Rule 424(b)
File No. 333-3350
PROSPECTUS
96,509 Shares
EIS INTERNATIONAL, INC.
Common Stock
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This Prospectus covers the resale of 96,509 shares of Common Stock of EIS
International, Inc. ("EIS" or the "Company") by certain stockholders of the
Company (the "Selling Stockholders"). See "Selling Stockholders." The shares of
Common Stock covered by this Prospectus were issued or are issuable to the
Selling Stockholders upon exercise of certain warrants of Cybernetics Systems
International Corp. ("Cybernetics") that were assumed by the Company pursuant to
its acquisition of Cybernetics in a transaction completed on March 1, 1996. All
of the shares offered hereunder are to be sold by the Selling Stockholders. The
Company will not receive any of the proceeds from the sale of the shares by the
Selling Stockholders.
The Selling Stockholders may from time to time sell the shares covered by
this Prospectus on the Nasdaq Stock Market in ordinary brokerage transactions,
in negotiated transactions, or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. See "Plan of Distribution."
The Common Stock is quoted on the Nasdaq Stock Market under the symbol
EISI. See "Price Range of Common Stock and Dividend Policy."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 16, 1996
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AVAILABLE INFORMATION
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 reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such documents can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices: Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
copies of such material may be obtained from the Commission's public reference
section at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Common Stock is traded on the Nasdaq National Market. Reports and other
information concerning the Company may be inspected at the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and its
Common Stock, reference is hereby made to such Registration Statement, exhibits
and schedules. Statements contained in this Prospectus as to the contents of any
contract or any other document are not necessarily complete, and in each
instance reference is hereby made to the copy of such contract or document (if
any) filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. The Registration Statement
and the exhibits and schedules thereto may be examined without charge at the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and copies of all or any part thereof may be obtained
from the Commission upon payment of prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. The Company's Current Report on Form 8-K dated February 8, 1996;
3. The Company's Current Report on Form 8-K dated March 1, 1996;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996; and
5. The description of the Company's capital stock contained in EIS's
Registration Statement on Form 8-A dated June 22, 1992.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to May
16, 1996 and prior to the termination of the offering of the Common Stock
registered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
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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 which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any 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 provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the foregoing documents incorporated by reference
into this Prospectus (without exhibits to such documents other than
exhibits specifically incorporated by reference into such documents).
Requests for such copies should be directed to the Investor Relations
Department of the Company, 1351 Washington Boulevard, Stamford, Connecticut
06902; telephone (203) 351-4800.
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information and
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered securities to which it
relates. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful.
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The Company
EIS International, Inc. (the "Company" or "EIS") designs, manufactures,
markets and supports full-featured call center management systems for businesses
that use the telephone in organized campaigns to reach large target audiences.
These systems are used in a broad range of business-to-consumer and business-to-
business direct marketing applications including direct sales, fundraising,
market research, and customer service; for telephone credit and collections
activities, as well as for the integration of inbound and outbound call center
activities. EIS is one of the world's largest suppliers of call center
technology and is the industry's leading provider of outbound call center
systems.
EIS customers include many telemarketing service bureaus, financial
institutions, major telecommunications companies, universities, cable operators,
direct response marketers and publishing companies, among others.
EIS systems employ computer telephony integration ("CTI") technology to add
efficiency to the management of call centers and substantially increase the
productivity of telephone agents engaged in calling campaigns. Systems software
features provide for outbound intelligent/predictive dialing, database and
calling list management, scripting, real-time and historical reporting, and the
integration of the EIS software with the customers' computer and telephone
systems. Through the use of the Company's state-of-the-art dialing technology
which includes high speed call switching and patented voice detection
technology, sophisticated pacing algorithms and call classification, EIS systems
increase the time agents have available to speak with called parties as
non-productive activities are automated, leaving the agent free to spend 45-50
minutes per hour in talk time compared to 15-20 minutes in a non-automated
environment. The systems automate the management of the calling list, including
campaign list segmentation, time zone controls and callback handling. The
systems include multi-page scripting capabilities that allow for conversation
branching and for account history, product information, order forms and
calculations to be presented to the agent on-line. In addition, reporting and
agent monitoring capabilities allow supervisors and managers to track up-to-the-
minute activities in the call center so that they can modify and improve the
effectiveness of the campaign in real-time.
EIS' systems are based on an open-architecture design to allow them to
interface with a variety of third party switches and software products and to
integrate easily with customers' host computers and databases. Systems are
designed to be modular, expandable and flexible to respond to the customers
changing environment and expansion needs.
EIS' systems include the EIS Call Processing System , a full-featured
solution for outbound call centers involved predominantly in direct marketing
activities; OCM Gold , a product licensed from AT&T in 1991 and enhanced to work
seamlessly with the AT&T Definity G3 switching platform; System 7000 , the
system acquired in the merger with International Telesystems Corporation in 1993
and directed at the credit and collections market, and Centenium, a powerful
client server solution for corporate call centers. The Company also markets
SmartAgent Manager , a systems enhancement that blends outbound campaigns with
inbound number operations, and Star Trainer , an interactive call simulation
training system. Star Trainer is a trademark of Advertech, Ltd.
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EIS acquired Surefind Information, Inc. ("Surefind") by merging Surefind
into a subsidiary of EIS on February 29, 1996. Pursuant to the merger, EIS
agreed to issue up to a total of approximately 549,577 shares of EIS' Common
Stock in exchange for all outstanding shares of Surefind stock including options
and warrants to purchase up to 48,173 shares of Surefind stock. The merger will
be accounted for as a pooling-of-interests. Surefind is engaged in marketing a
technology service that is designed to automatically back up, transmit, store,
and recover data from local area networks ("LANs") and personal computers at a
remote, secure location.
EIS acquired Cybernetics Systems International Corp. ("Cybernetics") on
March 1, 1996, by a merger of Cybernetics with and into EIS-CSI Corp., a wholly-
owned subsidiary of EIS (the "Merger"), whereby Cybernetics became a
wholly-owned subsidiary of EIS. In payment of the purchase price for this
acquisition, EIS issued to certain stockholders of Cybernetics a total of
494,660 shares of its common stock (of which 47,647 shares were placed in escrow
to secure indemnification obligations of Cybernetics stockholders). EIS also
paid to certain stockholders cash in an aggregate amount of approximately
$9,266,000 (of which approximately $713,000 was placed in escrow to secure
indemnification obligations of certain Cybernetics stockholders). EIS also
assumed certain obligations of Cybernetics, including its obligations under its
employee stock option plan and to certain holders of warrants to purchase
Cybernetics Common Stock. Cybernetics specializes in "Computerized Workforce
Management Systems", a family of software products that assist Fortune 1000
companies in managing the workforce in their Call Centers.
EIS is a Delaware corporation organized in 1988. It is the successor by
merger to a Connecticut corporation founded in 1980 to engage in software
consulting. The Company sold its first commercial call center system in 1989 and
became a publicly traded company in July of 1992. EIS' headquarters are located
at 1351 Washington Boulevard, Stamford, Connecticut 06902. Its telephone number
at that location is (203) 351-4800. EIS operates its National Service Center in
Herndon, Virginia, and has facilities in Pittsburgh, Pennsylvania and Miami,
Florida.
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RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by potential investors in evaluating an
investment in the Common Stock offered hereby.
Fluctuations in Quarterly Operating Results. Although EIS has demonstrated
consistent financial performance, a variety of factors influence the level of
EIS's net sales in a particular quarter, including general economic conditions
in the call processing industry, the timing of significant orders, shipment
delays, specific feature requests by customers, the introduction of new products
by EIS, the introduction of new products by EIS's competitors, acquisitions by
EIS, production and quality problems, changes in the cost of materials,
disruption in sources of supply, seasonal patterns of capital spending by
customers and other factors, many of which are beyond EIS's control. Since a
substantial portion of the expenses of EIS do not vary relative to sales levels,
if net sales levels in a particular quarter do not meet expectations, operating
results will be adversely affected, which may have an adverse impact on the
market price of EIS's Common Stock. EIS's system sales typically involve a three
to six month selling process for sales to direct consumer marketing customers
and a longer process for sales to certain other customers. EIS normally ships
systems within 30 days after order and does not customarily have a significant
backlog of orders at any time. EIS derives a substantial portion of its revenues
from the sale of products in which a single transaction may exceed $150,000. As
a result, the closing, or failure to close, of a small number of transactions
could have a significant impact on EIS's net revenues and operating results in
any given quarter.
New Products and Technological Change. The market for call processing
systems is based upon sophisticated technologies and is subject to rapid
technological change. There can be no assurance that EIS's new products will
gain market acceptance. Current or new competitors may introduce new products,
features or services that could adversely affect EIS's competitive position. To
date, EIS's research and development programs have periodically produced system
features and enhancements to address customer requirements and to respond to
competitive conditions. However EIS believes that to remain competitive it must
continue to improve its products and related services and develop and
successfully market new products and services. There can be no assurance that
EIS will be able to do so. The success of new products depends on a variety of
factors, including product selection, successful and timely completion of
product development and EIS's ability to offer products at competitive prices.
Furthermore, there can be no assurance that EIS will be able to identify new
product opportunities successfully and develop and bring to market such new
products or that EIS will be able to respond effectively to technological change
or product announcements by others.
Competition. The market for call processing systems is highly competitive.
EIS believes that competition will intensify as more companies enter the market.
EIS's principal competitors at present include Davox Corporation, Digital
Systems International, Inc., Melita International Corporation and Intervoice.
EIS may encounter increased competition from existing competitors and from new
market entrants, including companies which have historically competed primarily
in the inbound call processing market such as Aspect, Rockwell and Northern
Telecom. In addition, for sales of applications software operating in call
centers, EIS may compete with software providers and system integrators such as
Andersen Consulting and Electronic Data Systems Corporation. Many of EIS's
current or potential competitors have greater financial, technical and marketing
resources than EIS and there can be no assurance that EIS will be able to
continue to
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compete successfully with existing or new competitors. As EIS expands its
offering of call center applications, EIS may also encounter increased
competition from call center application providers. As the call processing
market matures and new and existing companies compete for the same customers,
price competition is likely to intensify, and such price competition could
adversely affect EIS's operating results.
Risks Associated with Acquisitions. EIS has grown significantly through
acquisitions and EIS intends to continue to use acquisitions to grow. EIS's
ability to expand successfully by acquisition depends on many factors, including
the successful identification and acquisition of businesses and management's
ability to integrate and operate the new businesses effectively. The
consideration paid for such acquisitions, the diversion of the attention of
management to integrate any acquired businesses and any difficulties encountered
in the integration process could have an adverse effect on EIS's operations and
financial results.
Intellectual Property Risks. EIS's success will depend in part on its
ability to obtain and maintain patent protection for its products, to preserve
its trade secrets and to operate without infringing on the proprietary rights of
third parties. EIS attempts to protect its technology by, among other things,
investing significant financial resources in obtaining and maintaining patents,
copyrights and trade secrets. The call processing industry is characterized by
vigorous protection and pursuit of intellectual property rights or positions,
which have resulted in significant and often protracted and expensive
litigation. EIS has from time to time received notices of potential intellectual
property infringement claims against it and has settled one such claim. Any
assertions of intellectual property claims could require EIS to discontinue the
use of certain processes or cease the manufacture, use and sale of infringing
products, to incur significant litigation costs and damages, and to develop
non-infringing technology or to acquire licenses to the alleged infringed
technology. There can be no assurance that EIS would be able to obtain such
licenses on acceptable terms or to develop noninfringing technology. In
addition, there can be no assurance that any patents issued to EIS will not be
challenged, invalidated or circumvented or that rights granted thereunder will
provide competitive advantages to EIS. Furthermore, the laws of certain
countries do not protect EIS's intellectual property rights to the same extent
as do the laws of the United States.
Dependence on Subcontractors and Availability of Components. EIS's call
processors (digital switches) are manufactured, assembled and tested by
independent subcontractors under supply contracts. Any adverse development
affecting EIS's current subcontractors could result in delays in the production
and delivery of EIS's systems and could have an adverse impact on manufacturing
quality and EIS's operating results. Except for some of the integrated circuit
boards provided by the subcontractors, EIS's systems are manufactured from
standard industry components. To date, adequate stocks of the components have
been available in a timely manner from a variety of suppliers. However, a delay
or lack of supply of these components from existing sources or an inability to
obtain alternative sources, if and when required in the future, could adversely
affect EIS's operating results.
The personal computers used in the EIS's call center system are supplied
through two manufacturers. An interruption in supply of such personal computers
or the required peripherals could disrupt or delay the shipment of call center
systems.
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Leasing Activities. EIS has offered lease financing to its international
and United States customers and intends to continue this practice in the future.
Typically, EIS offers these payment terms to entrepreneurial businesses with
limited capitalization which may not be considered "credit worthy" by financial
institutions. EIS has an agreement with a third party leasing company to finance
some of its systems which provides, among other things, that some leases
financed under the agreement are subject to a 10% recourse from EIS. EIS plans
to continue its practice of providing lease financing for its customers, and may
enter into additional agreements with third party leasing companies to finance
its systems, which may also include certain recourse arrangements. In addition,
EIS from time to time sells portions of its lease portfolio to third parties, on
terms which may include recourse provisions and at a discount. EIS recognized a
loss of $106,000 on the sale of a lease portfolio in August 1994. There can be
no assurance that lessee defaults will not have an adverse affect on EIS's
future operating results or that EIS will be able to sell its leases on
acceptable terms in the future.
Government Regulation. Certain uses of outbound call processing systems are
regulated by federal and state law, including the Telephone Consumer Protection
Act of 1991 and the Federal Fair Debt Collection Practices Act. Although
compliance with these laws may limit the potential uses of EIS's systems in some
respects, EIS believes that each system can be programmed to operate
automatically in full compliance with these laws through the use of appropriate
calling lists and calling campaign time parameters. There can be no assurance,
however, that future legislation further restricting telephone solicitation
practices, if enacted, would not adversely affect EIS.
A number of technical elements of EIS's systems are subject to and conform
with Federal Communications Commission regulations under the Federal
Communications Act of 1934. Future products developed by EIS may also be subject
to compliance with similar or even more restrictive regulations before they can
be sold in the United States. To the extent EIS markets its products in foreign
countries, it is required to comply with applicable foreign laws, including
certification of its products by appropriate government regulatory
organizations. There can be no assurance that EIS will not encounter delays or
difficulty in obtaining such certifications and approvals.
Developing Market. The market for call processing systems is relatively new
and evolving. The future financial performance of EIS will depend in part on the
development and continuing growth of this market. EIS believes that such growth
will require expansion of current applications of existing customers,
development of new markets for these systems and increased user acceptance. A
number of factors, such as the continuing development of an already generally
negative consumer perception of telephone solicitation, could adversely impact
the growth of various applications segments of EIS's markets. Therefore, there
can be no assurance that these markets will grow.
International Sales. EIS's net sales to international markets represented
approximately 6%, 6%, 4% and 6% of EIS's net revenues for the years ended
December 31, 1992, 1993, 1994 and 1995 respectively. International sales are
subject to various risks, including changes in foreign currency exchange rates,
political and economic instability, the greater difficulty of administering
business abroad and the need to comply with a wide variety of foreign and U.S.
export laws and regulatory requirements. EIS does not currently engage in
foreign currency hedging transactions. To the extent that EIS expands its
international operations, exposure to changes in foreign currency exchange rates
and to the other risks described above could increase and, in any event, could
have a material adverse effect on EIS.
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Attraction and Retention of Key Personnel. EIS's ability to develop
marketable products and maintain a competitive position in light of continuing
technological developments will depend, in large part, on its ability to attract
and retain highly qualified personnel. Competition for the services of these key
employees is likely to be intense, and there can be no assurance that EIS will
be able to attract or retain the personnel necessary for EIS's growth.
Possible Volatility of Stock Price. As is frequently the case with the
stock of high technology companies, the market price of EIS's Common Stock has
been and may continue to be quite volatile. Factors such as quarterly
fluctuations in results of operations, announcements of technological
innovations or the introduction of new products by EIS or its competitors, and
macroeconomic conditions in the call processing industry generally, may have a
significant impact on the market price of EIS's Common Stock. In addition, at
various times the stock market has experienced extreme price and volume
fluctuations that particularly affected the market price for many high
technology companies, often without regard to a particular company's operating
results. These broad fluctuations may adversely affect the market price of the
Common Stock of EIS.
Significant Stockholders; Antitakeover Considerations. As of January 31,
1996, the directors and executive officers of EIS and their affiliates
beneficially owned in the aggregate approximately 20% of EIS's outstanding
Common Stock (including shares subject to outstanding options and warrants). If
these stockholders vote together as a group, they will be able to substantially
influence the business and affairs of EIS, including the election of individuals
to EIS's Board of Directors, and to otherwise affect the outcome of certain
actions that require stockholder approval, including the adoption of amendments
to EIS's Restated Certificate of Incorporation, and certain mergers, sales of
assets and other business acquisitions or dispositions.
EIS also has authorized a class of 2,000,000 shares of Preferred Stock,
$.10 par value, which may be issued by EIS's Board of Directors on such terms,
and with such rights, preferences and designations, as EIS's Board of Directors
may determine. EIS's Restated Certificate of Incorporation provides for a
classified Board of Directors elected to staggered terms, restricts the ability
of stockholders to call stockholders meetings and provides that stockholders may
not act by written consent in lieu of a meeting. Delaware law imposes
restrictions on certain transactions not approved by EIS's Board of Directors
involving certain persons who hold or acquire 15% or more of EIS's voting
securities. Some or all of the foregoing factors may have the effect of
delaying, deterring or preventing a change in control of EIS.
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USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each Selling Stockholder
as of March 1, 1996.
Number of Number of
Name of Shares of Shares of
Selling Common Stock Common Stock
Stockholder(1) Beneficially Owned Offered Hereby
UNC Partners, Inc.(2) 6,949 2,779
UNC Ventures II, L.P.(3) 77,189 17,031
Westford Technology
Ventures, L.P.(4) 235,282 29,015
TSG Ventures, Inc.(5) 68,462 12,681
Harry Peisach(6) 195,455 24,898
Thomas Yianilos(7) 61,622 7,166
William Yianilos(8) 7,041 735
Peter Yianilos(9) 5,283 735
Beatrice Yianilos and
Thomas Yianilos,
Co-Trustees, under
the Will of Nicholas
P. Yianilos(10) 8,016 1,469
TOTALS 665,299 96,509
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(1) Sales of the shares of Common Stock offered hereby may also be made by
permitted persons or entities to whom such shares are gifted by the Selling
Stockholders listed herein.
(2) Includes 4,170 shares issued to UNC Partners, Inc. in connection with the
acquisition of Cybernetics by EIS on March 1, 1996.
(3) Includes 60,158 shares issued to UNC Ventures II, L.P. in connection with
the acquisition of Cybernetics by EIS on March 1, 1996.
(4) Includes 206,267 shares issued to Westford Technology Ventures, L.P. in
connection with the acquisition of Cybernetics by EIS on March 1, 1996.
(5) Includes 55,781 shares issued to TSG Ventures, Inc. in connection with the
acquisition of Cybernetics by EIS on March 1, 1996.
(6) Includes 98,292 shares issued to Harry Peisach in connection with the
acquisition of Cybernetics by EIS on March 1, 1996 and 72,265 shares
issuable upon the exercise of stock options that are exercisable within 60
days of March 1, 1996.
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(7) Includes 17,438 shares issued to Thomas Yianilos in connection with the
acquisition of Cybernetics by EIS on March 1, 1996 and 37,058 shares
issuable upon the exercise of stock options that are exercisable within 60
days of March 1, 1996.
(8) Includes 6,306 shares issued to William Yianilos in connection with the
acquisition of Cybernetics by EIS on March 1, 1996.
(9) Includes 4,548 shares issued to Peter Yianilos in connection with the
acquisition of Cybernetics by EIS on March 1, 1996.
(10) Includes 6,547 shares issued to Beatrice and Thomas Yianilos as Co-
Trustees, under the Will of Nicholas P. Yianilos in connection with the
acquisition of Cybernetics by EIS on March 1, 1996.
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PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Prospectus may be offered and
sold from time to time by the Selling Stockholders. The Selling Stockholders
will act independently of the Company in making decisions with respect to the
timing, manner and size of each sale. Such sales may be made on the Nasdaq
National Market or otherwise, at prices related to the then-current market price
or in negotiated transactions, including pursuant to one or more of the
following methods: (a) purchases by a broker-dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (b) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (c) block trades in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction. The Company has not been advised by the
Selling Stockholders that they have made any particular arrangements relating to
the distribution of the shares covered by this Prospectus. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for the other
broker-dealers to participate. Broker-dealers will receive commissions or
discounts from the Selling Stockholders in amounts to be negotiated immediately
prior to the sale.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including certain liabilities under the Securities Act.
Additionally, the Company will pay the expenses incurred by it in connection
with this offering, other than discounts, commissions, fees or expenses of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Stock, or legal expenses of
any person other than the Company.
In offering the shares of Common Stock covered hereby, the Selling
Stockholder and any broker-dealers and any other participating broker-dealers
who execute sales for the Selling Stockholder may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions.
The Company has advised the Selling Stockholders that during such time as
they may be engaged in a distribution of Common Stock covered hereby they are
required to comply with Rules 10b-6 and 10b-7 under the Exchange Act, as those
Rules are described in more detail below, and, in connection therewith, that
they may not engage in any stabilization activity in connection with the
Company's securities, are required to furnish to each broker-dealer through
which Common Stock covered hereby may be offered copies of this Prospectus, and
may not bid for or purchase any of the Company's securities except as permitted
under the Exchange Act. Rule 10b-6 under the Exchange Act prohibits, with
certain exceptions, participants in a distribution from bidding for or
purchasing, for an account in which the participant has a beneficial interest,
any of the securities that are the subject of the distribution. Rule 10b-7
governs bids and purchases made in order to stabilize the price of a security in
connection with a distribution of the security.
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LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Hale and Dorr, Boston, Massachusetts.
EXPERTS
The consolidated financial statements and schedule of the Company as of
December 31, 1994 and 1995, and for each of the years in the three-year period
ended December 31, 1995, have been incorporated by reference in this Prospectus
and in the registration statement on Form S-3 to which this Prospectus relates
in reliance upon the reports of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
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