the Warrants.
13. Registration Under the Securities Act of 1933. The Warrant Holder
shall be entitled to the following registration rights;
(a) Demand Rights. The Company covenants and agrees that, during
the two (2) year period commencing on the exercise of this warrant,
within forty-five (45) days after the receipt of a written request
from the Warrant holder, or a majority of holders if there is more
than one holder, that he desires and intends to transfer all or a
portion of his Shares under such circumstances that a public offering,
within the meaning of the Securities Act of 1933, as amended (the
"Act"), will be involved, the Company shall file with the Securities
and Exchange Commission (the "Commission") with all deliberate speed a
Registration Statement on Form S-3 (or any shortform successor
thereto), or if not eligible for the use of Form S-3, any other Form,
covering all such securities and use its best efforts to cause such
Registration Statement with respect to such securities to become
effective under the Act. The Company shall pay all costs of preparing
and filing such Registration Statement. The Company shall not be
required to comply with more than one request for registration
pursuant to this Section 13(a). The Company need not comply with any
request for registration pursuant to this Section 13(a) if at such
time the Company would be required to use, in connection with the
filing of the Registration Statement, pursuant to the requirements of
the Act and the rules and regulations of the Commission thereunder,
audited financial statements as of a date other than the end of a
fiscal year of the Company. If the Company includes Shares to be sold
by it in any registration requested pursuant to
8
<PAGE>
this Section 13(a), such registration shall be deemed to have been a
registration under Section 13 (b).
(b) Piggyback Rights. If at any time after the date hereof, the
Company shall propose to file a registra tion statement ("Registration
Statement") under the Act (o ther than a reorganization or an offering
pursuant to a stock option or other employee benefit plan or an of
fering on Form S-4 or S-5 (or any successor forms thereto) relating to
an acquisition of another corporation), then, during the two(2) year
period commencing on the date hereof, and subject to Subsection (3) of
this Section 13(b), the Company shall in each case deliver written
notice thereof to the Holder of this Warrant or of the Warrant Shares
and/or any then holder of Warrants or Warrant Shares (such persons
being collectively referred to herein as " holders") at least 15 days
before the anticipated filing date. Such notice shall offer to each
holder the option to include Warrant Shares in such Registration
Statement, subject to the conditions set forth in this Section 13(b);
provided, however, that the Company shall be under no obligation to
register Warrant Shares of any holder if in the opinion of counsel to
such holder no registration under the Act is required with respect to
a public disposition of such Warrant Shares.
(1)Should a holder desire to have any Warrant Shares
registered under this Section 13(b), such holder shall so advise
in writing no later than 15 days after the date of receipt by the
holder of the Company's written notice, setting forth the number
of such Warrant Shares for which registration is requested.
Subject to Subsection (3) of this Section 13(b), the Company
shall thereupon include in such Registration Statement such
Warrant Shares.
(2)Neither the giving of notice by the Company nor any
request by any holders to register Warrant Shares pursuant to
this Section 13(b) shall in any way obligate the Company to file
any such Registration Statement, and notwithstanding the filing
of such Registration Statement, the Company may, at any time
prior to the effective date thereof, determine not to offer the
securities to which such registration relates and/or withdraw the
Registration Statement from the Commission, without liability of
the Company to any holders.
9
<PAGE>
(3)If the securities covered by such Registration Statement
are to be sold by underwriters in an underwritten public offering
(including, without limitation, a so-called "best efforts"
undertaking by an underwriter), the Company shall use its best
efforts to cause the managing underwriter, if any, of a proposed
offering to grant a request by a holder that Warrant Shares be
included in the proposed offering on terms and conditions which
are customary industry practice for such underwriter under the
existing circumstance, provided that any Warrant Shares to be
sold by holders pursuant to this Section 13(b), shall be sold or
distributed in a manner identical to the manner in which the
securities which are the subject of such Registration Statement
are to be sold or distributed. Notwithstanding the foregoing, if
any such managing underwriter shall advise the Company in writing
that, in good faith and in its reasonable opinion, the
distribution of Warrant Shares requested to be included in the
Registration Statement concurrently with the securities being
registered by the Company would adversely affect the distribution
of such securities by such underwriters, the Company shall give
notice of such determination to the holders requesting
registration, and the number of Warrant Shares proposed to be
offered by the holders and any other persons other than the
Company shall be reduced pro rata (as specified by the Company in
such notice) to aggregate a quantity of Warrant Shares (so
specified) which said managing underwriter shall not consider
excessive.
(4)The rights of holders to have their Warrant Shares be
included in any Registration Statement pursuant to the provisions
of Section 13(b) of this Warrant Certificate, shall be subject to
the condition that the holders requesting registration shall
furnish to the Company in writing such information and documents
as may be reasonably required to properly prepare and file such
Registration Statement in accordance with applicable provisions
of the Act.
(5)The Company shall bear the entire cost and expense of any
registration of securities initiated by it notwithstanding that
Warrant Shares may be included in any such registration. Any
holder whose Warrant Shares are included in any such registration
statement pursuant to this Section 13(b) shall, however, bear the
fees of his own counsel and any registration
10
<PAGE>
fees, transfer taxes or underwriting discounts or commissions
applicable to the Warrant Shares sold by him pursuant thereto.
(c) Indemnification. (i) The Company shall indemnify and
hold harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrant Shares (collectively, "Indemnified Persons")
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 13 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused
by any such untrue statement or alleged untrue statement or
omission or alleged omission based upon information furnished or
required to be furnished in writing to the Company by such holder
or underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that the Company shall not be obliged so to indemnify any such
holder, underwriter or controlling person unless such holder,
underwriter or controlling person shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement and each person, if any, who
controls the Company within the meaning of such Act, from and
against any and all losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any
prospectus required to be filed or furnished by reason of this
Section 13 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, insofar
as such losses, claims, damages or liabilities are caused by any
untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished or required to
be furnished in writing to the Company by any such holder,
underwriter or controlling person expressly for use therein.
11
<PAGE>
(ii) The holders registering Warrant Shares pursuant to this
Warrant Certificate shall indemnify and hold harmless the
Company, its directors and officers, and each person, if any who
controls the Company within the meaning of either Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), to the same extent as the indemnity
from the Company to each Indemnified Person set forth in
paragraph (i) of this Subsection (c), but only with respect to
information relating to such Indemnified Person furnished in
writing by such Indemnified Person to the Company expressly for
use in the Registration Statement or related Prospectus
(preliminary or final), or any amendment or supplement thereto.
In case any action or proceeding shall be brought against the
Company or its directors or officers or any such controlling
person, in respect of which indemnity may be sought against a
holder, each shall have the rights and duties given to the
Company and the Company or its directors or its officers or its
controlling persons each shall have the rights and duties given
to a holder by Subsection (c).
(iii) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in this Section 13(c) is due in accordance with its
terms but is, for any reason, held by a court to be unavailable,
the Company and the holders shall contribute to the aggregate
losses, claims, damages and liabilities (including reasonable
legal or other expenses incurred in connection with investigation
or defending of same) to which the Company and the holders may be
subject based on their comparative fault; provided, however, that
no holder shall have any liability hereunder in excess of the
gross proceeds realized by such holder from the sale by it of the
Warrant Shares to which the third party claim relates; provided,
further, however, that no person who has committed an intentional
misrepresentation shall be entitled to contribution from any
person who has not committed an intentional misrepresentation.
For the purposes of this paragraph (iii) any person controlling,
controlled by or under common control with the holders, or any
partner, director, officer, employee, representative or agent of
any thereof, shall have the same rights to contribution as the
holders, and each person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act, each officer and each director of the Company shall have the
same rights to contribution as the Company. Any party entitled to
contribution shall, promptly after
12
<PAGE>
receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against the other party under this
paragraph (iii), notify such party from whom contribution may be
sought, but the omission to so notify such party shall not
relieve the party from which contribution may be sought from any
obligation it or they may have hereunder or otherwise.
The Company's agreements with respect to Warrant Shares in this Section
13 shall continue in effect regardless of the exercise and surrender of this
Warrant.
14. Governing Law. This Warrant Certificate shall be governed by,
enforced and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of law thereof. IN WITNESS
WHEREOF, the Company has caused this Warrant Certificate to be duly executed by
its officers thereunto duly authorized and its corporate seal to be affixed
herein.
DEL GLOBAL TECHNOLOGIES CORP.
By:/S/LEONARD A. TRUGMAN
---------------------
Name: Leonard A. Trugman
Title: Chairman, CEO and President
[SEAL]
Dated: January 11, 2000
Attest:
/S/MICHAEL TABER
- ---------------------------
Michael Taber, Secretary
13
<PAGE>
EXERCISE FORM
Dated: ________________, 20__
The undersigned hereby irrevocably elects to exercise the right to
purchase __________ shares of Common Stock covered by this Warrant according to
the conditions hereof and herewith makes payment of the Exercise Price for such
shares in full.
--------------------------------
Signature [Print Name]
--------------------------------
(STREET ADDRESS)
--------------------------------
(CITY) (STATE) (ZIP CODE)
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________________________________
hereby sells, assigns and transfers unto
Name _________________________________________________________________________
(Please typewrite or print in bold letters)
Address_______________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _____________________ Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Date _____________, 20__
Signature __________________________
[PRINT NAME]
15
NEITHER THE WARRANTS EVIDENCED BY THIS WARRANT
CERTIFICATE NOR THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. NEITHER SUCH
WARRANTS NOR SUCH UNDERLYING SHARES MAY BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
50,000 Warrants
Void after 5:00 p.m. New York City time on December 28, 2005
WARRANT TO PURCHASE COMMON STOCK
OF
DEL GLOBAL TECHNOLOGIES CORP.
This warrant certificate ("Warrant Certificate") certifies
that, for value received, UBS Capital Sp.A. or registered assigns (the "Warrant
Holder") is the owner of the number of warrants (each, a "Warrant") specified
above, each of which entitles the holder thereof to purchase, at any time on or
before the Expiration Date, as hereinafter defined, one fully paid and
non-assessable share ("Share") of the common stock, par value $.10 per share
(the "Common Stock"), of Del Global Technologies Corp., a New York corporation
(the "Company"), at the Exercise Price as provided below, payable in lawful
money of the United States of America in cash or by check or a combination of
cash and check, subject to adjustment as hereinafter provided.
1. Warrant; Exercise Price; Payout Amount.
--------------------------------------
1.1. Each Warrant shall entitle the Warrant
Holder the right to purchase one Share of Common Stock of the Company
(individually, a "Warrant Share"; severally, the "Warrant Shares") in the six
year period terminating on December 28, 2005.
1.2. The purchase price payable upon exercise of
each Warrant("Exercise Price") shall be 7 15/16 DOLLARS ($7.9375), subject to
adjustment as hereinafter provided. The Exercise Price and number of Warrants
evidenced by each Warrant Certificate are subject to adjustment as provided in
Section 7 hereof.
2. Exercise of Warrant; Expiration Date.
-------------------------------------
2.1. This Warrant Certificate is exercisable, in
whole or from time to time in part, at the option of the Warrant Holder, at any
time after the date of issuance and on or before the Expiration Date, upon
surrender of this Warrant Certificate to the Company together with a duly
completed exercise form and payment of the Exercise Price. In the case of
exercise of less
03\279\war-ubs.03.wpd
1
<PAGE>
than all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00
p.m. New York City time on December 28, 2005, or if such date shall in the State
of New York be a holiday or a day on which banks are authorized to close, then
5:00 p.m. New York City time the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close, or in the
event of any merger, consolidation, or sale of all or substantially all the
assets of the Company as an entirety resulting in any conversion of the Common
Stock or distribution to the Company's stockholders prior to the Expiration
Date, the Warrant Holder shall have the right to exercise this Warrant
commencing at such time through the Expiration Date into the kind and amount of
shares of stock and other securities and property (including cash) receivable by
a holder of the number of shares of Common Stock into which this Warrant might
have been exercisable immediately prior thereto.
3. Registration and Transfer on Company Books.
------------------------------------------
3.1. The Company shall maintain books and records
for the registration and transfer of Warrant Certificates.
3.2. Prior to due presentment for registration of
transfer of this Warrant Certificate, the Company may deem and treat the
registered holder as the absolute owner thereof.
3.3. The Company shall register upon its books
any transfer of a Warrant Certificate upon surrender of same to the Company
accompanied by a written instrument of transfer duly executed by the registered
holder. Upon any such registration of transfer, new Warrant Certificate(s) shall
be issued to the transferee(s) and the surrendered Warrant Certificate shall be
canceled by the Company. A Warrant Certificate may also be exchanged, at the
option of the holder, for new Warrant Certificates representing in the aggregate
the number of Warrants evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares. The Company covenants that it
will at all times reserve and keep available out of its authorized Common Stock,
solely for the purpose of issuance upon exercise of the Warrants, such number of
shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be issuable upon exercise of the Warrants shall be duly and validly
issued and fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issuance thereof, and that upon issuance such shares
shall be listed on each national securities exchange, if any, on which the other
shares of outstanding Common Stock of the Company are then listed.
5. Exchange, Transfer, Assignment, Loss or Mutilation
of Warrant Certificate. This Warrant Certificate is exchangeable, without
expense, at the option of the Warrant Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrant Certificates of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Common Stock
03\279\war-ubs.03.wpd
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<PAGE>
purchasable hereunder. This Warrant Certificate may be transferred or assigned
by the Warrant Holder upon surrender of this Warrant Certificate to the Company
at its principal office or at the office of its transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax. Upon such surrender the Company shall, without charge, execute and
deliver a new Warrant Certificate in the name of the assignee named in such
instrument of assignment and this Warrant Certificate shall be promptly
canceled. This Warrant Certificate may be divided or combined with other warrant
certificates which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and denominations in
which new Warrant Certificates are to be issued and signed by the Warrant Holder
hereof. The term "Warrant Certificate" as used herein includes any Warrant
Certificates into which this Warrant Certificate may be divided or exchanged.
Upon receipt by the Company of reasonable evidence of the ownership of and the
loss, theft, destruction or mutilation of this Warrant Certificate and, in the
case of loss, theft or destruction, of indemnity reasonably satisfactory to the
Company, or, in the case of mutilation, upon surrender and cancellation of the
mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate of like tenor and date representing an equal
number of Warrants.
6. Rights of the Holder. The Warrant Holder shall not,
by virtue hereof, be entitled to any voting or other rights of a stockholder in
the Company, either at law or equity, and the rights of the Warrant Holder are
limited to those expressed in this Warrant Certificate and are not enforceable
against the Company except to the extent set forth herein.
7. Adjustment of Exercise Price and Number of Shares
Deliverable. The Exercise Price and the number of shares of Common Stock
purchasable pursuant to each Warrant shall be subject to adjustment from time to
time as hereinafter set forth in this Section 7:
(a) In case the Company shall (i) declare a
dividend or make a distribution on its outstanding
shares of Common Stock in shares of Common Stock,
(ii) subdivide or reclassify its outstanding shares
of Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record
date for such dividend or distribution or of the
effective date of such subdivision, combination or
reclassification shall be adjusted so that it shall
equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of
which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and
the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such
action. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to
Subsection (a) above, the number of Shares
purchasable upon exercise of each Warrant shall
simultaneously be adjusted by multiplying (x) the
number of Shares issuable upon exercise of a Warrant
03\279\war-ubs.03.wpd
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<PAGE>
immediately prior to the event requiring adjustment
pursuant to Subsection (a) above by (y) the Exercise
Price in effect immediately prior to such event and
dividing the product so obtained by the Exercise
Price, as adjusted.
(c) Notwithstanding the provisions of
Subsections (a) and (b) of this Section 7, no
adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or
decrease of at least five cents ($0.05) in such
price; provided, however, that any adjustments which
by reason of this Subsection (c) are not required to
be made shall be carried forward and taken into
account in any subsequent adjustment required to be
made hereunder. All calculations under this Section 7
shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
Anything in this Section 7 to the contrary
notwithstanding, the Company shall be entitled, but
shall not be required, to make such reductions in the
Exercise Price, in addition to those required by this
Section 7, as it shall determine, in its sole
discretion, to be advisable in order that any
dividend or distribution in shares of Common Stock,
or any subdivision, reclassification or combination
of Common Stock hereafter made by the Company, shall
not result in any Federal income tax liability to the
holders of Common Stock or securities convertible
into Common Stock (including the Warrants).
(d) Whenever the Exercise Price is adjusted
as herein provided, the Company shall promptly, but
in any case within ten (10) days, cause a notice
setting forth the adjusted Exercise Price and
adjusted number of Shares issuable upon exercise of
each Warrant and, if requested by the Warrant Holder,
information describing the transactions giving rise
to such adjustments, to be mailed to the Warrant
Holders at their last addresses appearing in the
books and records of the Company, and shall cause a
certified copy thereof to be mailed to its transfer
agent, if any. In addition, within thirty (30) days
of the end of the Company's fiscal year next
following any such adjustment, the Company shall, at
its expense, deliver to the Warrant Holders a
certificate of a firm of independent certified public
accountants selected by the Board of Directors (who
may be the regular accountants employed by the
Company) to verify the computation required by this
Section 7.
(e) In the event that at any time, as a
result of an adjustment made pursuant to Subsection
(a) above, the Warrant Holder of this Warrant
thereafter shall become entitled to receive any
shares of the Company, other than Common Stock,
thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to
the provisions with respect to the Common Stock
contained in Subsections (a) to (c), inclusive,
above.
03\279\war-ubs.03.wpd
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<PAGE>
(f) Irrespective of any adjustments in the
Exercise Price or the number or kind of securities
purchasable upon exercise of the Warrants, this
Warrant Certificate may continue to evidence the
Warrants as so adjusted.
(g) If at any time after the date of this
Warrant, the Company shall distribute to the holders
of its Common Stock, (i) securities, other than
shares of Common Stock, or (ii) property, other than
cash dividends paid in conformity with past practice,
with respect to Common Stock, then, and in each such
case, the Warrant Holder, upon exercise of this
Warrant, shall be entitled to receive the securities
and property which the Warrant Holder would have
received upon such distribution had it been the
holder of the number of shares of Common Stock which
the Warrant Holder was entitled to purchase pursuant
to the terms of this Warrant as of the date of such
distribution.
8. Fractional Shares. No certificate for fractional Shares
shall be issued upon the exercise of the Warrants. With respect to any fraction
of a Share called for upon any exercise hereof, the Company shall pay to the
Warrant Holder an amount in cash equal to such fraction calculated to the
nearest cent multiplied by the current market value of a Share, determined as
follows:
(a) If the Common Stock is listed on a
national securities exchange or admitted to unlisted
trading privileges on such exchange or listed for
trading on the NASDAQ system, the current market
value of a Share shall be the last reported sale
price per Share of the Common Stock on such exchange
or system on the last business day prior to the date
of exercise of this Warrant or if no such sale is
made on such day, the average of the closing bid and
asked prices per Share for such day on such exchange
or system; or
(b) If the Common Stock is not so listed or
admitted to unlisted trading privileges, the current
market value of a Share shall be the mean of the last
reported bid and asked prices per Share reported by
the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of
this Warrant; or
(c) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and
asked prices are not so reported, the current market
value of a Share shall be an amount, not less than
book value thereof, as at the end of the most recent
fiscal year of the Company ending prior to the date
of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board
of Directors of the Company.
9. Officer's Certificate. Whenever the Exercise Price
shall be adjusted as required by the provisions of Section 7 hereof, the Company
shall forthwith file in the custody of
03\279\war-ubs.03.wpd
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<PAGE>
its Secretary or Assistant Secretary at its principal office and with its stock
transfer agent, if any, an officer's certificate showing the adjusted Exercise
Price as herein provided setting forth in reasonable detail the facts requiring
such adjustment, including a statement of the number of additional shares of
Common Stock, if any, and such other facts as shall be necessary to show the
reason for and the manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times for inspection by
the holder or any holder of a Warrant executed and delivered pursuant to Section
2, and the Company shall, forthwith after each such adjustment, mail a copy by
certified mail of such certificate to the Warrant Holder or any such holder.
10. Notices to Warrant Holders. So long as this Warrant shall
be outstanding, (i) if the Company shall pay any dividend or make any
distribution upon the Common Stock; or (ii) if the Company shall offer to the
holders of Common Stock for subscription or purchase by them any shares of any
class or any other rights; or (iii) if any capital reorganization of the
Company, reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or transfer
of all or substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then, in any such case, the Company shall
cause to be mailed by certified mail to the Warrant Holder, at least fifteen
days prior to the date specified in (x) or (y) below, as the case may be, a
notice containing a brief description of the proposed action and stating the
date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and the date, if any, which is to be fixed, as of which the
holders of Common Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.
11. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
all of substantially all of the property of the Company, the Company shall, as a
condition precedent to such transaction, cause effective provisions to be made
so that the Warrant Holder shall have the right thereafter by exercising this
Warrant at any time prior to the expiration of the Warrant, to purchase the kind
and amount of shares of stock and other securities and property receivable upon
such reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 11 shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
03\279\war-ubs.03.wpd
6
<PAGE>
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Subsection (a) of Section 7 hereof.
12. Voluntary Adjustment by the Company. The Company may, at
its option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount deemed appropriate by the Board of Directors of the
Company and/or extend the date of the expiration of the Warrants.
13. Registration Under the Securities Act of 1933.
---------------------------------------------
The Warrant Holder shall be entitled to the following
registration rights.
(a) Demand Rights. The Company covenants and
agrees with the Warrant Holder that, during the
period commencing on the date hereof and ending on
the Expiration Date, within 45 days after receipt of
a written request from the Warrant Holder, or a
majority of holders if there is more than one holder,
that he desires and intends to transfer all or a
portion of the Warrant Holder's Shares under such
circumstances that a public offering, within the
meaning of the Securities Act of 1933, as amended
(the "Act"), will be involved, the Company shall file
with the Securities and Exchange Commission (the
"Commission") with all deliberate speed a
Registration Statement on Form S-3 (or any successor
thereto), or if not eligible for the use of Form S-3,
any other form, covering all such securities and use
its best efforts to cause such Registration Statement
with respect to such securities to become effective
under the Act. The Company shall not be required to
comply with more than one request for registration
pursuant to this Subsection 13(a). The Company need
not comply with any request for registration pursuant
to this Subsection 13(a) if at such time the Company
would be required to use, in connection with the
filing of the Registration Statement, pursuant to the
requirements of the Act and the rules and regulations
of the commission thereunder, audited financial
statements as of a date other than the end of a
fiscal year of the Company. If the Company includes
Shares to be sold by it in any registration requested
pursuant to this Subsection 13(a), such registration
shall be deemed to have been a registration under
Subsection 13(b).
(b) Piggyback Rights. If at any time after
the date hereof, the Company shall propose to file a
registration statement ("Registration Statement")
under the Act, other than a reorganization or an
offering pursuant to a stock option or other employee
benefit plan or an offering on Form S-4 or S-5 (or
any successor forms thereto) relating to an
acquisition of another corporation, then, during the
period commencing on the date hereof and terminating
on the Expiration Date, and subject to paragraph (3)
of this Subsection 13(b), the Company shall in each
case deliver written
03\279\war-ubs.03.wpd
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<PAGE>
notice thereof to the Holder of this Warrant or of
the Warrant Shares and/or any then holder of Warrants
or Warrant Shares (such persons being collectively
referred to herein as "holders") at least fifteen
days before the anticipated filing date. Such notice
shall offer to each holder the option to include
Warrant Shares in such Registration Statement,
subject to the conditions set forth in this
Subsection 13(b); provided, however, that the Company
shall be under no obligation to register Warrant
Shares of any holder if in the opinion of counsel to
such holder no registration under the Act is required
with respect to a public disposition of such Warrant
Shares.
(1) Should a holder desire to have
any Warrant Shares registered under this Subsection
13(b), such holder shall so advise in writing no
later than fifteen days after the date of receipt by
the holder of the Company's written notice, setting
forth the number of such Warrant Shares for which
registration is requested. Subject to paragraph (3)
of this Subsection 13(b), the Company shall thereupon
include in such Registration Statement such Warrant
Shares.
(2) Neither the giving of notice by
the Company nor any request by any holders to
register Warrant Shares pursuant to this Subsection
13(b) shall in any way obligate the Company to file
any such Registration Statement, and notwithstanding
the filing of such Registration Statement, the
Company may, at any time prior to the effective date
thereof, determine not to offer the securities to
which such registration relates and/or withdraw the
Registration Statement from the Commission, without
liability of the Company to any holders.
(3) If the securities covered by
such Registration Statement are to be sold by
underwriters in an underwritten public offering
(including, without limitation, a so-called "best
efforts" undertaking by an underwriter), the Company
shall use its best efforts to cause the managing
underwriter, if any, of a proposed offering to grant
a request by a holder that Warrant Shares be included
in the proposed offering on terms and conditions
which are customary industry practice for such
underwriter under the existing circumstance, provided
that any Warrant Shares to be sold by holders
pursuant to this Subsection 13(b), shall be sold or
distributed in a manner identical to the manner in
which the securities which are the subject of such
Registration Statement are to be sold or distributed.
Notwithstanding the foregoing, if any such managing
underwriter shall advise the Company in writing that,
in good faith and in its reasonable opinion, the
distribution of Warrant Shares requested to be
included in the Registration Statement concurrently
with the securities being registered by the Company
would adversely affect the distribution of such
securities by such underwriters, the Company shall
give notice of such determination to the holders
requesting registration, and the number of Warrant
Shares proposed to be offered by the holders and any
other persons (other than
03\279\war-ubs.03.wpd
8
<PAGE>
the Company) shall be reduced pro rata (as specified
by the Company in such notice) to aggregate a
quantity of Warrant Shares (so specified) which said
managing underwriter shall not consider excessive.
(4) The rights of holders to have
their Warrant Shares be included in any Registration
Statement pursuant to the provisions of this
Subsection 13(b), shall be subject to the condition
that the holders requesting registration shall
furnish to the Company in writing such information
and documents as may be reasonably required to
properly prepare and file such Registration Statement
in accordance with applicable provisions of the Act.
(5) The Company shall bear the
entire cost and expense of any registration of
securities initiated by it notwithstanding that
Warrant Shares may be included in any such
registration. Any holder whose Warrant Shares are
included in any such registration statement pursuant
to this Subsection 13(b) shall, however, bear the
fees of his own counsel and any registration fees,
transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold by
him pursuant thereto.
(c) Indemnification. (i) The Company shall
indemnify and hold harmless each such holder and each
underwriter, within the meaning of the Act, who may
purchase from or sell for any such holder any Warrant
Shares (each, an "Indemnified Person") from and
against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement or any post-effective
amendment thereto or any registration statement under
the Act or any prospectus included therein required
to be filed or furnished by reason of this Section 13
or caused by any omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such
untrue statement or alleged untrue statement or
omission or alleged omission based upon information
furnished or required to be furnished in writing to
the Company by such holder or underwriter expressly
for use therein, which indemnification shall include
each person, if any, who controls any such
underwriter within the meaning of such Act; provided,
however, that the Company shall not be obliged so to
indemnify any such holder, underwriter or controlling
person unless such holder, underwriter or controlling
person shall at the same time indemnify the Company,
its directors, each officer signing the related
registration statement and each person, if any, who
controls the Company within the meaning of such Act,
from and against any and all losses, claims, damages
and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained
in any registration statement or any prospectus
required to be filed or furnished by reason of this
Section 13 or caused by any omission or alleged
omission to state
03\279\war-ubs.03.wpd
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<PAGE>
therein a material fact required to be stated therein
or necessary to make the statements therein not
misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or
alleged untrue statement or omission or alleged
omission based upon information furnished or required
to be furnished in writing to the Company by any such
holder, underwriter or controlling person expressly
for use therein.
(ii) The holders registering Warrant
Shares pursuant to this Warrant Certificate shall
indemnify and hold harmless the Company, its
directors and officers, and each person, if any, who
controls the Company within the meaning of either
Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), to
the same extent as the indemnity from the Company to
each Indemnified Person set forth in paragraph (i) of
this Subsection (c), but only with respect to
information relating to such Indemnified Person
furnished in writing by such Indemnified Person to
the Company expressly for use in the Registration
Statement or related Prospectus (preliminary or
final), or any amendment or supplement thereto. In
case any action or proceeding shall be brought
against the Company or its directors or officers or
any such controlling person, in respect of which
indemnity may be sought against a holder, each shall
have the rights and duties given to the Company and
the Company or its directors or its officers or its
controlling persons each shall have the rights and
duties given to a holder by this Subsection (c).
(iii) In order to provide for just
and equitable contribution in circumstances in which
the indemnification provided for in this Subsection
13(c) is due in accordance with its terms but is, for
any reason, held by a court to be unavailable, the
Company and the holders shall contribute to the
aggregate losses, claims, damages and liabilities
(including reasonable legal or other expenses
incurred in connection with investigation or
defending of same) to which the Company and the
holders may be subject based on their comparative
fault; provided, however, that no holder shall have
any liability hereunder in excess of the gross
proceeds realized by such holder from the sale by it
of the Warrant Shares to which the third party claim
relates; provided, further, however, that no person
who has committed an intentional misrepresentation
shall be entitled to contribution from any person who
has not committed an intentional misrepresentation.
For the purposes of this paragraph (iii) any person
controlling, controlled by or under common control
with the holders, or any partner, director, officer,
employee, representative or agent of any thereof,
shall have the same rights to contribution as the
holders, and each person who controls the Company
within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each officer and each
director of the Company shall have the same rights to
contribution as the Company. Any party entitled to
contribution shall, promptly after receipt of notice
of commencement of any action, suit or proceeding
against such party in respect of which a claim
03\279\war-ubs.03.wpd
10
<PAGE>
for contribution may be made against the other party
under this paragraph (iii), notify such party from
whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from
which contribution may be sought from any obligation
it or they may have hereunder or otherwise.
The Company's agreements with respect to Warrant Shares in
this Section 13 shall continue in effect regardless of the exercise and
surrender of this Warrant.
14. Governing Law. This Warrant Certificate shall be governed
by and construed in accordance with the laws of the State of New York without
regard to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed by its officers thereunto duly authorized and
its corporate seal to be affixed herein.
DEL GLOBAL TECHNOLOGIES
CORP.
By:/S/Leonard A Trugman
--------------------
Name: Leonard A. Trugman
Title: Chairman, CEO and President
[SEAL]
Dated: December 28, 1999
Attest:
/S/ Dave Engel
- ---------------------------
David Engel, Vice President
03\279\war-ubs.03.wpd
11
<PAGE>
EXERCISE FORM
Dated: ________________, 200_
The undersigned hereby irrevocably elects to exercise the
right to purchase __________ shares of Common Stock covered by this Warrant
according to the conditions hereof and herewith makes payment of the Purchase
Price for such shares in full.
----------------------------------------
Signature [Print Name]
----------------------------------------
(STREET ADDRESS)
----------------------------------------
(CITY) (STATE) (ZIP CODE)
03\279\war-ubs.03.wpd
12
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ______________________________________
hereby sells, assigns and transfer unto
Name ________________________________________________________________
(Please typewrite or print in bold letters)
Address_______________________________________________________________ the right
to purchase Common Stock represented by this Warrant to the extent of __________
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _____________________ Attorney, to transfer the same on
the books of the Company with full power of substitution in the premises.
Date _____________, 200_
Signature __________________________
[PRINT NAME
03\279\war-ubs.03.wpd
13
EXHIBIT 11
DEL GLOBAL TECHNOLOGIES CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
SIX MONTHS ENDED JANUARY 29, 2000
Per Share
Net Income Shares Amount
---------- ------ ---------
Basic Earnings Per Share:
Income available to common
shareholders $3,294,141 7,799,511 $.42
---------- ---------- ====
Effect of Dilutive Securities:
Warrants -- 11,570
Options -- 356,797
---------- ---------- ----
Diluted Earnings Per Share $3,294,141 8,167,878 $.40
========== ========== ====
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027748
<NAME> DEL GLOBAL TECHNOLOGIES CORP.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-29-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-29-2000
<CASH> 244,762
<SECURITIES> 1,290,418
<RECEIVABLES> 16,102,186
<ALLOWANCES> 196,018
<INVENTORY> 37,693,356
<CURRENT-ASSETS> 65,801,389
<PP&E> 24,563,974
<DEPRECIATION> 9,426,463
<TOTAL-ASSETS> 90,094,463
<CURRENT-LIABILITIES> 13,215,589
<BONDS> 0
0
0
<COMMON> 838,385
<OTHER-SE> 68,841,275
<TOTAL-LIABILITY-AND-EQUITY> 90,094,463
<SALES> 33,162,373
<TOTAL-REVENUES> 33,162,373
<CGS> 19,730,199
<TOTAL-COSTS> 19,730,199
<OTHER-EXPENSES> 8,553,806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 145,132
<INCOME-PRETAX> 4,733,236
<INCOME-TAX> 1,439,095
<INCOME-CONTINUING> 3,294,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,294,141
<EPS-BASIC> .42
<EPS-DILUTED> .40
</TABLE>
