<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1996
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
HURCO COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
INDIANA 3541 35-1150732
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION INDUSTRIAL IDENTIFICATION NUMBER)
OF INCORPORATION OR CLASSIFICATION NUMBER)
ORGANIZATION)
ONE TECHNOLOGY WAY
INDIANAPOLIS, INDIANA 46268
(317) 293-5309
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROGER J. WOLF
CHIEF FINANCIAL OFFICER
HURCO COMPANIES, INC.
ONE TECHNOLOGY WAY
INDIANAPOLIS, INDIANA 46268
(317) 293-5309
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF COMMUNICATIONS TO:
DAVID C. WORRELL, ESQ. STEPHEN H. COOPER, ESQ.
BAKER & DANIELS WEIL, GOTSHAL & MANGES LLP
300 NORTH MERIDIAN STREET 767 FIFTH AVENUE
INDIANAPOLIS, INDIANA 46204 NEW YORK, NY 10153
(317) 237-0300 (212) 310-8000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or reinvestment plans, check the following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE(a) FEE
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<S> <C> <C> <C> <C>
Common Stock (no par val-
ue)..................... 1,085,296(b) $4.63 $5,024,921 $1,734
</TABLE>
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(a) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a).
(b) This Registration Statement also covers such indeterminate number of
additional shares as may be required to be issued upon exercise of rights
as a consequence of rounding.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
1,085,296 SHARES
HURCO COMPANIES, INC.
COMMON STOCK
Hurco Companies, Inc. (the "Company") is distributing to holders of record
of its Common Stock, no par value (the "Common Stock"), as of the close of
business on June 5, 1996 (the "Record Date"), non-transferable rights (the
"Rights") to subscribe for and purchase additional shares of Common Stock at a
subscription price (the "Subscription Price") of $4.63 per share (the "Rights
Offering").
Shareholders of record will receive .20 of a Right for each share of Common
Stock held by them as of the Record Date. Each whole Right will entitle the
holder to purchase one share of Common Stock at the Subscription Price (the
"Basic Subscription Privilege"). No fractional Rights or cash in lieu thereof
will be distributed or paid by the Company. The number of Rights distributed
to each holder of Common Stock will be rounded up to the nearest whole number.
As a consequence of such rounding, the total number of shares that may be
issued pursuant to the Rights Offering may be increased by up to 500 shares.
Each Right also carries the right (the "Oversubscription Privilege") to
subscribe at the Subscription Price for shares of Common Stock that are not
otherwise purchased by shareholders through the exercise of Rights. The Rights
will be evidenced by non-transferable subscription certificates. Certificates
representing shares of Common Stock purchased through the exercise of Rights
will be issued as soon as practicable after the related Rights have been
validly exercised. Once a holder has exercised Rights, such exercise may not
be revoked. The Rights will expire at 5:00 p.m., New York City time, on July
3, 1996, unless extended for up to thirty (30) days (the "Expiration Time").
PRIOR TO DECIDING TO EXERCISE RIGHTS, SHAREHOLDERS SHOULD CAREFULLY CONSIDER
THE FACTORS SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 7 HEREOF.
(Continued on following page)
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROCEEDS TO COMPANY(1)(2)
SUBSCRIPTION PRICE MINIMUM(3) MAXIMUM(4)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................... $4.63 $4.63 $4.63
- --------------------------------------------------------------------------------
Total.............................. $5,024,921 $2,800,000 $5,024,921
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Common Stock is being offered and sold directly by the Company, and no
commission or other remuneration will be paid to any person for soliciting
purchases of the Common Stock. See "The Rights Offerings--Information
Agent" for information with respect to certain contingent fees payable by
the Company to Georgeson & Company Inc., the Information Agent for the
Rights Offering.
(2) Before deducting expenses payable by the Company, estimated at $200,000.
(3) Assumes the sale only of the 278,001 shares and 326,751 shares that are
the subject of commitments of the Standby Purchasers. See "The Rights
Offering--Standby Commitments."
(4) Assumes the sale of all of the 1,085,296 shares offered hereby, without
adjustment for rounding.
----------------
The date of this Prospectus is June 6, 1996.
<PAGE>
(Continued from previous page)
The Rights may not be exercised by any person, and neither this Prospectus
nor any Subscription Certificate (as defined herein) shall constitute an offer
to sell or a solicitation of an offer to purchase any shares of Common Stock,
in any jurisdiction in which such transactions would be unlawful. See "The
Rights Offering--Subscription Privileges--State and Foreign Securities Laws."
Brynwood Partners Limited Partnership ("Brynwood I"), the owner of 1,390,001
shares (or approximately 25.6% of the outstanding shares) of Common Stock, has
advised the Company that, due to liquidity limitations, it does not intend to
exercise any of its Rights. In lieu thereof, Brynwood Partners II L.P.
("Brynwood II"), an affiliate of Brynwood I, has agreed to purchase from the
Company and the Company has agreed to sell to Brynwood II, at the Subscription
Price, all of the 278,001 shares of Common Stock that otherwise would have
been available for purchase by Brynwood I pursuant to the exercise of its
Basic Subscription Privilege. In addition, Brynwood II, Hendrik J. Hartong,
Jr. and Richard T. Niner (collectively, the "Standby Purchasers") have agreed
to purchase from the Company, at the Subscription Price, an aggregate of up to
326,751 shares of Common Stock to the extent such shares are not purchased by
shareholders pursuant to the exercise of Rights, including the
Oversubscription Privilege. Messrs. Hartong and Niner, both of whom are
directors of the Company, are the general partners of partnerships that serve,
respectively, as managing general partner of Brynwood I and Brynwood II. See
"The Rights Offering--Standby Commitments."
The Company's Common Stock is traded in the NASDAQ National Market under the
symbol "HURC." On June 5, 1996, the last trading day prior to public
announcement of the Rights Offering, the closing sales price of the Common
Stock on the NASDAQ National Market was $6 5/8 per share. The Subscription
Price represents a discount of 10% from the average closing price of the
Common Stock on the NASDAQ National Market for the thirty (30) trading days
ending June 3, 1996.
----------------
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Rights and the
Common Stock offered hereby. This Prospectus, which is a part of such
Registration Statement, does not contain all of the information set forth in
the Registration Statement and the exhibits thereto. For further information
with respect to the Company, the Rights and the Common Stock, reference is
hereby made to such Registration Statement and the exhibits filed therewith.
The Registration Statement, including the exhibits thereto, may be inspected
without charge at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. The statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference and the exhibits thereto. Copies of each such contract or other
document may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the charges prescribed by the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy and information statements and other
information with the Commission. The Registration Statement, including the
exhibits thereto, as well as such reports, proxy and information statements
and other information filed by the Company with the Commission, may be
inspected, without charge, and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, Room 1024, and at its regional offices at 7 World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such materials may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed on the NASDAQ National Market. Reports, proxy and information
statements and other information concerning the Company may be inspected at
the offices of the NASDAQ National Market, 1735 K Street, Washington, D.C.
20006-1500.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus its Annual
Report on Form 10-K for the fiscal year ended October 31, 1995 and its
Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 1996,
which have been filed with the Commission pursuant to the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Company's Common Stock pursuant
hereto shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein, modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy of
any or all documents incorporated by reference in this Prospectus, without
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Copies of this Prospectus, as amended or
supplemented from time to time, and any other documents (or parts of
documents) that constitute part of the Prospectus under Section 10(a) of the
Securities Act will also be provided without charge to each such person, upon
written or oral request. Requests should be directed to Investor Relations,
Hurco Companies, Inc., One Technology Way, Indianapolis, Indiana 46268,
telephone number (317) 293-5309.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes thereto incorporated by
reference in this Prospectus. Holders of Rights are urged to read this
Prospectus in its entirety prior to making a decision to exercise their Rights.
Certain capitalized terms used herein are defined elsewhere in this Prospectus.
THE COMPANY
The Company designs and produces computer numerical control ("CNC") systems
and software and CNC-guided machine tools for sale through its own distribution
systems to the worldwide machine tool industry. The Company's proprietary CNC
systems and related software products are either integrated with machine tools
marketed by the Company, sold to machine tool end users or sold to other
manufacturers who integrate them with their own products.
THE RIGHTS OFFERING
RIGHTS...................... Each holder of the Company's Common Stock will
receive, at no cost, .20 of a Right for each
share of Common Stock held of record by such
holder as of 5:00 p.m., New York City time, on
June 5, 1996 (the "Record Date"). The number of
Rights distributed to each holder will be rounded
up to the nearest whole number and no fractional
Rights or cash in lieu thereof will be distrib-
uted or paid. An aggregate of 1,085,296 Rights
will be distributed. The Rights will be evidenced
by non-transferable subscription certificates
(the "Subscription Certificates") and will expire
at 5:00 p.m., New York City time, on July 3,
1996, unless extended for up to thirty (30) days
(the "Expiration Time").
BASIC SUBSCRIPTION
PRIVILEGE................... Each whole Right will entitle the holder thereof
to purchase, at the Subscription Price, one share
of Common Stock (the "Basic Subscription Privi-
lege").
OVERSUBSCRIPTION Each holder of Rights who elects to exercise the
PRIVILEGE................... Basic Subscription Privilege in full will also be
entitled to subscribe, subject to proration, for
up to 1,085,296 additional shares of Common Stock
at the Subscription Price (the "Oversubscription
Privilege"). Brynwood I, the holder of 1,390,001
shares, has advised the Company that it does not
intend to exercise any of its Rights. In lieu
thereof, Brynwood II, an affiliate of Brynwood I,
has agreed to purchase from the Company and the
Company has agreed to sell to Brynwood II, at the
Subscription Price, all of the 278,001 shares
that otherwise would have been available for pur-
chase by Brynwood I pursuant to exercise of its
Basic Subscription Privilege. (See "Standby Com-
mitments," below.) If the number of shares of
Common Stock available (the "Excess Shares") af-
ter (i) the sale to Brynwood II of the shares
that otherwise could have been purchased by
Brynwood I and (ii) the satisfaction of all
subscriptions pursuant to exercise of the Basic
Subscription Privilege by shareholders other than
Brynwood I is insufficient to satisfy in full all
elections to exercise the Oversubscription Privi-
lege, the Excess Shares will be allocated
4
<PAGE>
among holders who have exercised their
Oversubscription Privilege, pro rata, in the same
ratio that the number of shares subscribed for by
each such holder pursuant to exercise of the
Oversubscription Privilege bears to the total
number of shares subscribed for by all such hold-
ers pursuant to exercise of the Oversubscription
Privilege.
SUBSCRIPTION PRICE.......... $4.63 in cash per share of Common Stock sub-
scribed.
RECORD DATE................. June 5, 1996.
EXPIRATION TIME............. 5:00 p.m., New York City time, on July 3, 1996,
unless extended for up to thirty (30) days.
TRANSFERABILITY OF RIGHTS... The Rights are non-transferable.
PROCEDURE FOR EXERCISING
RIGHTS...................... Rights may be exercised by the holder by properly
completing and signing the Subscription Certifi-
cate evidencing those Rights and forwarding that
Subscription Certificate (or following the Guar-
anteed Delivery Procedures described herein),
with payment of the Subscription Price for each
share of Common Stock subscribed for pursuant to
the Basic Subscription Privilege and the
Oversubscription Privilege, to State Street Bank
& Trust Company (the "Subscription Agent") on or
prior to the Expiration Time. If the mail is used
to forward Subscription Certificates, it is rec-
ommended that insured, registered mail be used.
No interest will be paid on funds delivered in
payment of the Subscription Price. ONCE A HOLDER
HAS EXERCISED ANY RIGHTS, SUCH EXERCISE MAY NOT
BE REVOKED. See "The Rights Offering--Exercise of
Rights."
PROCEDURE FOR EXERCISING
RIGHTS BY FOREIGN AND
CERTAIN
OTHER SHAREHOLDERS.......... Subscription Certificates will not be mailed to
holders of Common Stock whose addresses are out-
side the United States or who have an APO or FPO
address, but will be held by the Subscription
Agent for their account. To exercise the Rights
represented thereby, such holders must notify the
Subscription Agent on or prior to the Expiration
Time. If no instructions have been received by
that time, such Rights will expire. See "The
Rights Offering--Foreign and Certain Other Share-
holders."
PERSONS HOLDING COMMON
STOCK, OR WISHING TO
EXERCISE RIGHTS, THROUGH
OTHERS...................... Persons holding shares of Common Stock, and re-
ceiving the Rights distributed with respect
thereto, through a broker, dealer, commercial
bank, trust company or other nominee, as well as
persons holding certificates of Common Stock per-
sonally who would prefer to have such institu-
tions effect transactions relating to the Rights
on their behalf, should contact the appropriate
institution or nominee and request it to effect
the transactions for them. See "The Rights Offer-
ing--Exercise of Rights."
ISSUANCE OF COMMON STOCK.... Certificates representing shares of Common Stock
purchased pursuant to the exercise of the Basic
Subscription Privilege will be delivered to sub-
scribers as soon as practicable after the corre-
sponding
5
<PAGE>
Rights have been validly exercised. Certificates
representing Excess Shares purchased pursuant to
exercise of the Oversubscription Privilege will
be delivered to subscribers as soon as practica-
ble after the Expiration Time and after all pro-
rations have been effected. See "The Rights Of-
fering--Subscription Privileges."
SUBSCRIPTION AGENT.......... The Subscription Agent is State Street Bank &
Trust Company, Boston, Massachusetts.
INFORMATION AGENT........... Georgeson & Company Inc. will act as the informa-
tion agent for the Rights Offering (the "Informa-
tion Agent").
STANDBY COMMITMENTS......... In lieu of the exercise of Rights by Brynwood I,
Brynwood II has agreed to purchase from the Com-
pany and the Company has agreed to sell to
Brynwood II, at the Subscription Price, all of
the 278,001 shares that otherwise could have been
purchased by Brynwood I pursuant to the exercise
of its Basic Subscription Privilege. In addition,
Brynwood II and the other Standby Purchasers have
agreed to purchase from the Company, at the Sub-
scription Price, an aggregate of up to 326,751
shares of Common Stock not purchased by share-
holders pursuant to the exercise of Rights, in-
cluding the Oversubscription Privilege. See "The
Rights Offering--Standby Commitments."
USE OF PROCEEDS............. To prepay installments of outstanding indebted-
ness coming due on July 31, 1996 and for general
corporate purposes. See "Use of Proceeds."
RISK FACTORS................ Purchase of the Common Stock involves certain
risks. See "Risk Factors."
6
<PAGE>
RISK FACTORS
The purchase of shares of Common Stock through the exercise of Rights
involves certain risks. Holders of Rights should consider the following risk
factors before making a decision to exercise their Rights and subscribe for
shares.
RECENT LOSSES
Although the Company reported net income in its fiscal year ended October
31, 1995, it reported substantial losses during each of the three preceding
fiscal years. There can be no assurance that the Company will be able to
maintain or increase its profitability.
SIGNIFICANT LEVERAGE AND DEBT SERVICE REQUIREMENTS
The Company is significantly leveraged and will continue to be so after
completion of the Rights Offering. At January 31, 1996, the Company's
outstanding indebtedness for borrowed money aggregated approximately $34.0
million, all of which is secured, and its total debt represented approximately
82% of its total capitalization (including short-term debt). If all of the
1,085,296 shares offered hereby are sold at the Subscription Price of $4.63
per share, that percentage will be 70%.
Approximately $4.5 million of the Company's outstanding indebtedness at
January 31, 1996 is due in fiscal 1996, including approximately $3.1 million
that is due on July 31, 1996. Term loan payments of $3.0 million are due in
fiscal 1997 and annual installments of approximately $1.8 million are due
thereafter through December 2000. Of the remaining indebtedness of $19.5
million, approximately $18.4 million consists of borrowings under the
Company's revolving credit facility, which expires on May 1, 1997 subject to
automatic extension to November 1, 1997 if, at any time prior to May 1997, the
Company's consolidated net worth exceeds $12 million.
Management believes that the proceeds from this Rights Offering, together
with anticipated cash flow from operations, will be sufficient to enable the
Company to meet its anticipated cash requirements, including scheduled debt
amortization payments, through the end of fiscal 1997, even if the proceeds of
this Rights Offering do not exceed the minimum set forth on the cover page of
this Prospectus. In addition, although no assurance can be given, the Company
believes that it will be able to replace or obtain an extension of its
revolving credit facility at or prior to its expiration in 1997. However, if
the proceeds of this Rights Offering do not exceed the minimum set forth on
the cover page of this Prospectus, or cash flow from operations is less than
currently anticipated, the Company may be required to limit planned
investments in new products, equipment and business development opportunities
in order to meet its debt service requirements in fiscal 1997 and in
subsequent years.
INDUSTRY CONDITIONS
The machine tool industry served by the Company is highly competitive and is
sensitive to cyclical economic changes. During the period from 1991 through
1994, markets for machine tools, particularly those in Europe (which accounted
for approximately 37% of the Company's sales in fiscal 1995), were adversely
affected by recessionary conditions and experienced significant declines in
demand and resulting price pressure on suppliers. Although these markets
improved significantly in fiscal 1995 and demand for the Company's products
has continued to be strong, there can be no assurance that market conditions
will continue to be favorable or that changing economic conditions in the
future will not have a material adverse effect upon the Company.
IMPACT OF THE RIGHTS OFFERING ON EXISTING SHAREHOLDERS
The Rights entitle the holders of Common Stock on the Record Date to
purchase shares of Common Stock at a price below the prevailing market price
of the Common Stock prior to the announcement of the Rights Offering. Those
Common Stock holders who exercise their Rights will preserve, and through the
Oversubscription Privilege may increase, their proportionate interests in the
Company. Those Common Stock
7
<PAGE>
holders who do not exercise their Rights will experience a decrease in their
proportionate interests in the Company.
If none of the Company's existing shareholders exercise their Rights and the
Standby Purchasers purchase all of the 604,752 shares they have committed to
purchase, as described under "The Rights Offering--Standby Commitments," the
proportionate interest in the Company held by its current shareholders other
than Brynwood I will be reduced by approximately 7.5%.
OWNERSHIP BY CONTROLLING SHAREHOLDERS
An aggregate of 1,390,001 shares, or approximately 25.6% of the Common Stock
outstanding on the Record Date, is owned by Brynwood I. The general partner of
Brynwood I is an entity controlled by Messrs. Hartong and Niner, both of whom
are directors of the Company. Brynwood II is a limited partnership, of which
the general partner also is an entity controlled by Messrs. Hartong and Niner.
Brynwood I has advised the Company that it does not intend to exercise its
Rights. As more fully described under "The Rights Offering--Standby
Commitments," Brynwood II has agreed to purchase from the Company and the
Company has agreed to sell to Brynwood II, at the Subscription Price, all of
the 278,001 shares that otherwise would have been available for purchase by
Brynwood I pursuant to the exercise of its Basic Subscription Privilege. If
all of the 807,295 remaining shares offered hereby are purchased by the
Company's shareholders pursuant to the exercise of their Rights (including the
Oversubscription Privilege), the percentage of the outstanding shares
controlled by Messrs. Hartong and Niner will remain unchanged. However, as
Standby Purchasers, Brynwood II and Messrs. Hartong and Niner also have agreed
to purchase from the Company, at the Subscription Price, an aggregate of up to
326,751 additional shares to the extent such shares are not purchased by
existing shareholders pursuant to the exercise of their Rights (including the
Oversubscription Privilege). If all of those additional shares are purchased
by the Standby Purchasers, the percentage of the outstanding Common Stock
controlled by Messrs. Hartong and Niner will increase, but in no event will
exceed 33.8%.
CERTAIN ANTITAKEOVER PROVISIONS
The Company's Articles of Incorporation permit the Board of Directors,
without specific shareholder approval, to issue shares of Preferred Stock in
one or more series and to determine the designation of, and the voting and
other rights, preferences, privileges and restrictions applicable to, such
shares. In addition, the Articles of Incorporation and certain provisions of
Indiana law impose higher shareholder approval requirements for certain
business combination transactions. These provisions, as well as provisions of
Indiana law that limit the ability of holders of "control shares" to vote them
in certain instances, may have the effect of inhibiting or discouraging a
merger, tender offer, proxy contest or other transaction involving a change in
control of the Company, even if such actions may be beneficial to the
Company's shareholders generally. See "Description of Capital Stock--Preferred
Stock" and "Description of Capital Stock--Certain Provisions of the Articles
of Incorporation and Indiana Law."
ABSENCE OF DIVIDENDS ON COMMON STOCK
The Company does not currently pay and, for the foreseeable future, does not
expect to pay cash dividends on its Common Stock. In addition, the payment of
cash dividends is restricted by the Company's agreements with its principal
lenders.
MANAGEMENT DISCRETION WITH REGARD TO UNALLOCATED PROCEEDS
Management has allocated $3,100,000 of the net proceeds of the Rights
Offering to prepay installments of the Company's outstanding indebtedness to
its senior lenders. Assuming the sale of all of the 1,085,296 shares offered
hereby, the net proceeds to the Company from the Rights Offering will be
approximately $4,825,000. In such event, the balance of the net proceeds,
$1,725,000 (representing 35.8% of the maximum net proceeds), will be used for
general corporate purposes at the discretion of management. See "Use of
Proceeds."
8
<PAGE>
THE COMPANY
The Company designs and produces CNC systems and software and CNC-guided
machine tools for sale through its own distribution systems to the worldwide
machine tool industry. Its principal products consist of CNC systems and
related software for metal cutting machine tools and metal forming press
brakes, as well as complete CNC-guided milling machines and machining centers
into which the Company's own systems have been fully integrated. The Company's
proprietary CNC systems and related software products are either integrated
with machine tools marketed by the Company, sold to machine tool end users or
sold to other machine tool manufacturers who integrate them with their own
products. The Company also produces and distributes control upgrades,
accessories and replacements parts and provides operator training and support
services to its customers.
The Company pioneered the application of microprocessor technology and
conversational programming software to machine tool controls and, since its
founding in 1968, has been a leader in the introduction of CNC systems that
automate manufacturing processes and improve productivity in certain segments
of the metalworking industry. The Company has concentrated on designing "user
friendly" CNC systems that can be operated by both skilled and unskilled
machine tool operators and yet are capable of instructing a machine tool to
perform complex tasks. The combination of microprocessor technology and
patented interactive, conversational software in the Company's CNC systems
enables operators on the production floor to quickly and easily create a part
program for machining and forming a particular part from a blueprint or
electronic design and immediately begin production of that part.
The Company's products are sold through over 200 independent agents and
distributors in 37 countries throughout North America, Europe and Asia. The
Company also has its own direct sales forces in the United States, England,
France, Germany and Singapore. Approximately 80% of the worldwide demand for
CNC-guided machine tools and CNC systems comes from outside the U.S. and,
accordingly, the Company considers its international presence to be critical
to its operations.
During fiscal 1992, the Company initiated a complete restructuring of its
operations. This restructuring program, which was completed in fiscal 1995,
included the discontinuance of certain lower margin product lines and models,
the redesign of the Company's machine tool lines, the outsourcing of its
manufacturing operations to independent contractors and the rationalization of
its marketing, distribution and customer service activities. Charges
associated with this restructuring program contributed to losses in fiscal
years 1992 and 1993. In fiscal 1995, the Company returned to profitability,
reporting net income of $204,000, as compared to net losses of $5,791,000,
$21,144,000 and $5,789,000 in fiscal 1994, fiscal 1993 and fiscal 1992,
respectively.
USE OF PROCEEDS
The net proceeds to the Company from the Rights Offering, after payment of
related expenses, will range from a minimum of approximately $2,600,000
(assuming that none of the Company's current shareholders exercises Rights and
that the Standby Purchasers purchase all of the 604,752 shares that are the
subject of their commitments) to a maximum of approximately $4,825,000
(assuming the sale of all of the 1,085,296 shares offered hereby). Such
proceeds, together with the Company's existing cash (if and to the extent such
proceeds are less than $3,100,000), will be used to prepay an aggregate of
$3,100,000 of installments of the Company's outstanding indebtedness to its
senior lenders that would otherwise be due on July 31, 1996. Of the amount to
be so prepaid, $1,400,000 consists of bank debt bearing interest at a variable
rate (8.75% per annum at January 31, 1996) and $1,700,000 is due to the
holders of the Company's 11.12% Senior Notes. The balance of the net proceeds,
if any (up to a total of $1,725,000, assuming the maximum proceeds are
realized from the Rights Offering), will be used for general corporate
purposes and, pending such utilization, will be applied to reduce outstanding
revolving credit borrowings.
9
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is traded in the NASDAQ National Market, under
the symbol "HURC". The following table sets forth the high and low sales
prices of the Company's Common Stock as reported by the NASDAQ National Market
for the periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
----------- ------ ------
<S> <C> <C>
1994
First Quarter............................................. $3 3/8 $2
Second Quarter............................................ 3 3/4 2 5/8
Third Quarter............................................. 2 7/8 2 1/4
Fourth Quarter............................................ 4 3/4 2 1/4
1995
First Quarter............................................. 4 1/2 3 3/4
Second Quarter............................................ 4 3/8 2 3/4
Third Quarter............................................. 4 1/4 3 3/8
Fourth Quarter............................................ 7 1/8 3 1/2
1996
First Quarter............................................. 7 1/4 4 1/2
Second Quarter............................................ 4 3/4 3 1/4
Third Quarter (through June 5, 1996)...................... 7 4 1/8
</TABLE>
On June 5, 1996, the last trading day prior to the public announcement of
the Rights Offering, the closing price of the Common Stock on the NASDAQ
National Market was $6 5/8 per share.
The Company did not pay cash dividends during any of the periods indicated
in the foregoing table. It does not expect to pay cash dividends in the
foreseeable future and intends to retain earnings for working capital, capital
expenditures and debt reduction. In addition, the payment of cash dividends is
restricted by the Company's agreements with its principal lenders.
10
<PAGE>
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of the
Company at January 31, 1996 and as adjusted to give effect to the sale of the
minimum and maximum number of shares of Common Stock pursuant to the Rights
Offering, as set forth on the cover page of this Prospectus, and the
application of a portion of the estimated net proceeds therefrom to reduce
outstanding indebtedness:
<TABLE>
<CAPTION>
JANUARY 31, 1996
----------------------------
AS ADJUSTED
------------------
ACTUAL MINIMUM MAXIMUM
-------- -------- --------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Short-term debt:
Current portion of long-term debt.............. $ 6,278 $ 3,178 $ 3,178
======== ======== ========
Long-term debt:
Bank revolving credit facilities............... $ 18,316 $ 18,816 $ 16,591
Bank term loan................................. 3,967 2,567 2,567
11.12% Senior Notes due 1998................... 10,605 8,905 8,905
Economic Development Revenue Bonds, Series
1990.......................................... 1,000 1,000 1,000
Other.......................................... 81 81 81
-------- -------- --------
33,969 31,369 29,144
Less current maturities.......................... (6,278) (3,178) (3,178)
-------- -------- --------
Total long-term debt......................... 27,691 28,191 25,966
-------- -------- --------
Shareholders' equity:
Preferred stock $100 par value (40,000) shares
authorized, none issued)...................... -- -- --
Common stock, no par value, $.10 stated value
(7,500,000 shares authorized, 5,426,482
shares, 6,031,234 shares and 6,511,778 shares
issued and outstanding)....................... 543 603 651
Additional paid-in capital..................... 45,573 48,113 50,290
Accumulated deficit............................ (33,901) (33,901) (33,901)
Foreign currency translation adjustment........ (4,628) (4,628) (4,628)
-------- -------- --------
Total shareholders' equity................... 7,587 10,187 12,412
-------- -------- --------
Total capitalization....................... $ 35,278 $ 38,378 $ 38,378
======== ======== ========
Total short-term debt and capitalization... $ 41,556 $ 41,556 $ 41,556
======== ======== ========
</TABLE>
11
<PAGE>
THE RIGHTS OFFERING
THE RIGHTS
The Company is distributing to holders of record of its outstanding Common
Stock as of the close of business on the Record Date (5:00 p.m., New York City
time, on June 5, 1996), at no cost to such holders, Rights to subscribe for
additional shares of Common Stock at a Subscription Price of $4.63 per share.
Each holder will receive .20 of a Right for each share of Common Stock held by
such holder on the Record Date. The Rights are evidenced by non-transferable
Subscription Certificates, which record holders are receiving with copies of
this Prospectus.
The Rights entitle the holders thereof to purchase shares of Common Stock
from the Company at a Subscription Price of $4.63 per share, which represents
a discount of 10% from the average closing price of the Common Stock on the
NASDAQ National Market for the thirty (30) trading days ending June 3, 1996.
There can be no assurance that the Common Stock will trade at prices above the
Subscription Price. See "Determination of Subscription Price" below.
The Rights will expire at the Expiration Time (5:00 p.m., New York City
time, on July 3, 1996), unless extended for up to thirty (30) days by the
Company at the request of the Standby Purchasers.
No fractional Rights or cash in lieu thereof will be issued or paid. The
number of Rights distributed to each holder will be rounded up to the nearest
whole number. No Subscription Certificate may be divided in such a way as to
permit the holder to receive a greater number of Rights than the number to
which such Subscription Certificate entitles its holder, except that a
depositary, bank, trust company, and securities broker or dealer holding
shares of Common Stock on the Record Date for more than one beneficial owner
may, by providing written representations of The Depository Trust Company (the
"DTC"), exchange its Subscription Certificate to obtain separate Subscription
Certificates for the number of Rights to which each such beneficial owner
would have been entitled had it been a holder of record on the Record Date.
The Company reserves the right to refuse to issue any such Subscription
Certificate if such issuance would be inconsistent with the principle that the
number of Rights to which each beneficial owner is entitled will be rounded up
to the nearest whole Right.
Because the number of Rights distributed to each holder will be rounded up
to the nearest whole number, beneficial owners of Common Stock who are also
the record holders of such shares will receive more Rights under certain
circumstances than beneficial owners of Common Stock who are not the record
holder of their shares and who do not obtain (or cause the record holder to
obtain) a separate Subscription Certificate with respect to the shares
beneficially owned by them, including shares held in an investment advisory or
similar account. To the extent that record holders of Common Stock or
beneficial owners of Common Stock who obtain a separate Subscription
Certificate receive more Rights, they will be able to subscribe for more
Common Stock pursuant to the Basic Subscription Privilege and, in the event
shares of Common Stock subscribed for pursuant to the Oversubscription
Privilege are prorated, they will be able to subscribe for more shares
pursuant to the Oversubscription Privilege.
EXPIRATION TIME
The Rights will expire at 5:00 p.m., New York City time, on July 3, 1996,
unless extended for up to thirty (30) days by the Company at the request of
the Standby Purchasers pursuant to the standby purchase agreement (the
"Expiration Time"), after which all unexercised Rights will be null and void.
The Company will not be obligated to honor any purported exercise of Rights
received by the Subscription Agent after the Expiration Time, regardless of
when the documents relating to such exercise were transmitted, except when
timely transmitted pursuant to the Guaranteed Delivery Procedures described
below. The Company may not extend the Expiration Time unless requested to do
so by, or with the consent of, the Standby Purchasers.
Reference is made to the "Instructions for Completing Subscription
Certificates" accompanying the Subscription Certificate for a description of
how to exercise the Rights.
12
<PAGE>
SUBSCRIPTION PRIVILEGES
Basic Subscription Privilege. The Basic Subscription Privilege will entitle
the holder of each whole Right to purchase one share of Common Stock at the
Subscription Price. Each Rights holder is entitled to subscribe for all or any
portion of the shares of Common Stock that may be acquired through the
exercise of its Basic Subscription Privilege.
Oversubscription Privilege. Subject to proration as described below, the
Oversubscription Privilege will entitle the holder of a Right to subscribe at
the Subscription Price for shares of Common Stock in addition to those
subscribed by such holder through exercise of the Basic Subscription
Privilege. The number of shares that may be so subscribed for by a holder
pursuant to exercise of the Oversubscription Privilege may not exceed
1,085,296 shares (the total number of shares offered pursuant to this
Prospectus). Only those holders that exercise the Basic Subscription Privilege
in full will be entitled to exercise the Oversubscription Privilege.
If the number of Excess Shares available for purchase pursuant to the
Oversubscription Privilege after (i) the sale to Brynwood II of the shares
that otherwise could have been purchased by Brynwood I pursuant to its Basic
Subscription Privilege and (ii) the satisfaction of all subscriptions pursuant
to the exercise of the Basic Subscription Privilege by shareholders other than
Brynwood I is not sufficient to satisfy all subscriptions pursuant to exercise
of the Oversubscription Privilege, the Excess Shares will be allocated pro
rata (subject to the elimination of fractional shares) among those holders who
have exercised the Oversubscription Privilege, in the same ratio that the
number of shares subscribed for by each such holder pursuant to exercise of
the Oversubscription Privilege bears to the total number of shares subscribed
for by all such holders pursuant to exercise of the Oversubscription
Privilege.
If a proration of the Excess Shares results in a Rights holder receiving
fewer shares of Common Stock than the Rights holder subscribed for pursuant to
the Oversubscription Privilege, then the excess funds paid by that Rights
holder as the Subscription Price for shares not issued will be returned by
mail to subscribers as soon as practicable after the Expiration Time, without
interest or deduction.
In order to exercise the Oversubscription Privilege, banks, brokers and
other nominee Rights holders that exercise the Oversubscription Privilege on
behalf of beneficial owners of Rights will be required to certify (a "Nominee
Holder Certification") to the Subscription Agent and the Company the number of
shares held on the Record Date on behalf of each such beneficial owner of
Rights, the number of Rights as to which the Basic Subscription Privilege has
been exercised on behalf of each such beneficial owner, that each such
beneficial owner's Basic Subscription Privilege held in the same capacity has
been exercised in full and the number of shares of Common Stock subscribed for
pursuant to the Oversubscription Privilege by each such beneficial owner, and
to record certain other information received from each such beneficial owner.
DELIVERY OF SHARES
Certificates representing shares of Common Stock purchased pursuant to
exercise of the Basic Subscription Privilege will be delivered to subscribers
as soon as practicable after the related Rights have been validly exercised.
Certificates representing shares of Common Stock purchased pursuant to
exercise of the Oversubscription Privilege will be delivered to subscribers as
soon as practicable after the Expiration Time and after all prorations have
been effected.
EXERCISE OF RIGHTS AND SUBSCRIPTION AGENT
Rights holders may exercise the Basic Subscription Privilege and the
Oversubscription Privilege by properly completing and signing the subscription
form on the Subscription Certificate, including, if required, a signature
guarantee from an Eligible Institution (as defined in "Instructions for
Completing Subscription Certificates" accompanying the Subscription
Certificate), and mailing or delivering the Subscription Certificate to State
Street Bank & Trust Company (the "Subscription Agent"), together with payment
of the aggregate Subscription Price in full (in United States dollars). A
Rights holder may exercise the Oversubscription Privilege to subscribe for
13
<PAGE>
(a) a specified number of shares (subject to the maximum oversubscription
permitted hereby) or (b) the maximum number of shares to which it may be
entitled to oversubscribe.
A Rights holder may exercise Rights in whole or in part, but no Rights may
be exercised for fractional shares. If an exercising Rights holder does not
indicate the number of Rights being exercised, or does not forward full
payment of the aggregate Subscription Price for the number of Rights that the
Rights holder indicates are being exercised, then the Rights holder will be
deemed to have exercised the Basic Subscription Privilege with respect to the
maximum number of Rights that may be exercised for the aggregate Subscription
Price payment delivered by the Rights holder, and to the extent that the
aggregate Subscription Price payment delivered by the Rights holder exceeds
the product of the Subscription Price multiplied by the number of Rights
evidenced by the Subscription Certificate delivered by the Rights holder (such
excess being the "Subscription Excess"), the Rights holder will be deemed to
have exercised the Oversubscription Privilege to purchase, to the extent
available and subject to proration as described under "Subscription
Privileges--Oversubscription Privilege," that number of whole Excess Shares
equal to the quotient obtained by dividing the Subscription Excess by the
Subscription Price. Any amount remaining after application of the foregoing
procedures shall be returned to the Rights holder as soon as practicable by
mail, without interest or deduction.
Completed Subscription Certificates and payment of the Subscription Price
should be mailed or delivered by hand or overnight courier by such Rights
holders to:
If by Mail: If by Overnight Courier:
State Street Bank & Trust Company State Street Bank & Trust Company
Corporate Reorganization Corporate Reorganization
P.O. Box 9061 2 Heritage Drive
Boston, MA 02205-8686 North Quincy, MA 02171
If by Hand, either:
Bank of Boston State Street Bank & Trust Company
c/o Boston Equiserve c/o Boston Equiserve
Corporate Reorganization Corporate Reorganization
55 Broadway--3rd Floor 225 Franklin Street--Concourse Level
New York, NY 10006 Boston, MA 02101
The Subscription Agent's telephone number is (800) 426-5523.
Payment of the Subscription Price may be made by wire transfer, check, bank
draft or money order payable to the order of State Street Bank & Trust
Company, as Subscription Agent, for all subscribed for shares of Common Stock.
Wire transfers should be sent to: ABA No.: 0110-0002-8, DDA No.: 7608-355-9,
Attention: BFDS CST REOG/HRCCM. Rights holders are urged to call the
Subscription Agent to confirm receipt of wire transfers.
The Subscription Price will be considered to have been paid only upon
clearance of the wire transfer, check, bank draft or money order tendered
therefor. All funds received by the Subscription Agent from the exercise of
the Rights will be deposited upon receipt.
Pending issuance of certificates representing shares of Common Stock, funds
received for the exercise of Rights and, if applicable, the Oversubscription
Privilege, will be held in a segregated escrow account. If a Rights holder
exercising the Oversubscription Privilege is allocated less than all of the
shares of Common Stock for which that Rights holder subscribed pursuant to the
Oversubscription Privilege, then the excess funds held in escrow paid by such
Rights holder will be returned by mail, without interest or deduction, as soon
as practicable after the Expiration Time and after all prorations and
adjustments contemplated by the Rights Offering have been effected.
If a Rights holder wishes to exercise Rights, but time will not permit such
holder to cause the Subscription Certificate or Subscription Certificates
evidencing such Rights to reach the Subscription Agent on or prior to the
14
<PAGE>
Expiration Time, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:
(i) such holder has caused payment in full of the Subscription Price for
each share of Common Stock being subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege to be received
(in the manner set forth above) by the Subscription Agent on or prior to
the Expiration Time;
(ii) the Subscription Agent receives, on or prior to the Expiration Time,
a guarantee notice (a "Notice of Guaranteed Delivery"), substantially in
the form provided with the Instructions for Completing Subscription
Certificates distributed with the Subscription Certificates, from a member
firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc., or from a commercial bank
or trust company having an office or correspondent in the United States
(each, an "Eligible Institution"), stating the name of the exercising
Rights holder, the number of Rights represented by the Subscription
Certificate or Subscription Certificates held by such exercising Rights
holder, the number of shares of Common Stock being subscribed for pursuant
to the Basic Subscription Privilege and the number of shares of Common
Stock, if any, being subscribed for pursuant to the Oversubscription
Privilege, and guaranteeing the delivery to the Subscription Agent of any
Subscription Certificate evidencing such Rights within five business days
following the date of the Notice of Guaranteed Delivery; and
(iii) the properly completed Subscription Certificate evidencing the
Rights being exercised, with any required signatures guaranteed, is
received by the Subscription Agent within five business days following the
date of the Notice of Guaranteed Delivery relating thereto. The Notice of
Guaranteed Delivery may be delivered to the Subscription Agent in the same
manner as Subscription Certificates at the addresses set forth above, or
may be transmitted to the Subscription Agent by telegram or facsimile
transmission (telecopy no. (617) 774-4519). Additional copies of the form
of Notice of Guaranteed Delivery are available upon request from the
Information Agent, whose address and telephone number are set forth under
"Information Agent," below.
ONCE A RIGHTS HOLDER HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE OR THE
OVERSUBSCRIPTION PRIVILEGE, THE EXERCISE MAY NOT BE REVOKED.
THE INSTRUCTIONS ACCOMPANYING THE SUBSCRIPTION CERTIFICATE SHOULD BE READ
CAREFULLY AND FOLLOWED IN DETAIL. SUBSCRIPTION CERTIFICATES SHOULD BE SENT
WITH PAYMENT TO THE SUBSCRIPTION AGENT. DO NOT SEND SUBSCRIPTION CERTIFICATES
TO THE COMPANY.
Any questions or requests for assistance concerning the method of exercising
Rights or requests for additional copies of this Prospectus, Instructions for
Completing Subscription Certificates, the Notice of Guaranteed Delivery or
other documents in connection with the Rights Offering should be directed to
the Information Agent, Georgeson & Company Inc. at its address set forth under
"Information Agent" (telephone number (800) 223-2064).
15
<PAGE>
INFORMATION AGENT
The Company has appointed Georgeson & Company Inc. as Information Agent for
the Rights Offering. Any questions or requests for assistance concerning the
method of exercising Rights or additional copies of this Prospectus,
Instructions for Completing Subscription Certificates, the Notice of
Guaranteed Delivery or other documents in connection with the Rights Offering
may be directed to the Information Agent at the telephone number and address
below. The Information Agent will neither supply Subscription Certificates nor
will it be able to accept completed Subscription Certificates on behalf of the
Company. RIGHTS HOLDERS SHOULD NOT FORWARD THEIR COMPLETED SUBSCRIPTION
CERTIFICATES TO THE INFORMATION AGENT. EXERCISE OF THE RIGHTS MAY BE MADE ONLY
BY DELIVERY OF THE SUBSCRIPTION CERTIFICATES TO THE SUBSCRIPTION AGENT IN THE
MANNER SET FORTH ABOVE.
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Call Toll Free: (800) 223-2064
The Company will pay the fees and expenses of the Information Agent and has
also agreed to indemnify the Information Agent from certain liabilities which
it may incur in connection with the Rights Offering.
RISK OF DELIVERY AND PAYMENT; DELIVERY BY MAIL
The risk of method of delivery of all documents and payment is on
subscribers, not on the Company. If the mail is used, it is recommended that
insured, registered mail be used and that a sufficient number of days be
allowed to ensure delivery to the Subscription Agent before the Expiration
Time. Because uncertified personal checks may take at least five business days
to clear, Rights holders are strongly urged to pay, or arrange for payment, by
means of certified or cashier's check, bank draft, money order or wire
transfer of funds.
TRANSFER OF RIGHTS
Rights may be not be transferred.
NOMINEE HOLDERS
On the Record Date, holders of Common Stock who hold shares of Common Stock
for the account of others, such as brokers, trustees or depositories for
securities (a "Nominee Record Date Holder"), should contact the respective
beneficial owners of such shares as soon as possible to ascertain those
beneficial owners' intentions and to obtain instructions and certain
beneficial owner certifications with respect to their Rights, all as included
in the Instructions distributed by Nominee Record Date Holders to beneficial
owners. If a beneficial owner so instructs, the Nominee Record Date Holder
should complete the appropriate subscription form on the Subscription
Certificate and, in the case of an exercise of the Oversubscription Privilege,
the related Nominee Holder Certification and submit them to the Subscription
Agent with the proper payment. In addition, beneficial owners of Common Stock
or Rights held through such Nominee Record Date Holder should contact the
Nominee Record Date Holder and request the Nominee Record Date Holder to
effect transactions in accordance with the beneficial owner's instructions.
PROCEDURES FOR DTC PARTICIPANTS
Exercise of the Basic Subscription Privilege and the Oversubscription
Privilege may be effected through the facilities of the DTC. Rights exercised
as part of the Basic Subscription Privilege through DTC are referred to as
"DTC Exercised Rights." A holder of DTC Exercised Rights may also exercise the
Oversubscription Privilege in respect thereof by properly executing and
delivering to the Subscription Agent, on or prior to the Expiration Time, a
DTC Participant Oversubscription Exercise Form and a Nominee Holder
Certification, together with payment of the appropriate Subscription Price for
the number of shares of Common Stock for which the Oversubscription Privilege
is to be exercised. Copies of the DTC Participant Oversubscription Exercise
Form and the Nominee Holder Certification may be obtained from the Information
Agent.
16
<PAGE>
INTERPRETATION
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any subscription or request for division will be
determined by the Company, in its sole discretion, which determination shall
be final and binding. The Company reserves the absolute right to reject any
subscription or request for division if it is not in proper form or if the
acceptance thereof or the issuance of Common Stock or Rights pursuant thereto
could be deemed unlawful. The Company also reserves the right to waive any
defect with regard to any particular subscription or request for division. The
Company shall not be under any duty to give notification of any defects or
irregularities in subscriptions or requests for division, nor shall it incur
any liability for failure to give such notification. Subscriptions will not be
deemed to have been made nor requests for division received until any such
defects or irregularities have been cured or waived within such time period as
the Company shall determine. Subscriptions or requests for division with
defects or irregularities that have not been cured or waived will be returned
by the Company to the appropriate Rights holder as soon as practicable.
DETERMINATION OF SUBSCRIPTION PRICE
The Subscription Price was determined by the Company following negotiations
with the Standby Purchasers. The Subscription Price represents a discount of
10% from the average closing price of the Common Stock on the NASDAQ National
Market for the thirty (30) trading days ending June 3, 1996. The discount is
intended to provide an inducement to shareholders to exercise their rights as
well as an inducement to the Standby Purchasers to enter into the standby
purchase agreement with the Company. In approving the Subscription Price, the
Company's Board of Directors also considered the historical trading prices of
the Common Stock as quoted on the NASDAQ National Market and, among other
things, such factors as the history of and prospects for the Company, its past
operating losses, its prospects for future earnings and the present state of
the Company's development.
There can be no assurance that the market price for the Common Stock during
the Rights Offering will be equal to or above the Subscription Price, or that,
following the issuance of the Rights and of the shares of Common Stock
subscribed by holders of Rights or purchased by the Standby Purchasers, a
subscribing Rights holder will be able to sell shares purchased in the Rights
Offering at a price equal to or greater than the Subscription Price.
STATE AND FOREIGN SECURITIES LAWS
The Rights may not be exercised by any person, and neither this Prospectus
nor any Subscription Certificate shall constitute an offer to sell or a
solicitation of an offer to purchase any shares of Common Stock, in any
jurisdiction in which such transactions would be unlawful. The Company
believes that any action required of the Company has been taken in all
jurisdictions of the United States to permit exercises of the Rights and
purchases of the Common Stock by the Rights holders. No action has been taken
in any jurisdiction outside the United States to permit offers and sales of
the Rights or the Common Stock. Consequently, the Company may reject
subscriptions pursuant to the exercise of Rights by any Rights holder outside
the United States, and the Company may also reject subscriptions from Rights
holders in jurisdictions within the United States if it should later determine
that it may not lawfully issue shares to such Rights holders, even if it could
do so by qualifying the shares for sale or by taking other actions in such
jurisdictions.
ANTITAKEOVER EFFECT OF RIGHTS OFFERING
The Rights Offering has no antitakeover purpose and the Company does not
believe that the Rights Offering has any antitakeover effect.
17
<PAGE>
STANDBY COMMITMENTS
The Company has entered into a standby purchase agreement with Brynwood II,
Hendrik J. Hartong and Richard T. Niner (the "Standby Purchasers") pursuant to
which (a) Brynwood II has agreed to purchase from the Company, and the Company
has agreed to sell to Brynwood II, at the Subscription Price, all of the
278,001 shares of Common Stock that otherwise would have been available for
purchase by Brynwood I pursuant to its Basic Subscription Privilege and (ii)
the Standby Purchasers have agreed to purchase from the Company, and the
Company has agreed to sell to the Standby Purchasers, at the Subscription
Price, an aggregate of up to 326,751 shares of Common Stock to the extent such
shares are not purchased by shareholders pursuant to the exercise of Rights,
including the Oversubscription Privilege. None of the Standby Purchasers has
received a fee or commission from the Company for entering into the standby
purchase agreement, nor will they receive a fee or commission upon the
purchase of shares pursuant to such agreement. The sale of shares to the
Standby Purchasers will be consummated promptly following the Expiration Time.
Pursuant to the standby purchase agreement, the Company has agreed that if,
in connection with a proposed offer for sale, sale or other disposition by the
Standby Purchasers of shares of Common Stock purchased by them pursuant to the
standby purchase agreement, delivery of a prospectus would be required under
the Securities Act, then, upon the written request of such Standby Purchasers
on not more than two occasions, the Company will take such action, including,
if necessary, the filing of a registration statement under the Securities Act,
as may be necessary and appropriate to make available a prospectus that will
permit such Standby Purchasers to effectuate the disposition of such shares.
In addition, the Company has granted to the Standby Purchasers certain "piggy-
back" registration rights to include such Common Stock, subject to certain
limitations, in any other registration statement filed by the Company for its
own account or the account of any of its security holders (including any of
the Standby Purchasers). The costs associated with the Company's obligations
in connection with the provision of a prospectus to the Standby Purchasers,
including, if necessary, the inclusion of their shares in a registration
statement under the Securities Act, will be borne by the Company. Any
underwriting commissions relating to the sale of such shares by the Standby
Purchasers will be borne by the Standby Purchasers.
Messrs. Hartong and Niner, both of whom are directors of the Company, are
the general partners of partnerships that serve, respectively, as managing
general partner of Brynwood I and Brynwood II.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 7,500,000 shares of
Common Stock, of which 5,426,482 shares were outstanding as of June 5, 1996,
and 40,000 shares of Preferred Stock, par value $100 per share (the "Preferred
Stock"), of which none were outstanding as of such date. All outstanding
shares of Common Stock are duly authorized, validly issued, fully paid and
non-assessable. The following summary description of the capital stock of the
Company is qualified in its entirety by reference to the Amended and Restated
Articles of Incorporation of the Company, a copy of which is filed as an
exhibit to the Registration Statement.
COMMON STOCK
The holders of shares of Common Stock are entitled to one vote per share on
all matters to be voted on by shareholders. The holders of shares of Common
Stock are not entitled to cumulate their votes in the election of directors,
which means that holders of a majority of the outstanding shares of Common
Stock can elect all the directors of the Company. The holders of shares of
Common Stock are entitled to receive such dividends as may be declared from
time to time by the Board of Directors, in its discretion, from any assets
legally available therefor.
The holders of Common Stock are not entitled to preemptive, subscription or
conversion rights, and there are no redemption or sinking fund provisions
applicable to Common Stock. The holders of Common Stock are not subject to
further calls or assessments by the Company. Upon liquidation of the Company,
after payment or
18
<PAGE>
provision for payment of all of the Company's obligations and any liquidation
preference of any outstanding Preferred Stock, the holders of the Company's
Common Stock are entitled to share ratably in the remaining assets of the
Company.
PREFERRED STOCK
The Company currently has no shares of Preferred Stock outstanding. The
Company's Board of Directors, without further approval of the shareholders, is
vested with broad authority with respect to the Preferred Stock to establish
and designate series, fix the number of shares to be included in each series,
provide for a sinking fund for the purchase or redemption of shares or a
purchase fund for the purchase of shares of such series, and to determine the
relative rights, preferences and limitations of each series, including but not
limited to the dividend and voting rights of such Preferred Stock and any
preferential amounts payable to the holders of Preferred Stock on liquidation.
The Board of Directors will also determine whether such Preferred Stock will
be convertible into other securities of the Company, including Common Stock.
Accordingly, the issuance of Preferred Stock, while promoting flexibility in
connection with possible acquisitions and other corporate purposes, could
adversely affect the voting rights of the holders of, or the market price of,
Common Stock and, under certain circumstances, make it more difficult for a
third party to gain control of the Company. The holders of Preferred Stock
also have the right to vote separately as a class on any proposal involving
fundamental changes in the rights of holders of Preferred Stock pursuant to
the Indiana Business Corporation Law (the "IBCL").
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND INDIANA LAW
Under the IBCL, directors are required to discharge their duties (i) in good
faith; (ii) with the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and (iii) in a manner the
directors reasonably believe to be in the best interests of the Company.
However, the IBCL exonerates directors from liability for breach of these
standards of conduct unless the breach constitutes willful misconduct or
recklessness. This exoneration from liability may not affect the availability
of equitable relief, including injunctions. Furthermore, the exoneration from
liability under Indiana law does not affect the liability of directors for
violations of the federal securities laws.
Section 4 of Article VIII of the Company's Amended and Restated Articles of
Incorporation ("Section 4") provides for higher shareholder approval
requirements for certain transactions (such as business combinations) with or
otherwise involving another corporation or entity that beneficially owns,
directly or indirectly, more than 5% of the Common Stock (a "Related
Corporation"). Instead of a majority vote requirement (or the absence of any
required shareholder vote), transactions subject to Section 4 require the
affirmative vote of the holders of not less than three-fourths (3/4) of the
outstanding shares of Common Stock. Transactions subject to Section 4 include
mergers with a Related Corporation, the sale or exchange of substantially all
of the assets of the Company to a Related Corporation and the issuance of
Company securities in exchange or payment for properties or assets of a
Related Corporation. However, a transaction that is approved by two-thirds of
the directors of the Company or by a majority of the directors of the Company
prior to the acquisition of more than 5% of the Common Stock of the Company is
not subject to Section 4 and the requirements of Indiana law otherwise
applicable would govern shareholder approval. Section 4 may not be altered,
amended or repealed except by the affirmative vote of the holders of three-
fourths (3/4) of the outstanding Common Stock.
Under Sections 23-1-42-1 to 23-1-42-11 of the IBCL (the "Control Share
Provisions"), any person or group of persons that acquires the power to vote
one-fifth or more of the shares of an "issuing public corporation" shall not
have the right to vote such shares unless granted voting rights by the holders
of a majority of the outstanding shares of the corporation and by the holders
of a majority of the outstanding shares excluding "interested shares."
Interested shares are those shares held by the acquiring person, officers of
the corporation and employees of the corporation who are also directors of the
corporation. If the approval of voting power for the shares is obtained,
additional shareholder approvals are required when a shareholder acquires the
power to vote one-third or more and a majority or more of the voting power of
the corporation's shares. In the absence of such approval, the additional
shares acquired by the shareholder may not be voted. If the shareholders grant
19
<PAGE>
voting rights to the shares after a shareholder has acquired a majority or
more of the voting power, all shareholders of the corporation are entitled to
exercise statutory dissenters' rights and to demand the value of the shares in
cash from the corporation. If voting rights are not accorded to the shares,
the corporation may have the right to redeem them. The Control Share
Provisions do not apply to acquisitions of voting power pursuant to a merger
or share exchange agreement to which the corporation is a party. An "issuing
public corporation" means an Indiana corporation which has 100 or more
shareholders, its principal place of business, its principal office or
substantial assets within Indiana and either (i) more than 10% of its
shareholders are Indiana residents, (ii) more than 10% of its shares are owned
by Indiana residents or (iii) 10,000 of its shareholders reside in Indiana. A
corporation can elect to not be subject to the Control Share Provisions by
adopting a By-law provision to that effect. Such By-law provision may be
amended by the Board of Directors without a shareholder vote.
Sections 23-1-43-1 to 23-1-43-23 of the IBCL (the "Business Combination
Provisions") prohibit a person who acquires beneficial ownership of 10% or
more of the shares of an Indiana corporation that has 100 or more shareholders
(an "interested shareholder"), or any affiliate or associate of an interested
shareholder, from effecting a merger or other business combination with the
corporation for a period of five years from the date on which the person
became an interested shareholder, unless the transaction in which the person
became an interested shareholder was approved in advance by the corporation's
Board of Directors. Following the five-year period, a merger or other business
combination may be effected with an interested shareholder only if (i) the
business combination is approved by the corporation's shareholders excluding
the interested shareholder and any of its affiliates or associates, or (ii)
the consideration to be received by shareholders in the business combination
is at least equal to the highest price paid by the interested shareholder in
acquiring its interest in the corporation, with certain adjustments, and
certain other requirements are met. The Business Combination Provisions
broadly define the term "business combination" to include mergers, sales or
leases of assets, transfers of shares of the corporation, proposals for
liquidation and the receipt by an interested shareholder of any financial
assistance or tax advantage from the corporation, except proportionately as a
shareholder of the corporation.
The overall effect of the above provisions may be to render more difficult
or to discourage a merger, a tender offer, a proxy contest, or the assumption
of control of the Company by a holder of a large block of the Company's stock
or other person, or the removal of incumbent management, even if such actions
may be beneficial to the Company's shareholders generally.
LISTING
The Common Stock is traded in the NASDAQ National Market under the symbol
"HURC."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is State Street Bank &
Trust Company. Its address for such purposes is P.O. Box 8200, Boston,
Massachusetts 02266.
FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a summary of the material federal income tax consequences
to holders of Common Stock in respect of the receipt of Rights under the
Rights Offering, the exercise or expiration of such Rights and the sale of
Common Stock acquired through the exercise of such Rights and represents the
opinion of Weil, Gotshal & Manges LLP, New York, New York, special counsel to
the Company. The summary deals only with Rights, and shares of Common Stock
received through the exercise thereof, which are held as capital assets within
the meaning of section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code").
The summary is based on the Code, Treasury regulations, administrative
pronouncements and judicial decisions now in effect, all of which are subject
to change (possibly on a retroactive basis). The summary does not consider any
foreign, state or local tax consequences, nor does it address estate or gift
tax considerations. Furthermore, the summary does not address all aspects of
federal income taxation that may be relevant to
20
<PAGE>
investors in light of their particular circumstances or to certain types of
investors subject to special treatment under the federal income tax laws (such
as foreign shareholders, dealers in securities or currencies, tax-exempt
organizations, regulated investment companies, life insurance companies,
banks, other financial institutions, pass-through entities and persons holding
Rights or Common Stock as part of a "straddle," "hedge" or "conversion
transaction").
ISSUANCE OF RIGHTS
A holder of Common Stock will not recognize taxable income as a result of
the Company's distribution of Rights to such holder.
BASIS OF RIGHTS
Except as provided in the following sentence, the basis of Rights received
as a distribution with respect to a holder's Common Stock will be zero. If
either (i) the fair market value of the Rights on their date of issuance is
15% or more of the fair market value on such date of the Common Stock with
respect to which they are received or (ii) the holder of Common Stock elects,
in his or her federal income tax return for the taxable year in which Rights
are received, to allocate part of the basis of such Common Stock to the
Rights, then, upon the exercise of those Rights, the holder's basis in such
Common Stock will be allocated between the Common Stock and the Rights in
proportion to the fair market values of each on the date of issuance of the
Rights.
EXPIRATION OF RIGHTS
A holder of Rights who fails to exercise such rights prior to the Expiration
Time in accordance with the terms of the Rights Offering will not recognize
any gain or loss as a result thereof and no adjustment will be made to the tax
basis of the Common Stock, if any, then owned by such holder.
EXERCISE OF RIGHTS
A holder of Rights will not recognize any gain or loss upon the exercise of
such Rights. Under current law, the holder's tax basis in the Common Stock
acquired through the exercise of Rights will be equal to the sum of the
Subscription Price therefor and the tax basis of the Rights exercised (as
determined above), if any. The holding period of the Common Stock acquired
through the exercise of Rights will begin on the date such Rights are
exercised.
SALE OF COMMON STOCK
Upon a sale of Common Stock acquired through the exercise of Rights, the
selling shareholder will recognize gain or loss equal to the difference
between the amount realized by the shareholder on the sale and the
shareholder's tax basis in such Common Stock. Any such gain or loss will be
capital gain or loss, and will be long term capital gain or loss if the Common
Stock has been held for more than one year.
PROPOSED LEGISLATION
The Clinton Administration recently proposed the mandatory use of the
average-cost method in determining the basis of substantially identical
securities. If enacted, a selling shareholder would be required both to
average the tax basis of all of his or her shares of Common Stock, with the
result that each share of Common Stock sold, whether or not acquired through
the exercise of Rights, would have an identical tax basis with each of the
shares retained, and to determine his or her holding period for the shares of
Common Stock sold on a first-in, first-out basis. There can be no way of
predicting whether or not such proposal will be enacted.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS
TO DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
RIGHTS OFFERING IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
21
<PAGE>
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Baker & Daniels, Indianapolis, Indiana. Certain tax
matters will be passed upon for the Company by Weil, Gotshal & Manges LLP, New
York, New York.
EXPERTS
The consolidated financial statements and schedule of the Company and its
subsidiaries at October 31, 1995 and 1994, and for the years then ended,
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving said report. The consolidated financial statements and
schedule of the Company and its subsidiaries for the year ended October 31,
1993, incorporated by reference in this Prospectus and elsewhere in the
Registration Statement, have been audited by Coopers & Lybrand L.L.P.,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon such
report, given upon the authority of such firm as experts in accounting and
auditing.
22
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED ON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
RIGHTS OR THE COMMON STOCK TO WHICH IT RELATES, OR AN OFFER IN ANY JURISDIC-
TION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH JURIS-
DICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
----------------
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Incorporation of Certain Documents by Reference............................ 3
Prospectus Summary......................................................... 4
Risk Factors............................................................... 7
The Company................................................................ 9
Use of Proceeds............................................................ 9
Price Range of Common Stock and Dividends.................................. 10
Capitalization............................................................. 11
The Rights Offering........................................................ 12
Description of Capital Stock............................................... 18
Federal Income Tax Consequences............................................ 20
Legal Matters.............................................................. 22
Experts.................................................................... 22
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1,085,296 SHARES
HURCO COMPANIES, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
JUNE 6, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses payable by
the Company in connection with the Rights Offering.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.......... $ 1,734.00
Blue Sky Fees and Expenses................................... 700.00
Legal Fees and Expenses...................................... 100,000.00
Accounting Fees and Expenses................................. 13,000.00
Subscription Agent's and Information Agent's Fees............ 15,000.00
Printing Expenses............................................ 50,000.00
Listing Fees................................................. 17,500.00
Miscellaneous................................................ 2,063.00
-----------
Total...................................................... $200,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VI, Section 3 of the Company's By-Laws states that the Company will,
to the full extent permitted by the Indiana Business Corporation Law, as
amended, indemnify any person who is made a party to or who is involved in any
proceeding, by reason of the fact that he is or was a director, officer,
employee or agent of the Company, against certain liabilities incurred by him
or her in connection with such proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. The Company has entered into
employment agreements with certain executive officers, which also provide
indemnification against certain liabilities.
Sections 23-1-37-1 to 23-1-37-15 of the Indiana Business Corporation Law
authorize a corporation to indemnify its directors and officers in terms
sufficiently broad to permit such indemnification (including reimbursement of
expenses incurred) under certain circumstances for liabilities arising under
the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1 Standby Purchase Agreement dated as of June 6, 1996, by and among the
Company and the Standby Purchasers.
4.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended October 31, 1989).
4.2 Amended and Restated By-Laws of the Company (incorporated by reference
to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended January 31, 1996).
5 Opinion of Baker & Daniels with respect to legality of the securities.
8 Opinion of Weil, Gotshal & Manges LLP with respect to certain federal
income tax matters.
23.1 Consent of Baker & Daniels (included in Exhibit 5).
23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 8).
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on signature page).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
99.1 Form of Subscription Certificate.
99.2 Instructions for Completing Subscription Certificates.
99.3 Notice of Guaranteed Delivery.
99.4 Subscription Agency Agreement dated as of June 6, 1996, between the
Company and the Subscription Agent.
99.5 Letter to Holders of Common Stock.
99.6 Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99.7 Letter to Clients from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.8 DTC Participant Oversubscription Exercise Form.
99.9 Nominee Holder Certification.
99.10 Special Notice to Holders of Common Stock Whose Addresses are Outside
the United States.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) to reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the Securities offered therein, and
the offering of such Securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered hereby which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
(c) The undersigned registrant hereby undertakes to supplement the
Prospectus, after the Expiration Time, to set forth the results of the Rights
Offering and the amount of unsubscribed securities purchased by the Standby
Purchasers.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, Indiana, on the 6th day of June,
1996.
Hurco Companies, Inc.
/s/ Roger J. Wolf
By: _________________________________
ROGER J. WOLF SENIOR VICE-
PRESIDENT, SECRETARY, TREASURER
AND CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
POWER OF ATTORNEY
Each of the undersigned hereby appoints Brian D. McLaughlin and Roger J.
Wolf and each of them (with full power to act alone), as attorneys and agents
for the undersigned, with full power of substitution, for and in the name,
place and stead of the undersigned, to sign and file with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, any and all
amendments and exhibits to this Registration Statement and any and all
applications, instruments and other documents in connection therewith
pertaining to the registration of the securities registered hereby, with full
power and authority to do and perform any and all acts and things whatsoever
requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Brian D. McLaughlin President and Chief June 6, 1996
- ------------------------------------- Executive Officer
BRIAN D. MCLAUGHLIN of Hurco Companies,
Inc. (Principal
Executive Officer)
/s/ Roger J. Wolf Senior Vice- June 6, 1996
- ------------------------------------- President,
ROGER J. WOLF Secretary,
Treasurer and Chief
Financial Officer
(Principal
Financial and
Accounting Officer)
/s/ Hendrik J. Hartong, Jr. Director June 6, 1996
- -------------------------------------
HENDRIK J. HARTONG, JR.
II-4
<PAGE>
SIGNATURE TITLE DATE
/s/ Andrew L. Lewis IV Director June 6, 1996
- -------------------------------------
ANDREW L. LEWIS IV
/s/ E. Keith Moore Director June 6, 1996
- -------------------------------------
E. KEITH MOORE
/s/ Richard T. Niner Director June 6, 1996
- -------------------------------------
RICHARD T. NINER
/s/ O. Curtis Noel Director June 6, 1996
- -------------------------------------
O. CURTIS NOEL
/s/ Charles E.M. Rentschler Director June 6, 1996
- -------------------------------------
CHARLES E.M. RENTSCHLER
II-5
<PAGE>
EXHIBIT 1
STANDBY PURCHASE AGREEMENT
STANDBY PURCHASE AGREEMENT (this "Agreement") dated as of June 6,
1996, by and among HURCO COMPANIES, INC., an Indiana corporation (the
"Company"), BRYNWOOD PARTNERS II L.P., a Delaware limited partnership
("Brynwood II"), Hendrik J. Hartong, Jr. ("Hartong") and Richard T. Niner
("Niner," and together with Brynwood II and Hartong, the "Standby
Purchasers").
W I T N E S S E T H:
-------------------
WHEREAS, the Company proposes, as soon as practicable after the
Rights Offering Registration Statement, as defined herein, becomes effective,
to distribute to holders of its common stock (the "Common Stock") of record
as of the close of business on June 5, 1996 (the "Record Date"), non-
transferable rights (the "Rights") to subscribe for and purchase up to an
aggregate of 1,085,296 additional shares of Common Stock (the "New
Shares") at a subscription price (the "Subscription Price") of $4.63 per
share (the "Rights Offering"); and
WHEREAS, pursuant to the Rights Offering, stockholders of record
will receive .20 of a Right for each share of Common Stock held by
them as of the Record Date, and each whole Right will entitle the holder to
purchase one New Share of Common Stock at the Subscription Price (the "Basic
Subscription Privilege"); and
WHEREAS, each Right will also carry the right (the
"Oversubscription Privilege") to subscribe at the Subscription Price for
additional New Shares that are not otherwise purchased by stockholders
through the exercise of the Basic Subscription Privilege; and
WHEREAS, the Company desires to assure the sale of at least
604,752 of the New Shares in order to realize proceeds of not less
than $2,800,000 as a result of the Rights Offering (the "Minimum Proceeds");
and
WHEREAS, Brynwood Partners Limited Partnership ("Brynwood I"), the
owner of 1,390,001 shares (or approximately 25.6% of the outstanding shares)
of the Common Stock, has advised the Company that, due to liquidity
limitations, it will not be able to exercise any of its Rights; and
<PAGE>
WHEREAS, in lieu thereof, and to assist the Company in its efforts
to assure realization of the Minimum Proceeds, Brynwood II, an affiliate of
Brynwood I, has offered to purchase from the Company and the Company is
willing to sell to Brynwood II, at the Subscription Price, all of the
278,001 New Shares that otherwise would have been available for purchase by
Brynwood I pursuant to its Basic Subscription Privilege; and
WHEREAS, in order to further assure that the Company will realize
the Minimum Proceeds from the Rights Offering, the Company has requested the
Standby Purchasers to agree to purchase from the Company upon expiration of
the Rights Offering, and the Standby Purchasers are willing to so purchase,
up to 326,751 New Shares, at the Subscription Price, to the extent such
New Shares are not purchased by stockholders pursuant to the exercise of
Rights, including the Oversubscription Privilege; and
WHEREAS, in order to induce the Standby Purchasers to enter into
this Agreement, the Company has agreed to grant the Standby Purchasers
registration rights with respect to the New Shares purchased by them pursuant
to this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Section 1. Certain Other Definitions. The following terms used
-------------------------
herein shall have the meanings set forth below:
"Business Day" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State
of New York or the State of Indiana.
"Closing" shall mean the closing of the purchases described in
Section 2 hereof, which shall be held at 10 a.m. on the Closing Date at the
offices of Baker & Daniels, or such other time and place as may be agreed to
by the parties hereto.
"Closing Date" shall mean the date that is three business days
after the Rights Offering Expiration Date, or such other date as may be
agreed to by the parties hereto.
"Commission" shall mean the United States Securities and Exchange
Commission, or any successor agency thereto.
2
<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"Person" shall mean an individual, corporation, partnership,
association, joint stock company, limited liability company, joint venture,
trust, governmental entity, unincorporated organization or other legal
entity.
"Prospectus" shall mean a prospectus, as defined in Section 2(10)
of the Securities Act, that meets the requirements of Section 10 of the
Securities Act and is current with respect to the securities covered thereby.
"Rights Offering Expiration Date" shall mean the date on which the
subscription period (as the same may be extended for up to thirty (30) days
by the Company at the request or with the consent of the Standby Purchasers)
under the Rights Offering expires.
"Rights Offering Prospectus" shall mean the final Prospectus
included in the Rights Offering Registration Statement for use in connection
with the issuance of the Rights.
"Rights Offering Registration Statement" shall mean the Company's
Registration Statement on Form S-3 under the Securities Act or such other
appropriate form under the Securities Act, pursuant to which the Rights and
underlying shares of Common Stock will be registered pursuant to the
Securities Act.
"Securities" shall mean those of the New Shares that are purchased
by the Standby Purchasers pursuant to Section 2 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the Commission thereunder.
Section 2. Standby Purchase Commitment.
---------------------------
(a) Brynwood II hereby agrees to purchase from the Company, and
the Company hereby agrees to sell to Brynwood II, at the Subscription Price,
all of the 278,001 New Shares that
3
<PAGE>
otherwise would have been available for purchase by Brynwood I pursuant to
its Basic Subscription Privilege.
(b) The Standby Purchasers hereby agree to purchase from the
Company, and the Company hereby agrees to sell to the Standby Purchasers, at
the Subscription Price, up to 326,751 New Shares if and to the extent
such shares are not purchased by stockholders pursuant to the exercise of
Rights, including the Oversubscription Privilege. It is understood and
agreed that, if and to the extent that the Standby Purchasers are required to
purchase New Shares pursuant to this subsection (b), such New Shares shall be
so purchased by each of the Standby Purchasers, severally and not jointly, as
nearly as may be practicable in equal proportionate amounts.
(c) Payment of the Subscription Price for the Securities shall be
made, on the Closing Date, against delivery of certificates evidencing the
Securities, in United States dollars by means of certified or cashier's
checks, bank drafts, money orders or wire transfers.
Section 3. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to the Standby Purchasers
as follows, which representations and warranties are, as of the date hereof,
and will be, as of the Closing Date, true and correct:
(i) At the time the Rights Offering Registration Statement
becomes effective, the Rights Offering Registration Statement will
comply in all material respects with the requirements of the Securities
Act and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, at the time
the Rights Offering Registration Statement becomes effective and at the
Closing Date, will not include an untrue statement or a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties
-------- -------
in this subsection shall not apply to statements in or omissions from
the Rights Offering Registration Statement or the Prospectus made in
reliance upon and in conformity with the information furnished to the
Company in writing by the Standby Purchasers for use in the Rights
Offering Registration Statement or in the Prospectus.
4
<PAGE>
(ii) The documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, when they
became effective or at the time they were filed with the Commission, as
the case may be, complied in all material respects with the applicable
provisions of the Exchange Act.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a binding
obligation of the Company enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(b) Each Standby Purchaser, severally and not jointly, represents
and warrants to the Company, as to itself only, as follows, which
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct:
(i) In the case of Brynwood II, this Agreement has been duly
and validly authorized, executed and delivered by Brynwood II and
constitutes a binding obligation of Brynwood II enforceable against it
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity).
(ii) In the case of each of the other Standby Purchasers,
such Standby Purchaser has the legal capacity to enter into, execute and
deliver this Agreement and this Agreement constitutes a binding
obligation of such Standby Purchaser enforceable against him in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general
5
<PAGE>
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(iii) Such Standby Purchaser will not sell or otherwise
transfer any of the Securities (or any interest thereon) except in
compliance with the registration requirements and Prospectus delivery
provisions of the Securities Act or an applicable exemption therefrom.
Section 4. Deliveries at Closing.
---------------------
(a)(i) At the Closing, the Company shall deliver to each of the
Standby Purchasers the following:
(A) A certificate or certificates representing the number of
shares of Common Stock issued to each of the Standby Purchasers pursuant
to Section 2 hereof; and
(B) A certificate of an officer of the Company to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date.
(b)(i) At the Closing, each of the Standby Purchasers shall
deliver to the Company the following:
(A) Payment of the Subscription Price of the Securities
purchased by such Standby Purchaser, as set forth in Section 2(c)
hereof; and
(B) A certificate of such Standby Purchaser to the effect
that the representations and warranties of such Standby Purchaser
contained in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date.
Section 5. Registration Rights.
-------------------
(a) Demand Rights. If, in connection with a proposed offer for
-------------
sale, sale or other disposition of Securities by a Standby Purchaser,
delivery of a Prospectus would be required under the Securities Act, then,
upon the written request of such Standby Purchaser, the Company will take
such action, including, if necessary, the filing of a
6
<PAGE>
registration statement under the Securities Act or a Post-Effective Amendment
to the Rights Offering Registration Statement and the use of its best efforts
to cause the same to become effective under the Securities Act, as may be
necessary and appropriate to make available, and shall furnish to such
Standby Purchaser such number of copies as such Standby Purchaser reasonably
may request of, a Prospectus that will permit such Standby Purchaser to
effectuate the offer for sale and sale, or other disposition, of the
Securities that are the subject matter of such request in accordance with,
and for the duration of the period of time contemplated by, the intended
method of distribution specified in such request; provided, however, that the
-------- -------
Company shall be obligated to take such actions in respect such requests on
no more than two (2) occasions.
(b) "Piggy-back" Rights. (i) If the Company at any time
-------------------
proposes to file on its behalf and/or on behalf of any of its security
holders, including any of the Standby Purchasers, a registration statement
under the Securities Act on any form (other than a registration statement on
Form S-8 or any successor form thereto) for the general registration of
shares of its Common Stock for offering and sale for cash, it will give to
the Standby Purchasers written notice thereof at least 20 days before the
initial filing of such registration statement, which notice shall set forth
an offer to each of the Standby Purchasers to include within the coverage of
such registration statement such amount of the Securities then owned by such
Standby Purchaser as such Standby Purchaser may request.
(ii) Each Standby Purchaser desiring to have Securities included
within the coverage of a registration statement pursuant to this Section 5(b)
shall so advise the Company in writing within ten days after the receipt of
the notice specified in clause (i) of this Section 5(b), setting forth the
amount of such Securities for which inclusion is requested. The Company
shall thereupon include in such filing the amount of Securities for which
inclusion is so requested and shall use its best efforts to effect
registration under the Securities Act of such Securities. Notwithstanding
the foregoing, if the registration statement that is the subject of the
Company's notice pursuant to clause (i) of this Section 5(b) relates to a
proposed underwritten offering of Common Stock for the account of the Company
and the managing underwriter of such offering shall advise the Company in
writing that, in its opinion, the distribution of the Securities requested to
be included in the registration
7
<PAGE>
statement by the Standby Purchasers would materially adversely affect the
offering and sale of Common Stock by the underwriters for the account of the
Company, then the Standby Purchasers shall reduce, pro rata, the amount of
--- ----
Securities requested to be included by them within the coverage of such
registration statement or, if so requested by the Company, based upon the
recommendation of the managing underwriter, shall defer the offering and sale
of such Securities for a period of up to 90 days following the consummation
of the offering and sale of shares by the Company.
(c) Required Information. It shall be a condition precedent to the
--------------------
obligation of the Company to take any action pursuant to this Section 5 in
respect of the securities which are to be registered at the request of any
holder of Securities that such holder shall furnish to the Company such
information regarding the securities held by such holder and the intended
method of disposition thereof as the Company shall reasonably request and as
shall be required in connection with the action taken by the Company.
(d) Updating of Disclosure. Whenever Securities owned by a Standby
----------------------
Purchaser are included within the coverage of a Prospectus pursuant to the
provisions of either paragraph (a) or paragraph (b) of this Section 5, the
Company shall take such action as reasonably may be required to cause the
information contained in such Prospectus to remain current for so long as may
be necessary to enable such Standby Purchaser to complete the sale of such
Securities in accordance with the plan of distribution set forth in such
Prospectus; provided, however, that if for any reason the Company is
-------- -------
ineligible to use Form S-3 for registration of such Securities at the date of
such Prospectus, the Company shall not be obligated to keep such Prospectus
current for more than a maximum period of ninety (90) days.
(e) Expenses. All expenses incurred by the Company in complying
--------
with this Section 5, including, without limitation, all registration and
filing fees (including all expenses incident to filing with the NASD),
printing expenses, fees and disbursements of counsel for the Company and
expenses of complying with applicable securities or blue sky laws of the
several states in which the Securities may be offered for sale or sold, as
well as the fees and disbursements of counsel for the Standby Purchasers,
shall be borne by the Company. Any underwriting discounts or commissions
relating to the sale of Securities by the Standby Purchasers shall be borne
by the Standby Purchasers.
8
<PAGE>
Section 6. Indemnification and Contribution.
--------------------------------
(a) In the event of any registration of any Securities under the
Securities Act pursuant to this Agreement, the Company shall indemnify and
hold harmless such Standby Purchasers and each other Person (including each
underwriter) who participated in the offering of such Securities and each
other Person, if any, who controls such Standby Purchaser or such
participating Person within the meaning of the Securities Act (all such
Persons being hereinafter referred to, collectively, as the "Standby
Indemnified Persons"), against any losses, claims, damages or liabilities,
joint or several, to which any of the Standby Indemnified Persons may become
subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any alleged untrue statement of
any material fact contained, on the effective date thereof, in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and shall reimburse each such
Standby Indemnified Person for any legal or any other expenses reasonably
incurred by such Standby Indemnified Person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Company shall not be liable in any such case to any Standby
-------
Independent Person to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or
alleged omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Standby Indemnified
Person specifically for use therein or (in the case of any registration
pursuant to Section 5(a) hereof so furnished for such purposes by any
underwriter. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Standby Indemnified Person,
and shall survive the transfer of such Securities by such Standby Indemnified
Person.
(b) Each Standby Purchaser by acceptance thereof, agrees to
indemnify and hold harmless the Company, its directors and officers and each
other Person, if any, who controls the Company within the meaning of the
Securities Act (all such Persons being hereinafter referred to, collectively,
9
<PAGE>
as the "Company Indemnified Persons," and together with the Standby
Indemnified Persons, the "Indemnified Persons") against any losses, claims,
damages or liabilities, joint or several, to which any of the Company
Indemnified Persons may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information in writing provided to the Company by such Standby Purchaser
specifically for use in any registration statement under which Securities
were registered under the Securities Act at the request of such Standby
Purchaser, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereto.
(c)(i) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Person hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such Indemnified Person, shall
contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and Indemnified Person in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and Indemnified Persons shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, the indemnifying party or the Indemnified Persons,
and their relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(c) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
10
<PAGE>
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 7. Selection of Managing Underwriters. The managing
----------------------------------
underwriter or underwriters for any underwritten offering of Securities on
behalf of the Standby Purchasers pursuant to Section 5 hereof shall be
selected by the Standby Purchasers, subject to the reasonable approval of the
Company.
Section 8. Notices. All notices, communications and deliveries
-------
required or permitted by this Agreement shall be made in writing signed by
the party making the same, shall specify the Section of this Agreement
pursuant to which it is given or being made and shall be deemed given or made
(i) on the date delivered if delivered by telecopy or in person, (ii) on the
third (3rd) Business Day after it is mailed if mailed by registered or
certified mail (return receipt requested) (with postage and other fees
prepaid) or (iii) on the day after it is delivered, prepaid, to an overnight
express delivery service that confirms to the sender delivery on such day, as
follows:
(a) if to any of the Standby Purchasers, at:
c/o Brynwood Partners II L.P.
Two Soundview Drive
Greenwich, Connecticut 06836
Attention: Mr. Richard T. Niner
Telecopy No.: (203) 622-0559
(b) if to the Company, at:
Hurco Companies, Inc.
One Technology Way
Indianapolis, Indiana 46268
Attention: Mr. Roger Wolf
Telecopy No.: (317) 328-2811
with copies, in the case of (a) or (b) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen H. Cooper, Esq.
Telecopy No.: (212) 310-8007
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in
11
<PAGE>
writing. If notice is given pursuant to this Section 8 of any assignment to
a permitted successor or assign of a party hereto, the notice shall be given
as set forth above to such successor or assign of such party.
Section 9. Secretary to Retain Copy. A copy of this Agreement
------------------------
shall be filed with the Secretary of the Company, and the Secretary shall
make it available to any holder requesting it at all reasonable times during
normal business hours.
Section 10. Assignment. This Agreement will be binding upon, and
----------
will inure to the benefit of and be enforceable by, the parties hereto and
their respective successors and assigns, including any person to whom
Securities are transferred in accordance herewith.
Section 11. Entire Agreement. This Agreement embodies the entire
----------------
agreement and understanding between the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties, or undertakings, other than those set forth or referred to
herein, with respect to the standby purchase commitments or the registration
rights granted by the Company with respect to the Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter of this Agreement.
Section 12. Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the internal laws of the State of Indiana
(other than its rules of conflicts of laws to the extent the application of
the laws of another jurisdiction would be required thereby).
Section 13. Severability. If any provision of this Agreement or
------------
the application thereof to any person or circumstances is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons
or circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
12
<PAGE>
Section 14. Extension or Modification of Rights Offering. Without
--------------------------------------------
the prior written consent of the Standby Purchasers, the Company will not
permit the Rights Offering Expiration Date to be extended or any of the other
terms or conditions of the Rights, the New Shares, the Subscription Agency
Agreement, dated as of the date hereof, between the Company and State
Street Bank and Trust Company, as subscription agent, or the offering of the
New Shares for subscription as described in the Rights Offering Prospectus to
be amended, modified or terminated in any material respect, except that,
without such consent, the Company may (i) waive irregularities in the manner
of exercise of the Rights, and (ii) waive conditions relating to the method
(but not the timing) of the exercise of the Rights to the extent that such
waiver does not materially adversely affect the interests of the Standby
Purchasers. At the request of the Standby Purchasers, the Company will extend
the Rights Offering Expiration Date, but in no event shall any such extension
(i) be made other than with the consent or at the request of the Standby
Purchasers or (ii) postpone the Rights Offering Expiration Date to a date
more than thirty (30) days later than the date set forth in the Rights
Offering Prospectus.
Section 15. Miscellaneous.
-------------
(a) The Company shall not after the date of this Agreement enter
into any agreement with respect to its securities which is inconsistent with
or violates the rights granted to holders of Securities in this Agreement;
provided, however, that the Company shall be permitted to enter into
-------- -------
registration rights agreements after the date of this Agreement.
(b) The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning of this Agreement.
(c) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which, when taken
together, shall constitute one and the same instrument.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the date first above written.
HURCO COMPANIES, INC.
By: /s/ Roger Wolf
-------------------------------
Name: Roger Wolf
Title: Senior Vice President
and Treasurer
BRYNWOOD PARTNERS II L.P.
By: Brynwood Management II
(its general partner)
By: /s/ Richard T. Niner
-------------------------------
Name: Richard T. Niner
Title: General Partner
/s/ Hendrik J. Hartong, Jr.
-------------------------------
Hendrik J. Hartong, Jr.
/s/ Richard T. Niner
-------------------------------
Richard T. Niner
14
<PAGE>
EXHIBIT 5
Baker & Daniels
300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204-1782
(317) 237-0300
June 6, 1996
Hurco Companies, Inc.
One Technology Way
Indianapolis, IN 46268
Ladies and Gentlemen:
We have examined the corporate records and proceedings of Hurco Companies,
Inc., an Indiana corporation (the "Company"), with respect to:
(a) the organization of the Company; and
(b) the legal sufficiency of all corporate proceedings of the Company
taken in connection with the authorization, issuance, form, validity and
nonassessability of up to 1,085,296 shares of Common Stock, no par value
(the "Shares"), to be offered under the Registration Statement on Form S-3,
as amended (the "Registration Statement"), in connection with which this
opinion letter is given.
The law covered by this opinion letter is limited to the laws of the State
of Indiana.
Based on the foregoing, we are of the opinion that:
1. The Company is a validly existing corporation under the laws of the
State of Indiana.
2. The Shares being offered pursuant to the Registration Statement are
duly authorized and, when issued in the manner described in the Registration
Statement, will be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement and to the reference to our name in the Prospectus
constituting a part of such
<PAGE>
Registration Statement under the heading "Legal Matters." In giving such
consent, we do not hereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Securities and Exchange Commission thereunder.
Yours very truly,
/s/ Baker & Daniels
<PAGE>
EXHIBIT 8
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
June 6, 1996
Hurco Companies, Inc.
One Technology Way
Indianapolis, Indiana 46268
Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the distribution by Hurco Companies, Inc. (the "Company") to
holders of record of its common stock, no par value (the "Common Stock"), of
non-transferable rights (the "Rights") to subscribe for and purchase additional
shares of common stock of the Company (the "Rights Offering").
In formulating our opinion as to the matters certified, we have
examined such documents as we deemed appropriate, including the Registration
Statement on Form S-3, dated June 6, 1996, filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1993, as amended to the
date hereof (with all amendments thereto, the "Registration Statement"). In
addition, we have obtained such additional information as we have deemed
relevant and necessary through consultation with various officers and
representatives of the Company.
Our opinion set forth below assumes (i) the accuracy of the statements
and facts concerning the Rights Offering set forth in the Registration Statement
and of the representations made to us by the Company, which are set forth in the
Certificate from the Company, dated the date hereof, (ii) that the Rights
Offering is consummated in the manner contemplated by, and in accordance with
the terms set forth in, the Registration Statement, and (iii) that no person, in
his, her or its capacity as a shareholder of the Company, receives (either
directly or indirectly) a distribution of cash or property from the Company,
including, without limitation, a distribution of cash or property in
<PAGE>
Hurco Companies, Inc.
June 6, 1996
Page 2
redemption of stock of the Company, within the three-year period following the
date of distribution of the Rights.
The terms of the Rights Offering, which are set forth in the
Registration Statement, are incorporated herein by reference.
Based upon the facts and statements with respect to the Rights
Offering, as set forth in the documents referred to above, and subject to the
assumptions set forth above, we hereby confirm that the legal conclusions set
forth in the discussion under the heading "FEDERAL INCOME TAX CONSEQUENCES" in
the Registration Statement accurately reflects our opinion as to the material
federal income tax consequences to holders of Common Stock in respect of the
receipt of Rights, the exercise or expiration of such Rights and the sale of
Common Stock acquired through the exercise of such Rights.
The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder, published pronouncements of the Internal Revenue Service and case
law, any of which may be changed at any time with retroactive effect. No
opinion is expressed concerning any matters other than those specifically
referred to herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to our firm therein.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Hurco Companies, Inc.
Indianapolis, Indiana
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 1, 1995,
except with respect to the matters discussed in Notes 4 and 12 as to which the
date is January 26, 1996, included in the Company's Form 10-K, for the year
ended October 31, 1995, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
June 3, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Hurco Companies, Inc.
Indianapolis, Indiana
We consent to the incorporation by reference in the Registration Statement of
Hurco Companies, Inc. on Form S-3 of our report dated December 10, 1993 on our
audit of the consolidated financial statements and financial statement schedule
of Hurco Companies, Inc., for the year ended October 31, 1993, which report is
included in the Annual Report on Form 10-K. We also consent to the reference to
our firm under the caption "experts".
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
June 3, 1996
<PAGE>
EXHIBIT 99.1
[FORM OF SUBSCRIPTION CERTIFICATE]
SUBSCRIPTION CERTIFICATE NUMBER:
NUMBER OF RIGHTS:
EXPIRATION DATE: JULY 3, 1996, unless extended
HURCO COMPANIES, INC.
SUBSCRIPTION RIGHT FOR SHARES OF COMMON STOCK
SUBSCRIPTION PRICE: $4.63 PER SHARE
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
COMPANY'S PROSPECTUS DATED JUNE 6, 1996 (THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON
REQUEST FROM GEORGESON & COMPANY INC. (THE "INFORMATION AGENT") AT WALL STREET
PLAZA, NEW YORK, NEW YORK 10005 (TOLL-FREE (800) 223-2064). CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED
TO SUCH TERMS IN THE PROSPECTUS.
THIS SUBSCRIPTION CERTIFICATE (THE "SUBSCRIPTION CERTIFICATE") OR A NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY STATE STREET BANK & TRUST COMPANY
("THE SUBSCRIPTION AGENT") WITH PAYMENT IN FULL BY 5:00 P.M., NEW YORK CITY
TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO THIRTY (30) DAYS BY THE
COMPANY AT THE REQUEST OF THE STANDBY PURCHASERS (THE "EXPIRATION TIME").
THE RIGHTS REPRESENTED BY THIS SUBSCRIPTION CERTIFICATE, IN WHOLE OR IN
PART, MAY BE EXERCISED BY DULY COMPLETING AND SIGNING THE EXERCISE FORM.
RIGHTS HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
PROSPECTUS AND INSTRUCTIONS FOR COMPLETING SUBSCRIPTION CERTIFICATES,
ADDITIONAL COPIES OF WHICH ARE AVAILABLE FROM THE SUBSCRIPTION AGENT. AN
EXERCISE OF RIGHTS EVIDENCED HEREBY IS IRREVOCABLE.
This nontransferable Subscription Certificate represents the number of
Rights set forth above. The registered holder whose name is inscribed hereon
(the "Holder") is entitled to subscribe for and purchase from Hurco Companies,
Inc. (the "Company"), at the Subscription Price, one (1) share of common
stock, no par value (the "Common Stock"), of Hurco Companies, Inc. (the
"Company") for each whole Right evidenced hereby upon the terms and subject to
the conditions set forth in the Prospectus and the Instructions for Completing
Subscription Certificates. Common Stock subscribed for pursuant to exercise of
the Basic Subscription Privilege shall be delivered as soon as practicable
after the subscriptions have been accepted by the Subscription Agent. This
Subscription Certificate also evidences the right of the Holder to subscribe
for additional shares of Common Stock, subject to proration and to the
conditions set forth herein and in the Prospectus. Common Stock subscribed for
pursuant to the Oversubscription Privilege shall be delivered as soon as
practicable after the Expiration Time and after all prorations have been
effected.
Dated: June 6, 1996
/s/ Roger J. Wolf /s/ Brian D. McLaughlin
Secretary President
<PAGE>
IMPORTANT: PLEASE READ ALL INSTRUCTIONS CERTIFICATE CAREFULLY.
EXERCISE FORM
The undersigned hereby irrevocably exercises one or more Rights to subscribe
for share of Common Stock as indicated below, on the terms and subject to the
conditions specified in the Prospectus, receipt of which is hereby
acknowledged.
(a) Number of shares subscribed for pursuant to the Basic Subscription
Privilege: (a)__________
(b) Number of shares subscribed for pursuant to the Oversubscription
Privilege:/1/ (b)__________
(c) Total shares (sum of lines (a) and (b)): (c)__________
(d) Total Subscription Price (total number of shares subscribed for pursuant
to both the Basic Subscription Privilege and the Oversubscription
Privilege multiplied by the Subscription Price of $______:/2/ (d)__________
(e) Method of Payment (check and complete appropriate box(es)):
[_] Uncertified, certified or cashier's check, bank draft or money order in the
amount of $______ payable to State Street Bank & Trust Company, subscription
agent.
[_] Wire transfer in the amount of $______ directed to State Street Bank & Trust
Company, subscription agent, ABA No. 0110-0002-8, Hurco Companies, Inc.
Rights Offering DDA No.: 7608-355-9, Attention: BFDS CST REORG/HRCCM.
Indicate name of institution wire transferring funds and name of registered
holder: ____________________________________________________________________
(f) Notice of Guaranteed Delivery. Check the box below if Rights are being
exercised pursuant to a Notice of Guaranteed Delivery delivered to the
Subscription Agent prior to the date hereof and complete the
following: [_]
Name(s) of Registered holder _________________
Window Ticket Number (if any) ________________
Date of Execution of Notice of Guaranteed
Delivery ______________________________ , 1996
Name of Eligible Institution which Guaranteed
Delivery _____________________________________
Telephone Number _____________________________
IMPORTANT: RIGHTS HOLDERS SIGN BELOW.
THE EXERCISE OF YOUR RIGHTS WILL NOT BE VALID UNLESS YOU SIGN BELOW.
__________________________________________
(Signature(s) of Registered
holder(s))
Dated:__________, 1996
Must be signed by the registered holder(s) as name(s) appear(s) on this
Subscription Certificate. If signature is by trustee(s), executor(s),
administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a
corporation or another acting in a fiduciary or representative capacity,
please provide the following information. See Instructions for Completing
Subscription Certificates. Please print.
Name: ____________________________________
Capacity (full title): ___________________
Address (including zip code): ____________
__________________________________________
Home Telephone Number (including area code): __________________
Business Telephone Number (including area code): ______________
Tax Identification or Social Security Number: _________________
- --------
1. To exercise the Oversubscription Privilege, the undersigned must fully
exercise the Basic Subscription Privilege. The maximum number of shares
that may be subscribed for pursuant to the Oversubscription Privilege is
1,085,296.
2. If the aggregate Subscription Price paid by an exercising Rights holder is
insufficient to purchase the number of shares of Common Stock that such
holder indicates are being subscribed for, or if any exercising Rights
holder does not specify the number of shares of Common Stock to be
purchased, then such Rights holder will be deemed to have exercised first
the Basic Subscription Privilege in full and second the Oversubscription
Privilege to purchase shares of Common Stock to the full extent of the
payment rendered (subject to the limitation on the maximum number of shares
permitted and to proration under certain circumstances as described in the
Prospectus). If the aggregate Subscription Price paid by an exercising
Rights holder exceeds the amount necessary to purchase the number of shares
of Common Stock for which the Rights holder has indicated an intention to
subscribe, then the Rights holder will be deemed to have exercised first
the Basic Subscription Privilege (if not already fully exercised) and
second the Oversubscription Privilege to the full extent of the excess
payment tendered (subject to the restrictions described above). Any excess
funds received in payment of the Subscription Price for shares that are
subscribed for by a Rights holder but not allocated to such Rights holder
pursuant to the Oversubscription Privilege will be mailed by the
Subscription Agent as soon as practicable after the Expiration Time and
after all prorations and adjustments as described in the Prospectus have
been effected.
2
<PAGE>
INSTRUCTIONS FOR COMPLETING HURCO COMPANIES, INC.
SUBSCRIPTION CERTIFICATES
----------------
CONSULT THE INFORMATION AGENT OR YOUR BANK OR
BROKER AS TO ANY QUESTIONS
----------------
The following instructions relate to a rights offering (the "Rights
Offering") by Hurco Companies, Inc., an Indiana corporation (the "Company"),
to the holders of its common stock, no par value (the "Common Stock"), as
described in the Company's Prospectus dated June 6, 1996 (the "Prospectus") .
Holders of record of Common Stock at the close of business on June 5, 1996
(the "Record Date") are receiving .20 of a nontransferable subscription right
(each, a "Right") for each share of Common Stock held of record on the Record
Date. The Rights are evidenced by nontransferable subscription certificates
("Subscription Certificates"), which record holders are receiving with copies
of the Company's Prospectus. Each whole Right entitles the holder thereof to
purchase from the Company one share of Common Stock (the "Basic Subscription
Privilege") at the subscription price of $4.63 (the "Subscription Price"). No
fractional Rights or cash in lieu thereof have been distributed or paid by the
Company. The number of Rights distributed to each holder of Common Stock have
been rounded up to the nearest whole number. An aggregate of 1,085,296 Rights
exercisable to purchase an aggregate of 1,085,296 shares of Common Stock are
being distributed in connection with the Rights Offering.
Each holder of Rights who elects to exercise the Basic Subscription
Privilege in full will also be entitled to subscribe, subject to proration,
for up to a maximum of 1,085,296 additional shares of Common Stock at the
Subscription Price (the "Oversubscription Privilege"). Brynwood Partners
Limited Partnership ("Brynwood I"), the holder of 1,390,001 shares of Common
Stock, has advised the Company that it does not intend to exercise any of its
Rights. In lieu thereof, Brynwood Partners II L.P. ("Brynwood II"), an
affiliate of Brynwood I, has agreed to purchase from the Company and the
Company has agreed to sell to Brynwood II, at the Subscription Price, all of
the 278,001 shares that otherwise would have been available for purchase by
Brynwood I pursuant to exercise of its Basic Subscription Privilege. If the
number of shares of Common Stock available (the "Excess Shares") after (i) the
sale to Brynwood II of the shares that otherwise could have been purchased by
Brynwood I and (ii) the satisfaction of all subscriptions pursuant to exercise
of the Basic Subscription Privilege by stockholders other than Brynwood I is
insufficient to satisfy in full all elections to exercise the Oversubscription
Privilege, the Excess Shares will be allocated among holders who have
exercised their Oversubscription Privilege, pro rata, in the same ratio that
the number of shares subscribed for by each such holder pursuant to exercise
of the Oversubscription Privilege bears to the total number of shares
subscribed for by all such holders pursuant to exercise of the
Oversubscription Privilege. No fractional shares will be issued. The
Oversubscription Privilege is not transferable. See "The Rights Offering--
Subscription Privileges--Oversubscription Privilege; and--Standby Commitments"
in the Prospectus.
The Rights will expire at 5:00 p.m, New York City time, on July 3, 1996,
unless extended for up to thirty (30) days (the "Expiration Time").
The number of Rights to which you are entitled is printed on the face of
your Subscription Certificate. You should indicate your wishes with regard to
the exercise of your Rights by completing the appropriate form or forms on the
back of your Subscription Certificate and returning the Subscription
Certificate to the Subscription Agent in the envelope provided.
YOUR SUBSCRIPTION CERTIFICATE MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, OR
GUARANTEED DELIVERY PROCEDURES WITH RESPECT TO YOUR RIGHT MUST BE COMPLIED
WITH, AND PAYMENT OF THE SUBSCRIPTION PRICE, INCLUDING FINAL CLEARANCE OF ANY
<PAGE>
CHECKS, MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, AT OR BEFORE 5:00 P.M, NEW
YORK CITY TIME, ON JULY 3, 1996, OR ON SUCH LATER DATE AS THE EXPIRATION TIME
IS EXTENDED. YOU MAY NOT REVOKE ANY PROPER EXERCISE OF A RIGHT.
1. SUBSCRIPTION.
To exercise Rights, complete and sign the Exercise Form on the reverse side
of your Subscription Certificate and send it (or Notice of Guaranteed
Delivery), together with payment in full of the Subscription Price for each
share of Common Stock subscribed for pursuant to the Basic Subscription
Privilege and the Oversubscription Privilege to State Street Bank & Trust
Company, as Subscription Agent (the "Subscription Agent"). Payment of the
Subscription Price must be made for the full number of shares of Common Stock
being subscribed for (a) in U.S. dollars by check or postal, telegraphic or
express money order payable to State Street Bank & Trust Company, as
Subscription Agent or (b) by wire transfer of funds in U.S. dollars to the
account maintained by the Subscription Agent for such purpose at State Street
Bank & Trust, ABA No. 0110-0002-8; DDA No.: 7608-355-9; Attention: BFDS CST
REORG/HRCCM. THE SUBSCRIPTION PRICE WILL BE DEEMED TO HAVE BEEN RECEIVED BY
THE SUBSCRIPTION AGENT ONLY UPON (I) CLEARANCE OF ANY UNCERTIFIED CHECK, (II)
RECEIPT BY THE SUBSCRIPTION AGENT OF ANY CERTIFIED OR CASHIER'S CHECK OR OF
ANY POSTAL, TELEGRAPHIC OR EXPRESS MONEY ORDER, OR (III) RECEIPT OF COLLECTED
FUNDS IN THE SUBSCRIPTION AGENT'S ACCOUNT DESIGNATED ABOVE. IF PAYING BY
UNCERTIFIED PERSONAL CHECK, PLEASE NOTE THAT THE FUNDS PAID THEREBY MAY TAKE
AT LEAST FIVE BUSINESS DAYS TO CLEAR. ACCORDINGLY, REGISTERED RIGHTS HOLDERS
WHO WISH TO PAY THE SUBSCRIPTION PRICE BY MEANS OF AN UNCERTIFIED PERSONAL
CHECK ARE URGED TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE OF THE EXPIRATION TIME
TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY SUCH TIME AND ARE URGED
TO CONSIDER, IN THE ALTERNATIVE, PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S
CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
Alternatively, you may cause a written guarantee substantially in the form
of Exhibit A to these instructions (the "Notice of Guaranteed Delivery") from
a member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc., or from a commercial bank or
trust company having an office or correspondent in the United States (each, an
"Eligible Institution"), to be received by the Subscription Agent prior to the
Expiration Time; payment in full of the applicable Subscription Price may be
made separately as long as said payment is also received by the Subscription
Agent prior to the Expiration Time. Such Notice of Guaranteed Delivery must
state your name, the number of Rights represented by your Subscription
Certificate and the number of underlying shares of Common Stock being
subscribed for pursuant to the Basic Subscription Privilege and, if any,
pursuant to the Oversubscription Privilege, and must guarantee the delivery to
the Subscription Agent of your properly completed and executed Subscription
Certificate by 5:00 p.m., New York City time on July 9, 1996. Additional
copies of the Notice of Guaranteed Delivery may be obtained upon request from
the Information Agent at the address, or by calling the telephone number,
indicated below.
Banks, brokers and other nominee Rights holders who exercise the Basic
Subscription Privilege and the Oversubscription Privilege on behalf of
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company (by delivery to the Subscription Agent of a Nominee
Holder Certification substantially in the form available from the Information
Agent), as to the aggregate number of Rights which have been exercised and the
number of shares of Common Stock thereby subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege by each beneficial
owner of Rights (which may include such nominee) on whose behalf such nominee
is acting. If more Excess Shares are subscribed for pursuant to the
Oversubscription Privilege than are available for sale, Excess Shares will be
allocated pro rata, as described above.
ONCE A HOLDER HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE OR THE
OVERSUBSCRIPTION PRIVILEGE, THE EXERCISE MAY NOT BE REVOKED.
2
<PAGE>
The addresses and telephone numbers of the Subscription Agent are as
follows:
GENERAL INFORMATION:
(800) 426-5523
BY MAIL:
State Street Bank & Trust Company
Corporate Reorganization
P.O. Box 9061
Boston, MA 02205-8686
FACSIMILE TRANSMISSION COPY NUMBER:
(617) 774-4519
CONFIRM FACSIMILE BY TELEPHONE:
(617) 774-4511
BY OVERNIGHT COURIER:
State Street Bank & Trust Company
Corporate Reorganization
2 Heritage Drive
North Quincy, MA 02171
BY HAND, EITHER:
Bank of Boston State Street Bank and
c/o Boston Equiserve Trust Company
Corporate Reorganization c/o Boston Equiserve
55 Broadway--3rd Floor Corporate Reorganization
New York, NY 10006 Concourse Level
Boston, MA 02101
The address and telephone number of the Information Agent are as follows:
Georgeson & Company Inc.
Wall Street Plaza
New York, NY 10005
Call Toll Free (800) 223-2064
If the aggregate Subscription Price that you have paid is insufficient to
purchase the number of shares of Common Stock that you have indicated are
being subscribed for, or if you do not specify the number of shares of Common
Stock you intend to purchase, then you will be deemed to have exercised first,
the Basic Subscription Privilege, and second, the Oversubscription Privilege
to purchase shares of Common Stock to the full extent of the payment tendered
(subject to the restrictions described above). If the aggregate Subscription
Price that you have paid exceeds the amount necessary to purchase the number
of shares of Common Stock for which you have indicated an intention to
subscribe, then you will be deemed to have exercised first, the Basic
Subscription Privilege (if not already fully exercised) and second, the
Oversubscription Privilege to the full extent of the excess payments tendered
(subject to the restrictions described above).
2. ISSUANCE AND DELIVERY OF STOCK CERTIFICATES, ETC.
The following issuances, deliveries and payments will be made to you at the
address shown on the face of your Subscription Certificate.
3
<PAGE>
(a) Delivery of Certificates. Certificates for shares of Common Stock
issuable upon exercise of the Basic Subscription Privilege will be mailed as
soon as practicable after the subscriptions have been accepted by the
Subscription Agent. Certificates for shares of Common Stock issuable upon
exercise of the Oversubscription Privilege will be mailed as soon as
practicable after the Expiration Time and after all prorations have been
effected.
(b) Cash Payments. As soon as practicable after the Expiration Time and
after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected, the Subscription Agent will return by mail,
without interest or deduction, to each registered Rights holder exercising the
Oversubscription Privilege any excess funds received in payment of the
Subscription Price for Excess Shares that are subscribed for by such Rights
holder but not allocated to such Rights holder pursuant to the
Oversubscription Privilege.
3. SIGNATURES.
(a) Signatures by Registered Holder. The signature on the Subscription
Certificate must correspond with the name of the registered holder exactly as
it appears on the face of the Subscription Certificate, without any alteration
or change whatsoever. Joint owners should each sign. Persons who sign the
Subscription Certificate in a representative or other fiduciary capacity, such
as an executor, trustee or corporate officer, must indicate such capacity when
signing and, unless waived by the Subscription Agent in its sole and absolute
discretion, must present to the Subscription Agent satisfactory evidence of
their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Subscription
Certificate is signed by a person other than the holder named on the face of
the Subscription Certificate, proper evidence of authority of the person
signing the Subscription Certificate must accompany the same unless, for good
cause, the Subscription Agent dispenses with proof of authority.
4. METHOD OF DELIVERY.
The method of delivery of Subscription Certificate and payment of the
Subscription Price to the Subscription Agent will be at the election and risk
of the registered holder of the Rights but, if sent by mail, it is recommended
that they be sent by registered mail, properly insured, with return receipt
requested, and that a sufficient number of days be allowed to ensure delivery
to the Subscription Agent and the clearance of any uncertified personal checks
sent in payment of the Subscription Price prior to 5:00 p.m., New York City
time, on July 3, 1996.
5. SPECIAL PROVISIONS RELATING TO THE DELIVERY OF RIGHTS THROUGH THE
DEPOSITORY TRUST COMPANY.
Exercise of the Basic Subscription Privilege and the Oversubscription
Privilege may be effected through the facilities of The Depository Trust
Company ("DTC"). Rights exercised as part of the Basic Subscription Privilege
through DTC are referred to as "DTC Exercised Rights." The holder of DTC
Exercised Rights may also exercise the Oversubscription Privilege in respect
of such DTC Exercised Rights by properly executing and delivering to the
Subscription Agent at or prior to 5:00 p.m. New York City time, on July 3,
1996, a DTC Participant Oversubscription Exercise Form, in the form available
from the Information Agent, together with payment of the appropriate
Subscription Price for the number of shares of Common Stock for which the
Oversubscription Privilege is to be exercised.
If a Notice of Guaranteed Delivery relates to Rights with respect to which
exercise of the Basic Subscription Privilege will be made through DTC and such
Notice of Guaranteed Delivery also relates to the exercise of the
Oversubscription Privilege, a DTC Participant Oversubscription Exercise Form
must also be received by the Subscription Agent in respect of such exercise of
the Oversubscription Privilege at or prior to the Expiration Time.
4
<PAGE>
6. TRANSFER TAXES.
The Company will pay transfer taxes, if any, applicable to the issuance and
sale of Common Stock to a registered Rights holder upon the exercise of Rights
by such holder. If, however, a transfer tax is imposed for any reason other
than the issuance and sale of the Company's Common Stock to a registered
Rights holder upon exercise of Rights by such holder, the amount of any such
transfer taxes (whether imposed on the registered holder or on any other
person) will be payable by the registered holder or such other person. In any
such event, the Subscription Agent will be entitled to refuse to take the
action requested until it has received satisfactory evidence of the payment of
such taxes or exemption therefrom.
7. IRREGULARITIES.
All questions concerning the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by the Company, whose determinations
will be final and binding. The Company, in its sole discretion, may waive any
defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine, or reject the purported exercise of any
Rights Certificates will not be deemed to have been received or accepted until
all irregularities have been waived or cured within such time as the Company
determines, in its sole discretion. Neither the Company nor the Subscription
Agent will be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Certificates or
incur any liability for failure to give such notification.
8. LOST, STOLEN, MUTILATED OR DESTROYED SUBSCRIPTION CERTIFICATES.
Upon receipt by the Company and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, mutilation, or destruction
of a Subscription Certificate, and in the case of loss, theft or destruction,
of indemnity and/or security satisfactory to them, in their sole discretion,
and reimbursement to the Company and the Subscription Agent of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the
Subscription Certificate, if mutilated, the Subscription Agent will make and
deliver a new Subscription Certificate of like tenor to the registered Rights
holder in lieu of the Subscription Certificate so lost, stolen, mutilated or
destroyed. If required by the Company or the Subscription Agent, an indemnity
bond must be sufficient in the judgement of each party to protect the Company,
the Subscription Agent or any agent thereof from any loss which any of them
may suffer in a lost, stolen, mutilated or destroyed Subscription Certificate
is replaced.
5
<PAGE>
EXHIBIT A
TO INSTRUCTIONS
NOTICE OF GUARANTEED DELIVERY
FOR
SUBSCRIPTION CERTIFICATES
ISSUED BY
HURCO COMPANIES, INC.
This form, or one substantially equivalent thereto, must be used to exercise
Rights pursuant to the Rights Offering described in the Prospectus of Hurco
Companies, Inc., dated June 6, 1996 if a registered Rights holder cannot
deliver the Subscription Certificate to the Subscription Agent listed below at
or prior to 5:00 p.m., New York City time, on July 3, 1996, the Expiration
Time, or at such later time to which the Rights Offering may have been
extended. Such form must be delivered by hand or sent by facsimile
transmission or mail to the Subscription Agent, and must be received by the
Subscription Agent at or prior to the Expiration Time. See "The Rights
Offering--Exercise of Rights and Subscription Agent" in the Prospectus.
Payment of the Subscription Price of $4.63 per share for each share of the
Company's Common Stock subscribed for upon exercise of such Right must be
received by the Subscription Agent in the manner specified in the Instructions
at or prior to 5:00 p.m., New York City time, on July 3, 1996, even if the
Subscription Certificate evidencing such Right is being delivered pursuant to
the procedure for guaranteed delivery thereof.
THE SUBSCRIPTION AGENT IS:
State Street Bank & Trust Company
The addresses and telephone numbers of the Subscription Agent are:
GENERAL INFORMATION:
(800) 426-5523
BY MAIL:
State Street Bank & Trust Company
Corporate Reorganization
P.O. Box 9061
Boston, MA 02205-8686
FACSIMILE TRANSMISSION COPY NUMBER:
(617) 774-4519
CONFIRM FACSIMILE BY TELEPHONE:
(617) 774-4511
BY OVERNIGHT COURIER:
State Street Bank & Trust Company
Corporate Reorganization
2 Heritage Drive
North Quincy, MA 02171
BY HAND, EITHER:
Bank of Boston State Street Bank and
c/o Boston Equiserve Trust Company
Corporate Reorganization c/o Boston Equiserve
55 Broadway--3rd Floor Corporate Reorganization
New York, NY 10006 Concourse Level
Boston, MA 02101
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby represents that he or she is the registered holder of
Subscription Certificate(s) representing Rights and that such
Subscription Certificate(s) cannot be delivered to the Subscription Agent at
or before 5:00 p.m. New York City time, on July 3, 1996. Upon the terms and
subject to the conditions set forth in the Prospectus, receipt of which is
hereby acknowledged, the undersigned hereby elects to exercise (i) the Basic
Subscription Privilege to subscribe for one share of Common Stock per whole
Right with respect to each of Rights represented by such Subscription
Certificate and (ii) the Oversubscription Privilege relating to each such
Right to subscribe to the extent that Excess Shares (as defined in the
Prospectus) are available therefor, for an aggregate of Excess Shares (but
not more than 1,085,296 shares). The undersigned understands that payment of
the Subscription Price of $4.63 per share for each share of Common Stock
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege must be received by the Subscription Agent at or
before 5:00 p.m. New York City time, on July 3, 1996, and represents that such
payment in the aggregate amount of $ either (check appropriate box):
[_] is being delivered to the Subscription Agent; [_] has been delivered
separately to the
Subscription Agent; and
is being delivered in
the manner set forth
below (check appropriate
box and complete
information relating
thereto):
[_] wire transfer of funds
--name of transferor institution ____________________________________________
--date of transfer __________________________________________________________
--confirmation number, if available _________________________________________
[_] uncertified check (Payment by uncertified check will not be deemed to have
been received by the Subscription Agent until such check has cleared. Rights
holders paying by such method to make payment sufficiently in advance of the
Expiration Time to ensure that such payments are made by such date.)
[_] certified or cashier's check
[_] money order
--name of maker _____________________________________________________________
--date and number of check or money order ___________________________________
--bank on which check is drawn or issuer of money order _____________________
Signature _____________________________________________________________________
Name(s) _______________________________________________________________________
_______________________________________________________________________________
(PLEASE TYPE OR PRINT)
(If signature is by a trustee(s), executor(s), administrator(s),
guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation or
another acting in a fiduciary or representative capacity, such capacity must
be clearly indicated below.)
Address:
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Tel. No(s). _____________________________________________________
_______________________________________________________________________________
Subscription Certificate No(s). (if available) ________________________________
2
<PAGE>
GUARANTEE OF DELIVERY
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States
guarantees that the undersigned will deliver to the Subscription Agent the
Subscription Certificate(s) representing the Rights being exercised hereby,
and any other required documents, by 5:00 p.m., New York City time on July 9,
1996.
_____________________________________ Dated: ________________________, 1996
Name(s) _____________________________ _____________________________________
_____________________________________ _____________________________________
(Address)
(Name of Firm)
_____________________________________ _____________________________________
(Area Code and Telephone Number) (Authorized Signature)
The institution which completes this form must communicate the guarantee to
the Subscription Agent and must deliver the Subscription Certificate(s) to the
Subscription Agent within the time period shown herein. Failure to do so could
result in a financial loss to such institution.
3
<PAGE>
EXHIBIT 99.4
SUBSCRIPTION AGENCY AGREEMENT
SUBSCRIPTION AGENCY AGREEMENT (this "Agreement") dated as of June 6,
1996, between HURCO COMPANIES, INC., an Indiana corporation (the "Company"), and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts Trust Company (the
"Agent"), as subscription agent.
W I T N E S S E T H:
-------------------
WHEREAS, the Company proposes to distribute to the holders of its
common stock, no par value (the "Common Stock"), of record as of the close of
business on June 5, 1996 (the "Record Date"), certificates ("Subscription
Certificates") evidencing non-transferable rights (the "Rights") to subscribe
for and purchase additional shares of Common Stock at a subscription price (the
"Subscription Price") of $4.63 per share (the "Rights Offering"); and
WHEREAS, Brynwood Partners Limited Partnership I ("Brynwood I"), the
owner of 1,390,001 shares (or approximately 25.6% of the outstanding shares) of
Common Stock, has advised the Company that it does not intend to exercise any of
its Rights; and
WHEREAS, the Company has entered into a standby purchase agreement
with Brynwood Partners II L.P., an affiliate of Brynwood I ("Brynwood II"), and
Hendrik J. Hartong, Jr. and Richard T. Niner, both of whom are directors of the
Company (collectively, the "Standby Purchasers"), pursuant to which (i) Brynwood
II has agreed to purchase from the Company and the Company has agreed to sell to
Brynwood II, at the Subscription Price, all of the 278,001 shares of Common
Stock that otherwise would have been available for purchase by Brynwood I
pursuant to the exercise of its Basic Subscription Privilege (as defined in
Section 4 hereof), and (ii) the Standby Purchasers have agreed to purchase from
the Company, at the Subscription Price, an aggregate of up to 326,751 shares
of Common Stock to the extent such shares are not purchased by stockholders
pursuant to the exercise of Rights, including the Oversubscription Privilege (as
defined in Section 4 hereof).
WHEREAS, the Company intends to file with Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (the "Securities Act"), a
Registration Statement on Form S-3 (in the form in which it first
<PAGE>
becomes effective under the Securities Act, and as it may thereafter be amended,
the "Registration Statement") for the registration of the Rights and the Common
Stock underlying such Rights, which Registration Statement will include a
prospectus (in the form in which the Registration Statement first becomes
effective under the Securities Act, and as it may thereafter be amended, the
"Prospectus") containing the terms of the Rights Offering; and
WHEREAS, the Company desires the Agent to perform certain acts on
behalf of the Company and the Agent desires to so act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights to subscribe therein set forth, all upon the terms and conditions set
forth herein;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Section 1. Appointment of Agent. The Company hereby appoints and
--------------------
authorizes the Agent to act on its behalf in accordance with the provisions
hereof, and the Agent hereby accepts such appointment and agrees to so act. The
Company may from time to time appoint such co-agents as it may deem necessary or
desirable.
Section 2. Subscription Certificates.
-------------------------
(a) Each Subscription Certificate shall evidence the Rights of the
holder therein named to purchase Common Stock upon the terms and conditions
therein and herein set forth.
(b) The Agent shall, from a list of the Company's stockholders as of
the Record Date (which list shall be prepared by the Agent in its capacity as
transfer agent for the Common Stock), prepare and record Subscription
Certificates in the names of the stockholders of the Company as of the Record
Date, setting forth the number of Rights to subscribe to Common Stock calculated
on the basis of .20 of a Right for each share recorded on the Company's
books in the name of each such stockholder as of the Record Date; provided,
--------
however, the number of Rights distributed to each holder will be rounded up to
- -------
the nearest whole number and no fractional Rights or cash in lieu thereof will
be distributed or paid. All questions as to the validity and eligibility of any
rounding of fractional Rights shall be determined by the Company in its sole
discretion, and
2
<PAGE>
its determination shall be final and binding. Each Subscription Certificate
shall be dated as of the Record Date.
(c) The Subscription Certificates shall be executed on behalf of the
Company by its Chairman or President and by its Secretary or Assistant Secretary
by facsimile signature. Upon written notice from the Company executed by its
Chairman, President, any Vice President, Secretary or Assistant Secretary as to
the effective date of the Registration Statement, the Agent shall as promptly as
practicable deliver the Subscription Certificates, together with a copy of the
Prospectus, Instructions for Completing Subscription Certificates and all other
ancillary documents relating to the Rights Offering, to all stockholders as of
the Record Date. The form of Subscription Certificate and Instructions for
Completing Subscription Certificates are attached hereto as Exhibits A and B,
respectively. If an officer whose signature has been placed upon a Subscription
Certificate shall cease to hold such office at any time thereafter, such event
shall have no effect on the validity of such Subscription Certificate.
(d) The Agent shall keep or cause to be kept, at its principle
offices in the Commonwealth of Massachusetts, books for registration of the
Rights hereunder. Such books shall show the names and addresses of the
respective holders of the Rights and the number of Rights evidenced by each
outstanding Subscription Certificate.
Section 3. Division of Subscription Certificates; Lost, Stolen,
----------------------------------------------------
Mutilated or Destroyed Subscription Certificates.
- ------------------------------------------------
(a) A bank, trust company, securities dealer or broker holding Common
Stock on the Record Date for more than one beneficial owner may, by submitting a
written request by 5:00 p.m., New York City time on June 26, 1996, and upon
proper showing to The Depository Trust Company (the "DTC"), exchange its
Subscription Certificate to obtain Subscription Certificates for the number of
Rights which each such beneficial owner would have been entitled to receive had
each been the holder of record of such shares on the Record Date;
provided, however, each such beneficial owner's Rights will be rounded up to the
- -------- -------
nearest whole number and no fractional Rights or cash in lieu thereof will be
distributed or paid.
(b) Upon receipt by the Company and the Agent of evidence reasonably
satisfactory to them of the loss, theft, mutilation, or destruction or a
Subscription Certificate, and in the case of loss, theft or destruction, of
indemnity and/or
3
<PAGE>
security satisfactory to them, in their sole discretion, and reimbursement to
the Company and the Agent of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Subscription Certificate, if mutilated,
the Agent will make and deliver a new Subscription Certificate of like tenor to
the registered Rights holder in lieu of the Subscription Certificate so lost,
stolen, mutilated or destroyed. If required by the Company or the Subscription
Agent, an indemnity bond must be sufficient in the judgement of each party to
protect the Company, the Agent or any agent thereof from any loss which any of
them may suffer in a lost, stolen, mutilated or destroyed Subscription
Certificate is replaced.
Section 4. Subscription Privileges. Each Subscription Certificate
-----------------------
shall be irrevocable and non-transferable. The Agent shall maintain a register
of Subscription Certificates and the holders of record thereof. Each
Subscription Certificate shall, subject to the provisions thereof, entitle the
holder in whose name it is recorded to the following:
(a) each whole Right will entitle the holder thereof to purchase, at
the Subscription Price, one share of Common Stock (the "Basic Subscription
Privilege"); and
(b) each holder of Rights who elects to exercise the Basic
Subscription Privilege in full will be entitled to subscribe, subject to
proration, for up to 1,085,296 additional shares of Common Stock at the
Subscription Price (the "Oversubscription Privilege"). If the number of shares
of Common Stock available (the "Excess Shares") after (i) the sale to Brynwood
II of the shares that otherwise could have been purchased by Brynwood I and (ii)
the satisfaction of all subscriptions pursuant to the exercise of the Basic
Subscription Privilege by stockholders other than Brynwood I is not sufficient
to satisfy all subscriptions pursuant to the exercise of the Oversubscription
Privilege, the Excess Shares will be allocated pro rata (subject to the
elimination of fractional shares) among those holders who have exercised the
Oversubscription Privilege, in the same ratio that the number of shares so
subscribed for by each such holder pursuant to exercise of the Oversubscription
Privilege bears to the total number of shares so subscribed for by all such
holders pursuant to exercise of the Oversubscription Privilege.
Section 5. Exercise of Rights.
------------------
(a) Rights holders may exercise the Basic Subscription Privilege and
the Oversubscription Privilege by properly
4
<PAGE>
completing and signing the subscription form on the Subscription Certificate,
including, if required, a signature guarantee from an Eligible Institution (as
defined in "Instructions for Completing Subscription Certificates" accompanying
the Subscription Certificate), and mailing or delivering the Subscription
Certificate to Agent at its corporate office specified in the Prospectus,
together with payment of the aggregate Subscription Price in full, as set forth
in Section 6 hereof. A Right will not be deemed exercised until the Agent
receives both payment of the Subscription Price and a duly executed Subscription
Certificate (or until the Guaranteed Delivery Procedures set forth in Section
5(b), or the procedures with respect to exercises through the DTC set forth in
subsection (b) below, have been complied with). Once a Rights holder has
exercised a Right, such exercise may not be revoked.
(b) Exercise of the Basic Subscription Privilege and the
Oversubscription Privilege may be effected through the facilities of the DTC.
Exercises of the Oversubscription Privilege may also be effected by properly
executing and delivering to the Agent a DTC Participant Oversubscription
Exercise Form and a Nominee Holder Certification, together with payment of the
appropriate Subscription Price for the number of shares of Common Stock for
which the Oversubscription Privilege is to be exercised.
(c) A Rights holder may exercise Rights in whole or in part, but no
Rights may be exercised for fractional shares. If an exercising Rights holder
does not indicate the number of Rights being exercised, or does not forward full
payment of the aggregate Subscription Price for the number of Rights that the
Rights holder indicates are being exercised, then the Rights holder will be
deemed to have exercised the Basic Subscription Privilege with respect to the
maximum number of Rights that may be exercised for the aggregate Subscription
Price payment delivered by the Rights holder, and to the extent that the
aggregate Subscription Price payment delivered by the Rights holder exceeds the
product of the Subscription Price multiplied by the number of Rights evidenced
by the Subscription Certificate delivered by the Rights holder (such excess
being the "Subscription Excess"), the Rights holder will be deemed to have
exercised the Oversubscription Privilege to purchase, to the extent available
and subject to the restrictions described in
5
<PAGE>
Section 4(b) hereof, that number of whole Excess Shares equal to the quotient
obtained by dividing the Subscription Excess by the Subscription Price. Any
amount remaining after application of the foregoing procedures shall be returned
to the Rights holder by mail, without interest or deduction, as soon as
practicable after the Expiration Time (as hereinafter defined) and after all
prorations and adjustments have been effected.
(d) A Rights holder may exercise the Oversubscription Privilege to
subscribe for (i) a specified number of shares (subject to the maximum
oversubscription permitted hereby) or (ii) the maximum number of shares to which
it may be entitled to oversubscribe. The Agent shall allot the Excess Shares to
persons properly exercising the Oversubscription Privilege, in the amounts of
the oversubscriptions. If a proration of the Excess Shares (as described in
Section 4(b) hereof) results in a Rights holder receiving fewer shares of Common
Stock than the Rights holder subscribed for pursuant to the Oversubscription
Privilege (or was deemed to have subscribed for pursuant to subsection (c)
above), then the excess funds paid by that Rights holder as the Subscription
Price for shares not issued will be returned by mail as soon as practicable
after the Expiration Time and after all prorations have been effected, without
interest or deduction. The Agent shall notify the Company immediately upon the
completion of the allocation set forth above as to the total number of shares
subscribed and distributable (the "Confirmation Date").
(e) In order to exercise the Oversubscription Privilege, banks,
brokers and other nominee Rights holders that exercise the Oversubscription
Privilege on behalf of beneficial owners of Rights will be required to certify
(a "Nominee Holder Certification") to the Agent and the Company the number of
shares held on the Record Date on behalf of each such beneficial owner of
Rights, the number of Rights as to which the Basic Subscription Privilege has
been exercised on behalf of each such beneficial owner, that each such
beneficial owner's Basic Subscription Privilege held in the same capacity has
been exercised in full and the number of shares of Common Stock subscribed for
pursuant to the Oversubscription Privilege by each such beneficial owner, and to
record certain other information received from each such beneficial owner.
Section 6. Expiration Time; Guaranteed Delivery.
------------------------------------
(a) Rights may be exercised at any time after the date of issuance
of the Subscription Certificates with respect thereto but no later than 5:00
p.m., New York City time on such date as
6
<PAGE>
the Company shall designate to the Agent in writing (which date may be extended
for up to thirty (30) days upon written notice to the Agent by the Company and
the Standby Purchasers) (the "Expiration Time"), after which all unexercised
Rights will be null and void. The Agent shall not honor any purported exercise
of Rights received by the Agent after the Expiration Time, regardless of when
the documents relating to such exercise were transmitted, except when timely
transmitted pursuant to the Guaranteed Delivery Procedures set forth in
subsection (b) below.
(b) Notwithstanding the provisions of this Agreement regarding
delivery of an executed Subscription Certificate to the Agent prior to the
Expiration Time, if a Rights holder wishes to exercise Rights, but time will not
permit such holder to cause the Subscription Certificate or Subscription
Certificates evidencing such Rights to reach the Agent on or prior to the
Expiration Time, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:
(i) such holder has caused payment in full of the Subscription
Price for each share of Common Stock being subscribed for pursuant to the
Basic Subscription Privilege and the Oversubscription Privilege to be
received (in the manner set forth in Section 7(a) hereof) by the Agent on
or prior to the Expiration Time;
(ii) the Agent receives, on or prior to the Expiration Time, a
guarantee notice (a "Notice of Guaranteed Delivery"), substantially in the
form provided with the Instructions for Completing Subscription
Certificates distributed with the Subscription Certificates, from a member
firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc., or from a commercial bank
or trust company having an office or correspondent in the United States
(each, an "Eligible Institution"), stating the name of the exercising
Rights holder, the number of Rights represented by the Subscription
Certificate or Subscription Certificates held by such exercising Rights
holder, the number of shares of Common Stock being subscribed for pursuant
to the Basic Subscription Privilege and the number of shares of Common
Stock, if any, being subscribed for pursuant to the Oversubscription
Privilege, and guaranteeing the delivery to the Agent of any Subscription
Certificate evidencing such Rights within five business days following the
date of the Notice of Guaranteed Delivery; and
7
<PAGE>
(iii) the properly completed Subscription Certificate
evidencing the Rights being exercised, with any required signatures
guaranteed, is received by the Agent within five (5) business days
following the date of the Notice of Guaranteed Delivery relating thereto.
The Notice of Guaranteed Delivery shall be delivered to the Agent in the
same manner as Subscription Certificates at the addresses set forth in or
as otherwise permitted by the Prospectus.
Section 7. Payment; Escrow Account.
-----------------------
(a) Payment of the Subscription Price for all subscribed for shares
of Common Stock shall be payable in United States dollars (i) by check,
certified check or bank draft drawn upon a United States bank or postal,
telegraphic or express money order payable to the order of State Street Bank &
Trust Company, as Agent, or (ii) by wire transfer of funds to the account of the
Agent, as agent for the Company maintained for such purpose as set forth in the
Prospectus. The Subscription Price will be considered to have been paid only
upon (x) clearance of any uncertified check, (y) receipt by the Agent of any
certified check or bank draft drawn upon a United States bank or any postal,
telegraphic or express money order or (z) receipt of collected funds in the
Agent's account designated above, in payment of the Subscription Price.
(b) All funds received by the Agent from the exercise of the Rights
will be held by the Agent, on behalf of the Company, in a segregated, non-
interest bearing account pending disbursement in the manner described in
subsection (c) below.
(c) The Agent shall deliver to the Company (i) all proceeds received
in respect of the exercise of Basic Subscription Rights as promptly as
practicable following the receipt of such proceeds and (ii) all proceeds
received in respect of the exercise of Oversubscription Privileges as promptly
as practicable, but in no event later than three (3) business days after the
Confirmation Date. Proceeds to be returned to Rights holders pursuant to
Sections 5(c) and (d) shall be so returned as set forth in such Sections.
Section 8. No Rights of Stockholders. No Subscription Certificate
-------------------------
shall entitled a Rights holder to vote or receive dividends or be deemed the
holder of shares of Common Stock for any purpose, nor shall anything contained
in any Subscription Certificate be construed to confer upon any Rights holder
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any action by the Company (whether
8
<PAGE>
upon any recapitalization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings of
other action affecting stockholders, or receive dividends or otherwise, until
the Rights evidenced thereby shall have been exercised and the shares of Common
Stock purchasable upon the exercise thereof shall have become deliverable as
provided in this Agreement and in the Prospectus.
Section 9. Delivery of Certificates. The Agent, in its capacity as
------------------------
transfer agent for the Common Stock, shall issue and deliver certificates
representing shares of Common Stock purchased pursuant to exercise of (a) the
Basic Subscription Privilege to subscribers as soon as practicable after the
subscriptions have been accepted by the Subscription Agent and (b) the
Oversubscription Privilege, if any, to subscribers as soon as practicable after
the Expiration Time and after all prorations have been effected. The Agent
shall promptly notify the Company as to the date of delivery of such
certificates. Such certificates for Common Stock purchased pursuant to the
exercise of Rights shall be registered in the names of, and delivered to, the
Rights holders exercising such Rights.
Section 10. Foreign and Certain Other Stockholders. Rights may not
--------------------------------------
be exercised by any person, and neither the Prospectus nor any Subscription
Certificate shall constitute an offer to sell or a solicitation of an offer to
purchase any shares of Common Stock, in any jurisdiction in which such
transactions would be unlawful. The Agent shall reject any subscription
pursuant to the exercise of Rights by Rights holders outside the United States,
if in the opinion of the Company, the Company may not lawfully issue shares to
such Rights holders. The Agent shall not deliver Subscription Certificates,
Prospectuses or any ancillary documents to holders of Common Stock whose
addresses are outside the United States. The Agent shall hold such Subscription
Certificates for the account of such holders and upon notice from such holders
shall exercise the Rights on their behalf. To so exercise such Rights, such
stockholders must notify the Agent and deliver the Subscription Price to the
Agent not later than the Expiration Time. If no instructions and payment have
been received by the Agent prior to the Expiration Time, the Rights will expire
unexercised and be null and void.
Section 11. Reports. The Agent shall notify both the Company and its
-------
designated representatives by telephone on a daily basis during the period
commencing with the mailing of Subscription Certificates and ending at the
Expiration Time (and in the case of deliveries pursuant to the Guaranteed
Delivery
9
<PAGE>
Procedures, the period ending five (5) business days after the Expiration Time),
which notice shall thereafter be confirmed in writing, of (a) the number of
Rights exercised on each day, (b) the number of shares of Common Stock
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege, if any, and the number of such Rights for which
payment has been received, (c) the number of Rights exercised pursuant to the
Guaranteed Delivery Procedures on such day, (d) the number of Rights for which
defective exercises have been received on such day and (e) cumulative totals
derived from the information set forth in clauses (a) through (d) above. At or
before 5:00 p.m. on the third business day following the Expiration Time, the
Agent shall certify in writing to the Company the cumulative totals through the
Expiration Time derived from the information set forth in clauses (a) through
(d) above. The Agent shall also maintain and update a listing of holders who
have fully or partially exercised their Rights and holders who have not
exercised their Rights. The Agent shall provide the Company or its designated
representatives with the information compiled pursuant to this Section 11 as any
of them shall request. The Agent hereby represents and warrants that the
information contained in each notification referred to in this Section 11 shall
be accurate in all material respects.
Section 12. Future Instructions and Interpretation.
--------------------------------------
(a) All questions as to the timeliness, validity, form and
eligibility of any exercise of Rights will be determined by the Company whose
determinations shall be final and binding. The Company, in its sole discretion,
may waive any defect or irregularity, permit a defect or irregularity to be
corrected within such time as it may determine or reject the purported exercise
of any Right. Subscriptions will not be deemed to have been received or
accepted until all irregularities have been waived or cured within such time as
the Company determines in its sole discretion. Neither the Company nor the
Agent shall be under any duty to give notification of any defect or irregularity
in connection with the submission of Subscription Certificates or incur any
liability for failure to give such notification.
(b) The Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
authorized officer of the Company, and to apply to any such officer for advice
or instructions in connection with its duties, and shall be indemnified and not
be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer.
10
<PAGE>
Section 13. Payment of Taxes. The Company covenants and agrees that
----------------
it will pay when due and payable all documentary, stamp and other taxes, if any,
which may be payable in respect of the issuance or delivery of any Subscription
Certificate or of the shares of Common Stock upon exercise of Rights; provided,
--------
however, that the Company shall not be liable for any tax liability arising out
- -------
of any transaction which results in, or is deemed to be, an exchange of Rights
or shares or a constructive dividend with respect to the Rights or shares.
Section 14. Cancellation and Destruction of Subscription
--------------------------------------------
Certificates. All Subscription Certificates surrendered for any reason shall be
canceled by the Agent, and no Subscription Certificate shall be issued in lieu
thereof except as expressly permitted by the provisions of this Agreement. The
Agent shall deliver all canceled Subscription Certificates to the Company, or
shall, at the request of the Company, destroy such canceled Subscription
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 15. Compensation of Agent. The Company shall pay to the
---------------------
Agent compensation in accordance with the schedule of fees attached hereto as
Exhibit C for all services rendered by it hereunder and, from time to time, on
demand of the Agent, its reasonable expenses and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder.
Section 16. Indemnification.
---------------
(a) The Company agrees to indemnify and hold the Agent harmless
against any losses, claims, damages, liabilities, costs or expenses (including
reasonable fees and disbursements of legal counsel) which the Agent may incur or
become subject to arising from or out of any claim or liability resulting from
actions taken as Agent pursuant to this Agreement; provided, however, that such
-------- -------
indemnity does not extend to, and the Agent shall not be indemnified or held
harmless with respect to, such losses, claims, damages, liabilities, costs or
expenses incurred or suffered by the Agent as a result, or arising out, of the
Agent's gross negligence, willful misconduct, bad faith or breach of this
Agreement. In connection therewith, (i) in no case shall the Company be liable
with respect to any claim against the Agent unless the Agent shall have notified
the Company in writing of the assertion of a claim against it or of any action
commenced against it, promptly after the Agent shall have notice of a claim or
shall have been served with the summons or other legal process giving
information as to the nature and basis of the claim, but
11
<PAGE>
failure to so notify the Company shall not relieve the Company from any
liability it may otherwise have pursuant to this paragraph unless the failure to
so notify the Company shall cause the Company to be prejudiced thereby, (ii) the
Company shall be entitled to participate at its own expense in the defense of
any suit brought to enforce any such claim and, if the Company so elects, to
assume the defense of any such suit, in which event the Company shall not be
liable for the fees and expenses of any additional counsel that the Agent may
retain, provided that the Company has acknowledged in writing its obligation to
indemnify the Agent with respect to such suit; and further provided that the
Company shall retain counsel satisfactory to the Agent, in the exercise of the
Agent's reasonable judgment, to defend such suit, and (iii) the Agent agrees not
to settle any litigation in connection with any claim or liability with respect
to which it may seek indemnification from the Company without the prior written
consent of the Company.
(b) The Agent shall be indemnified and shall incur no liability for
or in respect of any action taken, suffered or omitted by it without negligence
and in good faith in connection with is administration of this Agreement in
reliance upon any Subscription Certificate, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document that it reasonably
believes to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper person or persons.
Section 17. Covenants of the Company.
------------------------
(a) The Company covenants that all shares of Common Stock issued
upon exercise of Rights set forth in the Subscription Certificates will be
validly issued, fully paid, nonassessable and free of preemptive rights.
(b) The Company shall furnish to the Agent, upon request, an opinion
of counsel satisfactory to the Agent to the effect that a registration statement
under the Securities Act is then in effect with respect to its shares of Common
Stock issuable upon exercise of the Rights set forth in the Subscription
Certificates. Upon written notice to the Agent that the Commission shall have
issued or threatened to issued any order preventing or suspending the use of the
Prospectus, or if for any reason it shall be necessary to amend or supplement
the Prospectus in order to comply with the Securities Act, the Agent shall cease
acting hereunder until receipt of written instructions from the Company and such
assurances as it may
12
<PAGE>
reasonably request that it may comply with such instruction without violations
of the Securities Act.
Section 18. Successor Agent.
---------------
(a) Any corporation into which the Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Agent, shall be
the successor to the Agent hereunder without the execution or filing of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Agent. In the event that, at the time such successor
to the Agent shall proceed to the agency created by this Agreement, any of the
Subscription Certificates shall have been countersigned but not delivered, any
such successor to the Agent may adopt the countersignature of the original Agent
and deliver such Subscription Certificates so countersigned. In the event at
such time any of the Subscription Certificates shall not have been
countersigned, any successor to the Agent may countersign such Subscription
Certificates either in the name of the predecessor Agent or in the name of the
successor Agent, and in all such events such Subscription Certificates shall
have the full force provided in the Subscription Certificates and in this
Agreement.
(b) In the event at any time the name of the Agent shall be changed
and at such time any of the Subscription Certificates shall have been
countersigned but not delivered, the Agent may adopt the countersignature under
its prior name and deliver Subscription Certificates so countersigned. In the
event at such time any of the Subscription Certificates shall not have been
countersigned, the Agent may countersign such Subscription Certificates either
in its prior name or in its changed name, and in all such events such
Subscription Certificates shall have the full force provided in the Subscription
Certificates and in this Agreement.
Section 19. Conditions to Agent's Obligations. The Agent undertakes
---------------------------------
the duties and obligations imposed by this Agreement upon the following terms
and conditions:
(a) The Agent may consult with legal counsel (who may be, but is not
required to be, legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
13
<PAGE>
(b) Whenever in the performance of its duties under this Agreement
the Agent shall deem it necessary or desirable that any fact or matter be proved
or established by the Company, prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof is
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, President or a
Vice President and by the Secretary or Assistant Secretary or Treasurer or
Assistant Treasurer of the Company and delivered to the Agent, and such
certificate shall be full authorization to the Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Agent shall be liable hereunder only for its own gross
negligence or willful misconduct.
(d) Nothing herein shall preclude the Agent from acting in any other
capacity for the Company or for any other legal entity.
(e) The Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Subscription Certificates or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(f) The Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Agent) or in respect of the validity or execution of any
Subscription Certificate; nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Subscription Certificate; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Common Stock or other securities to be issued pursuant to this Agreement or any
Subscription Certificate or as to whether any shares of Common Stock, or any
shares or similar units of other securities, will, when issued, be validly
authorized and issued, fully paid, and nonassessable.
(g) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Agent for the carrying out or performing by the Agent of the
provisions of this Agreement.
14
<PAGE>
(h) No provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(i) The Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company by registered or
certified mail.
Section 20. Supplements and Amendments. The Agent may, without the
--------------------------
consent or concurrence of the stockholders in whose names Subscription
Certificates are registered, by supplemental agreement or otherwise, concur with
the Company in making any changes or corrections in this Agreement or in a
Subscription Certificate that is appropriate to cure any ambiguity or to correct
any defective or inconsistent provision or clerical omission or mistake or
manifest error therein or herein contained, and which shall not be inconsistent
with the provisions of the Subscription Certificate except insofar as any such
change may confer additional rights upon the Rights holders.
Section 21. Tax Matters.
-----------
(a) The Agent shall comply with the information reporting and backup
withholding requirements of the Internal Revenue Code of 1986, as amended, (the
"Code"), including, without limitation, where appropriate, on a timely basis,
filing with the Internal Revenue Service and furnishing to Rights holders duly
completed Forms 1099B and 1099DIV. The Agent shall also collect and duly
preserve Forms W-8 and W-9 and other forms or information necessary to comply
with the backup withholding requirements of the Code.
(b) The Agent shall withhold from payments made to Rights holders
amounts sufficient to comply with the backup withholding requirements of the
Code.
Section 22. Notices. All notices and other communications provided
-------
for or permitted hereunder shall be made by hand delivery, prepaid first class
mail or telecopier:
15
<PAGE>
(a) If to the Company, to:
Hurco Companies, Inc.
One Technology Way
Indianapolis, Indiana 46268
Attention: Mr. Roger Wolf
Telecopier: (317) 328-2811
(b) If to the Agent, to:
State Street Bank and Trust Company
c/o Boston Equiserve
150 Royall Street
Canton, Massachusetts 02021
Attention: Michael Manahan
Telecopier: (617) 575-2213
(c) If to a Rights holder, to the address shown on the registry
books of the Company.
All such notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed as aforesaid; when receipt is
acknowledged, if telecopied.
Section 23. Assignment.
----------
(a) Except as provided in subsection (c) below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective permitted successors and assigns.
(c) The Agent may, without further consent on the part of the
Company, subcontract for the performance hereof with (i) Boston Equiserve
Limited Partnership, a Delaware limited partnership, which is duly registered as
a transfer agent pursuant to Section 17(c)(2) of the Securities Exchange Act of
1934, or (ii) the current third party vendor utilized by Boston Equiserve
Limited Partnership; provided, however, that the Agent shall be as fully
-------- -------
responsible to the Company for the acts and omissions of any subcontractor as it
is for its own acts and omissions.
Section 24. Benefits of This Agreement. Nothing in this Agreement
--------------------------
shall be construed to give any person or
16
<PAGE>
corporation other than the Company, the Agent and the holders of the
Subscription Certificates any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Agent and the holders of the Subscription Certificates.
Section 25. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts.
Section 26. General.
-------
(a) The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning of this Agreement.
(b) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which, when taken
together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
HURCO COMPANIES, INC.
By: /s/ Roger Wolf
----------------------------
Name: Roger Wolf
Title: Senior Vice President
and Treasurer
STATE STREET BANK AND TRUST COMPANY, as Agent
By: /s/ Ronald Logue
----------------------------
Name: Ronald Logue
Title: Executive Vice President
17
<PAGE>
EXHIBIT A
---------
[FORM OF SUBSCRIPTION CERTIFICATE]
SUBSCRIPTION CERTIFICATE NUMBER:
NUMBER OF RIGHTS:
EXPIRATION DATE: JULY 3, 1996, unless extended
HURCO COMPANIES, INC.
SUBSCRIPTION RIGHT FOR SHARES OF COMMON STOCK
SUBSCRIPTION PRICE: $4.63 PER SHARE
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
COMPANY'S PROSPECTUS DATED JUNE 6, 1996 (THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON
REQUEST FROM GEORGESON & COMPANY INC. (THE "INFORMATION AGENT") AT WALL STREET
PLAZA, NEW YORK, NEW YORK 10005 (TOLL-FREE (800) 223-2064). CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED
TO SUCH TERMS IN THE PROSPECTUS.
THIS SUBSCRIPTION CERTIFICATE (THE "SUBSCRIPTION CERTIFICATE") OR A NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY STATE STREET BANK & TRUST COMPANY
("THE SUBSCRIPTION AGENT") WITH PAYMENT IN FULL BY 5:00 P.M., NEW YORK CITY
TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO THIRTY (30) DAYS BY THE
COMPANY AT THE REQUEST OF THE STANDBY PURCHASERS (THE "EXPIRATION TIME").
THE RIGHTS REPRESENTED BY THIS SUBSCRIPTION CERTIFICATE, IN WHOLE OR IN
PART, MAY BE EXERCISED BY DULY COMPLETING AND SIGNING THE EXERCISE FORM.
RIGHTS HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
PROSPECTUS AND INSTRUCTIONS FOR COMPLETING SUBSCRIPTION CERTIFICATES,
ADDITIONAL COPIES OF WHICH ARE AVAILABLE FROM THE SUBSCRIPTION AGENT. AN
EXERCISE OF RIGHTS EVIDENCED HEREBY IS IRREVOCABLE.
This nontransferable Subscription Certificate represents the number of
Rights set forth above. The registered holder whose name is inscribed hereon
(the "Holder") is entitled to subscribe for and purchase from Hurco Companies,
Inc. (the "Company"), at the Subscription Price, one (1) share of common
stock, no par value (the "Common Stock"), of Hurco Companies, Inc. (the
"Company") for each whole Right evidenced hereby upon the terms and subject to
the conditions set forth in the Prospectus and the Instructions for Completing
Subscription Certificates. Common Stock subscribed for pursuant to exercise of
the Basic Subscription Privilege shall be delivered as soon as practicable
after the subscriptions have been accepted by the Subscription Agent. This
Subscription Certificate also evidences the right of the Holder to subscribe
for additional shares of Common Stock, subject to proration and to the
conditions set forth herein and in the Prospectus. Common Stock subscribed for
pursuant to the Oversubscription Privilege shall be delivered as soon as
practicable after the Expiration Time and after all prorations have been
effected.
Dated: June 6, 1996
/s/ Roger J. Wolf /s/ Brian D. McLaughlin
Secretary President
<PAGE>
EXHIBIT B
---------
Form of Instructions for Completing Subscription Certificates
IMPORTANT: PLEASE READ ALL INSTRUCTIONS CERTIFICATE CAREFULLY.
EXERCISE FORM
The undersigned hereby irrevocably exercises one or more Rights to subscribe
for share of Common Stock as indicated below, on the terms and subject to the
conditions specified in the Prospectus, receipt of which is hereby
acknowledged.
(a) Number of shares subscribed for pursuant to the Basic Subscription
Privilege: (a)__________
(b) Number of shares subscribed for pursuant to the Oversubscription
Privilege:/1/ (b)__________
(c) Total shares (sum of lines (a) and (b)): (c)__________
(d) Total Subscription Price (total number of shares subscribed for pursuant
to both the Basic Subscription Privilege and the Oversubscription
Privilege multiplied by the Subscription Price of $______:/2/ (d)__________
(e) Method of Payment (check and complete appropriate box(es)):
[_] Uncertified, certified or cashier's check, bank draft or money order in the
amount of $______ payable to State Street Bank & Trust Company, subscription
agent.
[_] Wire transfer in the amount of $______ directed to State Street Bank & Trust
Company, subscription agent, ABA No. 0110-0002-8, Hurco Companies, Inc.
Rights Offering DDA No.: 7608-355-9, Attention: BFDS CST REORG/HRCCM.
Indicate name of institution wire transferring funds and name of registered
holder: ____________________________________________________________________
(f) Notice of Guaranteed Delivery. Check the box below if Rights are being
exercised pursuant to a Notice of Guaranteed Delivery delivered to the
Subscription Agent prior to the date hereof and complete the
following: [_]
Name(s) of Registered holder _________________
Window Ticket Number (if any) ________________
Date of Execution of Notice of Guaranteed
Delivery ______________________________ , 1996
Name of Eligible Institution which Guaranteed
Delivery _____________________________________
Telephone Number _____________________________
IMPORTANT: RIGHTS HOLDERS SIGN BELOW.
THE EXERCISE OF YOUR RIGHTS WILL NOT BE VALID UNLESS YOU SIGN BELOW.
__________________________________________
(Signature(s) of Registered
holder(s))
Dated:__________, 1996
Must be signed by the registered holder(s) as name(s) appear(s) on this
Subscription Certificate. If signature is by trustee(s), executor(s),
administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a
corporation or another acting in a fiduciary or representative capacity,
please provide the following information. See Instructions for Completing
Subscription Certificates. Please print.
Name: ____________________________________
Capacity (full title): ___________________
Address (including zip code): ____________
__________________________________________
Home Telephone Number (including area code): __________________
Business Telephone Number (including area code): ______________
Tax Identification or Social Security Number: _________________
- --------
1. To exercise the Oversubscription Privilege, the undersigned must fully
exercise the Basic Subscription Privilege. The maximum number of shares
that may be subscribed for pursuant to the Oversubscription Privilege is
1,085,296.
2. If the aggregate Subscription Price paid by an exercising Rights holder is
insufficient to purchase the number of shares of Common Stock that such
holder indicates are being subscribed for, or if any exercising Rights
holder does not specify the number of shares of Common Stock to be
purchased, then such Rights holder will be deemed to have exercised first
the Basic Subscription Privilege in full and second the Oversubscription
Privilege to purchase shares of Common Stock to the full extent of the
payment rendered (subject to the limitation on the maximum number of shares
permitted and to proration under certain circumstances as described in the
Prospectus). If the aggregate Subscription Price paid by an exercising
Rights holder exceeds the amount necessary to purchase the number of shares
of Common Stock for which the Rights holder has indicated an intention to
subscribe, then the Rights holder will be deemed to have exercised first
the Basic Subscription Privilege (if not already fully exercised) and
second the Oversubscription Privilege to the full extent of the excess
payment tendered (subject to the restrictions described above). Any excess
funds received in payment of the Subscription Price for shares that are
subscribed for by a Rights holder but not allocated to such Rights holder
pursuant to the Oversubscription Privilege will be mailed by the
Subscription Agent as soon as practicable after the Expiration Time and
after all prorations and adjustments as described in the Prospectus have
been effected.
2
<PAGE>
EXHIBIT C
---------
Fee Schedule
Assumptions:
- -----------
Record Date Registered Holders 676 Broker Splits 150
Participation Level 300 Guaranties 30
DRP Participation Level 0 Soliciting Brokers 0
Certificated Participation 150
Cost Per Unit Estimated Cost
------------- --------------
Administration Fee $5,000 $5,000
Subscription Form Generation $1.50 $1,014.00
Subscription Form Processing $9.00 $2,700.00
Sale of Rights $0.00 $0.00
Broker Split Processing $9.00 $1,350.00
Guaranty of Delivery $6.00 $180.00
Subsequent Cash $3.00 $0.00
Calculation of Broker Commission $4.00 $0.00
Total $10,244.00
Minimum Offering Total $10,000.00
Out of Pocket Estimates:
- -----------------------
Envelope/Form Type Number
Needed Cost per Item Total
------ ------------- -----
9 x 12 Envelope 676 $0.2919 $197.30
Return Envelope 676 $0.0775 $52.36
Confirmation Envelope 300 $0.0287 $8.61
Certificate Envelopes 150 $0.3300 $49.50
DRP confirmation Env. 0 $0.0314 $0.00
Postage Outgoing 676 $1.0000 $676.00
Return Envelope 150 $0.3100 $46.50
Refund Check Postage 0 $0.3200 $0.00
Certificate Postage 150 $0.3200 $48.00
DRP confirm. postage 0 $0.3200 $0.00
Refund Check Form 0 $0.0450 $0.00
DRO Confirm Form 0 $0.300 $0.00
Total $1,078.28
20
<PAGE>
HURCO COMPANIES, INC.
ONE TECHNOLOGY WAY
INDIANA, INDIANAPOLIS 46268
(317) 293-5309
June 6, 1996
To Our Shareholders:
Hurco Companies, Inc. is distributing to the holders of its outstanding
Common Stock, at no cost, non- transferable Rights to purchase additional
shares of Common Stock in a Rights Offering. Shareholders will receive .20 of
a Right for each share of Common Stock held by them as of the close of
business on June 5, 1996. Holders of Rights will be entitled, upon payment of
$4.63 in cash, to purchase one share of Common Stock for each whole Right
held. The number of Rights distributed to each holder of Common Stock will be
rounded up to the nearest whole number and no fractional Rights or cash in
lieu thereof will be issued or paid.
Enclosed herewith are copies of the following documents:
1. The Prospectus, which contains important details of the Rights
Offering and important information concerning the Company and the Common
Stock being offered--please read the Prospectus carefully;
2. A Subscription Certificate evidencing your Rights;
3. The Instructions for Completing Subscription Certificates;
4. Notice of Guaranteed Delivery; and
5. A return envelope addressed to State Street Bank & Trust Company,
Subscription Agent.
YOUR PROMPT ACTION IS REQUESTED. THE RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO THIRTY (30) DAYS BY
THE COMPANY.
To exercise the Rights, properly completed and executed Subscription
Certificates (unless the guaranteed delivery procedures are complied with) and
payment in full for all Rights exercised must be delivered to the Subscription
Agent as indicated in the Prospectus prior to 5:00 p.m., New York City time,
on July 3, 1996.
Additional copies of the enclosed materials may be obtained from Georgeson &
Company Inc., the Information Agent. The Information Agent's toll-free
telephone number is (800) 223-2064.
Very truly yours,
HURCO COMPANIES, INC.
<PAGE>
1,085,296 SHARES OF COMMON STOCK
OFFERED PURSUANT TO RIGHTS
DISTRIBUTED TO SHAREHOLDERS OF
HURCO COMPANIES, INC.
June 6, 1996
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing the materials listed below in connection with the offering
by Hurco Companies, Inc. (the "Company") of 1,085,296 shares of common stock,
no par value (the "Common Stock"), of the Company, at a subscription price of
$4.63 per share, pursuant to nontransferable subscription rights (the
"Rights") distributed to holders of record of Common Stock as of the close of
business on June 5, 1996 (the "Record Date"). The Rights are described in the
Prospectus and evidenced by a Subscription Certificate registered in your name
or the name of your nominee.
Each beneficial owner of Common Stock registered in your name or the name of
your nominee is entitled to .20 of a Right for each share of Common Stock
owned by such beneficial owner. No fractional Rights or cash in lieu thereof
will be issued or paid.
We are asking you to contact your clients for whom you hold Common Stock
registered in your name or in the name of your nominee to obtain instructions
with respect to the Rights.
Enclosed are copies of the following documents:
1. The Prospectus;
2. Subscription Certificate(s) evidencing Rights;
3. The Instructions for Completing Subscription Certificates;
4. A form of letter which may be sent to your clients for whose accounts
you hold Common Stock registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regards to the Rights;
5. Notice of Guaranteed Delivery;
6. A return envelope addressed to State Street Bank & Trust Company,
Subscription Agent;
7. A DTC Participant Oversubscription Form; and
8. Nominee Holder Certification.
YOUR PROMPT ACTION IS REQUESTED. THE RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO THIRTY (30) DAYS BY
THE COMPANY.
To exercise the Rights, properly completed and executed Subscription
Certificates (unless the guaranteed delivery procedures are complied with) and
payment in full for all Rights exercised must be delivered to the Subscription
Agent as indicated in the Prospectus prior to 5:00 p.m., New York City time,
on July 3, 1996.
Additional copies of the enclosed materials, as well as the certification
needed to round up fractional shares, may be obtained from Georgeson & Company
Inc., the Information Agent. The Information Agent's toll-free telephone
number is (800) 223-2064.
Very truly yours,
HURCO COMPANIES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF HURCO COMPANIES, INC., THE DEPOSITORY TRUST
COMPANY, THE INFORMATION AGENT OR THE SUBSCRIPTION AGENT, OR ANY OTHER PERSON
MAKING OR DEEMED MAKING OFFERS OF THE COMMON STOCK ISSUABLE UPON VALID
EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFERING EXCEPT FOR
STATEMENTS MADE IN THE PROSPECTUS.
<PAGE>
1,085,296 SHARES OF COMMON STOCK
OFFERED PURSUANT TO RIGHTS
DISTRIBUTED TO SHAREHOLDERS OF
HURCO COMPANIES, INC.
June 6, 1996
To Our Clients:
Enclosed for your consideration is a Prospectus, dated June 6, 1996, and the
Instructions for Completing Subscription Certificates relating to the offer by
Hurco Companies, Inc. (the "Company") of 1,085,296 shares of common stock, no
par value (the "Common Stock"), of the Company, at a subscription price of
$4.63 per share, pursuant to nontransferable subscription rights (the
"Rights") distributed to holders of record of Common Stock as of the close of
business on June 5, 1996 (the "Record Date").
As described in the accompanying Prospectus, you will receive .20 of a
nontransferable Right for each share of Common Stock carried by us in your
account as of the Record Date. Each whole Right will entitle you to subscribe
for one share of Common Stock (the "Basic Subscription Privilege") at a
subscription price of $4.63 per share (the "Subscription Price"). In addition,
if you elect to exercise the Basic Subscription Privilege in full, you will
also be entitled to subscribe, subject to proration, for up to 1,085,296
additional shares of Common Stock at the Subscription Price (the
"Oversubscription Privilege"). Brynwood Partners Limited Partnership
("Brynwood I"), the holder of 1,390,001 shares of Common Stock, has advised
the Company that it does not intend to exercise any of its Rights. In lieu
thereof, Brynwood Partners II L.P. ("Brynwood II"), an affiliate of Brynwood
I, has agreed to purchase from the Company and the Company has agreed to sell
to Brynwood II, at the Subscription Price, all of the 278,001 shares that
otherwise would have been available for purchase by Brynwood I pursuant to
exercise of its Basic Subscription Privilege. If the number of shares of
Common Stock available (the "Excess Shares") after (i) the sale to Brynwood II
of the shares that otherwise could have been purchased by Brynwood I and (ii)
the satisfaction of all subscriptions pursuant to exercise of the Basic
Subscription Privilege by stockholders other than Brynwood I is insufficient
to satisfy in full all elections to exercise the Oversubscription Privilege,
the Excess Shares will be allocated among holders who have exercised their
Oversubscription Privilege, pro rata, in the same ratio that the number of
shares subscribed for by each such holder pursuant to exercise of the
Oversubscription Privilege bears to the total number of shares subscribed for
by all such holders pursuant to exercise of the Oversubscription Privilege. No
fractional shares will be issued.
THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF
COMMON STOCK CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME.
EXERCISE OF RIGHTS MAY BE MADE BY ONLY US AS THE RECORD OWNER AND PURSUANT TO
YOUR INSTRUCTIONS. Accordingly, we request instructions as to whether you wish
us to elect to subscribe for any shares of Common Stock to which you are
entitled pursuant to the terms and subject to the conditions set forth in the
enclosed Prospectus and the related Instructions for Completing Subscription
Certificates. However, we urge you to read these documents carefully before
instructing us to exercise Rights.
YOUR INSTRUCTIONS SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER TO
PERMIT US TO EXERCISE RIGHTS ON YOUR BEHALF IN ACCORDANCE WITH THE PROVISIONS
OF THE RIGHTS OFFERING. THE RIGHTS OFFERING WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO THIRTY (30) DAYS BY THE
COMPANY. ONCE YOU HAVE EXERCISED A RIGHT, SUCH EXERCISE MAY NOT BE REVOKED.
<PAGE>
If you wish to have us, on your behalf, exercise the Rights for any shares
of Common Stock, please so instruct us by completing, executing and returning
to us the instructions form on the reverse side of this letter.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE OFFERING SHOULD BE
DIRECTED TO GEORGESON & COMPANY INC., THE INFORMATION AGENT, AT THE FOLLOWING
TOLL-FREE TELEPHONE NUMBER: (800) 223-2064.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
materials referred to therein relating to the offering of shares of common
stock, no par value (the "Common Stock"), of Hurco Companies, Inc. (the
"Company").
This will instruct you whether to exercise Rights to purchase shares of
Common Stock distributed with respect to the Company's Common Stock held by
you for the account of the undersigned, pursuant to the terms and subject to
the conditions set forth in the Prospectus and the related Instructions for
Completing Subscription Certificates.
Box 1. [_] Please DO NOT EXERCISE RIGHTS for shares of Common Stock.
Box 2. [_] Please EXERCISE RIGHTS for shares of Common Stock as set forth
below.
(a) Number of shares subscribed for pursuant to the Basic Subscription
Privilege: (a)__________
(b) Number of shares subscribed for pursuant to the Oversubscription
Privilege:/1/ (b)________
(c) Total shares (sum of lines (a) and (b)): (c)________
(d) Total Subscription Price (total number of shares subscribed for
pursuant to both the Basic Subscription Privilege and the
Oversubscription Privilege multiplied by the Subscription Price of
$:___:/2/ (d)_______
- --------
1. To exercise the Oversubscription Privilege, the undersigned must fully
exercise the Basic Subscription Privilege. The maximum number of shares that
may be subscribed for pursuant to the Oversubscription Privilege is 1,085,296.
2. If the aggregate Subscription Price paid by an exercising Rights holder
is insufficient to purchase the number of shares of Common Stock that such
holder indicates are being subscribed for, or if any exercising Rights holder
does not specify the number of shares of Common Stock to be purchased, then
such Rights holder will be deemed to have exercised first the Basic
Subscription Privilege in full and second the Oversubscription Privilege to
purchase shares of Common Stock to the full extent of the payment rendered
(subject to the limitation on the maximum number of shares permitted and to
proration under certain circumstances as described in the Prospectus). If the
aggregate Subscription Price paid by an exercising Rights holder exceeds the
amount necessary to purchase the number of shares of Common Stock for which
the Rights holder has indicated an intention to subscribe, then the Rights
holder will be deemed to have exercised first the Basic Subscription Privilege
(if not already fully exercised) and second the Oversubscription Privilege to
the full extent of the excess payment tendered (subject to the restrictions
described above). Any excess funds received in payment of the Subscription
Price for shares that are subscribed for by a Rights holder but not allocated
to such Rights holder pursuant to the Oversubscription Privilege will be
mailed by the Subscription Agent as soon as practicable after the Expiration
Time and after all prorations and adjustments as described in the Prospectus
have been effected.
(e) Method of Payment (check and complete appropriate box(es)):
[_] Enclosing uncertified, certified or cashier's check, bank draft or money
order in the amount of $ payable to State Street Bank & Trust
Company, subscription agent.
2
<PAGE>
[_]Wire transfer in the amount of $ directed to State Street Bank &
Trust Company, subscription agent, ABA No. 0110-0002-8, Hurco Companies,
Inc. Rights Offering DDA No.: 7608-355-9, Attention: BFDS CST
REORG/HRCCM. Indicate name of institution wire transferring funds and
name of registered holder: ______________________________________________
[_]Please deduct payment from the following account maintained by you as
follows:
Type of Account:
Account No.:
Amount to be deducted: $
Date: , 1996
_____________________________________
Signature(s)
_____________________________________
Please print or type name
3
<PAGE>
HURCO COMPANIES, INC.
RIGHTS OFFERING
DTC PARTICIPANT OVERSUBSCRIPTION EXERCISE FORM
THIS FORM IS TO BE USED ONLY BY DEPOSITORY TRUST COMPANY PARTICIPANTS TO
EXERCISE THE OVERSUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO
WHICH THE BASIC SUBSCRIPTION PRIVILEGE WAS EXERCISED AND DELIVERED THROUGH THE
FACILITIES OF THE DEPOSITORY TRUST COMPANY. ALL OTHER EXERCISES OF
OVERSUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF SUBSCRIPTION
CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
COMPANY'S PROSPECTUS DATED JUNE 6, 1996 (THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON
REQUEST FROM THE INFORMATION AGENT, GEORGESON & COMPANY INC., BY CALLING
(TOLL-FREE) (800) 223-2064.
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY
5:00 P.M., NEW YORK CITY TIME, ON JULY 3, 1996, UNLESS EXTENDED FOR UP TO
THIRTY (30) DAYS BY THE COMPANY.
1. The undersigned hereby certifies to the Company and the Subscription
Agent that it is a participant in The Depository Trust Company ("DTC") and
that it has either (i) exercised in full the Basic Subscription Privilege in
respect of Rights and delivered such exercised Rights to the Subscription
Agent by means of transfer to the DTC account of the Subscription Agent or
(ii) delivered to the Subscription Agent a Notice of Guaranteed Delivery in
respect of the exercise in full of the Basic Subscription Privilege and will
deliver Rights called for in such Notice of Guaranteed Delivery to the
Subscription Agent by means of transfer to such DTC account of the
Subscription Agent.
2. The undersigned hereby exercises the Oversubscription Privilege to
purchase, to the extent available, shares of Common Stock and certifies
to the Company and the Subscription Agent that such Oversubscription Privilege
is being exercised for the account or accounts of persons (which may include
the undersigned) on each of whose behalf the Basic Subscription Privilege has
been fully exercised.
3. The undersigned understands that payment of the Subscription Price of
$4.63 per share of each share of Common Stock subscribed for pursuant to the
Oversubscription Privilege must be received by the Subscription Agent at or
before 5:00 p.m., New York City time, on July 3, 1996 and represents that such
payment, in the aggregate amount of $ , either (check appropriate box):
[_]has been or is being delivered to the Subscription Agent pursuant to the
Notice of Guaranteed Delivery referred to above;
[_]is being delivered to the Subscription Agent herewith;
[_]has been delivered separately to the Subscription Agent herewith;
<PAGE>
and, in the case of funds not delivered pursuant to a Notice of Guaranteed
Delivery, is or was delivered in the manner set forth below (check
appropriate box and complete information relating thereto):
[_]wire transfer of funds
--name of transferor institution: ______________________________________
--date of transfer: ____________________________________________________
--confirmation number (if available): __________________________________
[_]uncertified check
[_]certified check
[_]bank draft (cashier's check)
[_]money order
Basic Subscription Confirmation
Number:
DTC Participant Number:
Name of DTC Participant:
By: _________________________________
Name:
Title:
Dated: , 1996
PARTICIPANTS EXERCISING THE OVERSUBSCRIPTION PRIVILEGE PURSUANT HERETO MUST
SEPARATELY SUBMIT A NOMINEE HOLDER CERTIFICATION TO THE SUBSCRIPTION AGENT.
2
<PAGE>
HURCO COMPANIES, INC.
NOMINEE HOLDER CERTIFICATION
The undersigned, a bank, broker or other nominee holder of Rights ("Rights")
to purchase shares of common stock, no par value (the "Common Stock"), of
Hurco Companies, Inc. (the "Company") pursuant to the Rights Offering
described and provided for in the Company's Prospectus dated June 6, 1996,
(the "Prospectus"), hereby certifies to the Company and to State Street Bank &
Trust Company, as Subscription Agent for such Rights Offering, that the
undersigned has exercised, on behalf of the beneficial owners thereof (which
may include the undersigned), the number of Rights specified below pursuant to
the Basic Subscription Privilege (as described in the Prospectus) and such
beneficial owners thereof wish to subscribe for the purchase of that number of
additional shares of Common Stock specified below pursuant to the
Oversubscription Privilege (as described and limited in the Prospectus),
listing separately below each such Basic Subscription and the corresponding
Oversubscription (without identifying any such beneficial owner):
<TABLE>
<CAPTION>
NUMBER OF SHARES PURCHASE NUMBER OF SHARES PURCHASED
PURSUANT TO EXERCISE OF PURSUANT TO EXERCISE OF
BASIC SUBSCRIPTION PRIVILEGE OVERSUBSCRIPTION PRIVILEGE RIGHTS CERTIFICATE NUMBER
- -------------------------------------------------------------------------------------
<S> <C> <C>
1.
- -------------------------------------------------------------------------------------
2.
- -------------------------------------------------------------------------------------
3.
- -------------------------------------------------------------------------------------
4.
- -------------------------------------------------------------------------------------
5.
- -------------------------------------------------------------------------------------
6.
- -------------------------------------------------------------------------------------
7.
- -------------------------------------------------------------------------------------
8.
- -------------------------------------------------------------------------------------
9.
- -------------------------------------------------------------------------------------
10.
</TABLE>
(Attach additional beneficial owner list if necessary)
Name of Nominee Holder
Address
By:
(Please Print Name)
(Title)
(Date)
Provide the following information if applicable:
Depository Trust Company ("DTC") Participant Number:
DTC Basic Subscription Confirmation Number(s):
Date: , 1996
<PAGE>
SPECIAL NOTICE TO HOLDERS OF
HURCO COMPANIES, INC.
COMMON STOCK
WHOSE ADDRESSES ARE OUTSIDE
THE UNITED STATES
Dear Shareholder:
Enclosed you will find materials relating to the Rights Offering of Hurco
Companies, Inc. (the "Company"). Holders of Common Stock at the close of
business on June 5, 1996, (the "Record Date") will receive nontransferable
rights ("Rights") to subscribe for and purchase shares of Common Stock on the
basis of .20 of a Right for each share of Common Stock held of record on the
Record Date. A Subscription Certificate representing Rights to subscribe for
shares of the Company's Common Stock at $4.63 per share is not included in
this mailing, but instead is being held on your behalf by the Subscription
Agent, State Street Bank & Trust Company. If you wish to exercise any or all
of these Rights, you must so instruct the Subscription Agent in the manner
described in the accompanying Prospectus and Instructions for Completing
Subscription Certificates by 5:00 p.m., New York time, on July 3, 1996, unless
the Offering is extended for up to thirty (30) days by the Company. Rights not
exercised by such time will expire and become null and void.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE OFFERING SHOULD BE
DIRECTED TO GEORGESON & COMPANY INC., THE INFORMATION AGENT, AT (800) 223-
2064.
