As filed with the Securities and Exchange Commission on March 19, 1999
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM 8-A/A
POST-EFFECTIVE AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ELXSI Corporation
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in Its Charter)
Delaware 77-0151523
- --------------------------------------------------- -------------------
(State of Incorporation or Organization) (IRS Employer
Identification No.)
3600 Rio Vista Avenue, Suite A, Orlando, Florida 32805
- --------------------------------------------------- -------------------
(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of Exchange pursuant to Section 12(g) of the
Act and is effective pursuant to Exchange Act and is effective pursuant
General Instruction A.(c), please check to General Instruction A.(d), please
the following box [ ] check the following box [ ]
Securities Act registration statement file number to which this form
relates:_______________________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so registered Each Class is to be to be so Registered
------------------- ---------------------------------------
None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
================================================================================
<PAGE>
2
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
EXPLANATORY NOTE. In March 1999 the Registrant amended the Rights
Agreement (and, accordingly, the terms of the Rights) by entering into a Rights
Agreement Amendment, dated as of March 16, 1999, between the Registrant and the
Rights Agent. In order to update the description of the Rights set forth in Item
1 of the Form 8-A Registration Statement, dated and filed with the Securities
and Exchange Commission ("SEC") on June 10, 1997, under which the Rights were
first registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), such Item 1 is hereby amended and restated in its
entirety as follows (capitalized terms used and not defined in this paragraph
have the respective meanings ascribed to such terms hereinbelow):
The Board of Directors of ELXSI Corporation (the "Company" or the
"Registrant") declared a dividend distribution of one common stock purchase
right (collectively, the "Rights") for each outstanding share of Common Stock,
par value $.001 per share (the "Common Stock"), of the Company to holders of
record of the Common Stock at the opening of business on June 16, 1997 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one share of Common Stock (or in certain circumstances, cash, property,
or other securities of the Company) at a purchase price of $25.00, subject to
adjustment (the "Purchase Price").
The actual terms of the Rights are established under and set forth in a
Rights Agreement, dated as of June 4, 1997 (the "Original Rights Agreement"),
between the Company and Continental Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent"), as amended by that certain Rights Agreement
Amendment, dated as of March 16, 1999 (the "Rights Agreement Amendment"; and the
Original Rights Agreement as amended by the Rights Agreement Amendment, the
"Rights Agreement") between the Company and the Rights Agent. A conformed copy
of the Original Rights Agreement (including a form of the certificate to
represent the Rights) is filed herewith as Exhibit 1 and is hereby incorporated
herein by reference; a conformed copy of the Rights Agreement Amendment is filed
herewith as Exhibit 2 and is hereby incorporated herein by reference. The
following description of the Rights is qualified by reference to such Exhibits 1
and 2. Capitalized terms used but not otherwise defined herein have the
respective meanings ascribed to such terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing shares of Common Stock then outstanding, and no separate Rights
certificates will be distributed. The Rights will separate from the Common
Stock, and become exercisable, at such time (if any) that is the earlier to
occur of (as the case may be, the "Distribution Date"): (i) ten business days
following the first date of public announcement (the "Stock Acquisition Date")
that a person or group, together with such person's or group's Affiliates and
Associates (as defined under specified rules of the Securities and Exchange
Commission), has become the beneficial owner of 15% (35% in the case of the
Milley Group Members, and the Kellogg Group Member Limit in the case of the
Kellogg Group Members (as such terms hereinafter defined)) or more of the Common
Stock (such a person or group, an "Acquiring Person"), and (ii) ten business
days (or such later date as is determined by the Board of Directors, or if there
previously has been an Adverse Change of Control, by a majority of the
Continuing Directors (as such terms are hereinafter defined)) after the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% (35% in the case of the Milley Group Members,
and the Kellogg
<PAGE>
3
Group Member Limit in the case of the Kellogg Group Members) or more of the
Common Stock.
The "Milley Group Members" are: (a) Alexander M. Milley (the Chairman
of the Board, President and Chief Executive Officer of the Company, (b) his wife
and children, (c) any guardian, representative, executor, estate, administrator
or agent of Mr. Milley, his wife or children (but only with respect to any
shares of Common Stock beneficially owned by any such guardian, representative,
executor, estate, administrator or agent in its capacity as such), and (d)
provided that Mr. Milley has voting power with respect to any shares of Common
Stock held by any of the following: (x) any trust for the benefit of Mr. Milley,
his wife or children, and (y) any corporation, partnership, limited liability
company or other entity which Mr. Milley, his wife or any of his children may
control. In calculating the beneficial ownership of shares of Common Stock of
Milley Group Members and their Affiliates and Associates for purposes of the
Rights Agreement, all Kellogg Group Member Shares (as hereinafter defined) are
excluded.
The "Kellogg Group Members" are: (a) Peter R. Kellogg, (b) his wife,
(c) any guardian, representative, executor, estate, administrator or agent of
Mr. Kellogg or his wife (but only with respect to any shares of Common Stock
beneficially owned by any such guardian, representative, executor, estate,
administrator or agent in its capacity as such), (d) any trust for the benefit
of Mr. Kellogg or his wife, and (e) any corporation, partnership, limited
liability company, foundation or other entity which Mr. Kellogg or his wife may
control.
The "Kellogg Group Member Limit" is the greater of: (a) 1,000,000
shares of Common Stock (subject to adjustment for stock splits, stock dividends,
etc.) LESS the number of shares of Common Stock then beneficially owned by all
Kellogg Related Persons (as hereinafter defined) and all of their respective
Affiliates and Associates, and (b) 15% of the shares of Common Stock then
outstanding; PROVIDED that if at any time it is established that any Kellogg
Group Member or any Affiliate or Associate of any Kellogg Group Member who is a
beneficial owner of Common Stock acquired those securities with the any purpose
or effect of changing or influencing the control of the Company, or in
connection with or as a participant in any transaction having that purpose or
effect, then the foregoing clause (b) shall no longer be effective and the
"Kellogg Group Member Limit" will be 15% of the shares of Common Stock then
outstanding.
The "Kellogg Related Persons" are: (a) any descendant of Peter R.
Kellogg, (b) the spouse of any descendant of Mr. Kellogg, (c) any guardian,
representative, executor, estate, administrator or agent of any descendant of
Mr. Kellogg or the spouse of any descendant of Mr. Kellogg (but only with
respect to any shares of Common Stock beneficially owned by any such guardian,
representative, executor, estate, administrator or agent in its capacity as
such), (d) any trust for the benefit of any descendant of Mr. Kellogg or any
spouse of such descendant, and (e) any corporation, partnership, limited
liability company, foundation or other entity which any descendant of Mr.
Kellogg or any spouse of such descendant may control. If under the definitions
under the Rights Agreement any person or entity may be both a "Kellogg Group
Member" (or an Affiliate or Associate thereof) and a "Kellogg Related Person"
(or an Affiliate or Associate thereof), that person or entity will be deemed to
be a Kellogg Group Member or an Affiliate or Associate of a Kellogg Group
Member.
The "Kellogg Group Member Shares" are any shares of Common Stock:
(a)(x) beneficially owned by any Kellogg Group Member, any Kellogg Related
Person or any Affiliate
<PAGE>
4
or Associate of any of the foregoing and (y) the power to vote of which, in
accordance with the Kellogg Standstill Agreement (as hereinafter defined), have
been granted to a Milley Group Member (or a designee thereof); or (b) otherwise
acquired by any Milley Group Member (or any designee thereof) pursuant to the
Kellogg Standstill Agreement. The "Kellogg Standstill Agreement" is that certain
Standstill Agreement, dated as of March 16, 1999, among the Company, Alexander
M. Milley and the "Kellogg Persons" party thereto (each of whom or which are
Kellogg Group Members under the Rights Agreement), which was entered into
substantially simultaneously with, and in connection with, the Rights Agreement
Amendment. See "Kellogg Standstill Agreement" hereinbelow.
Until the Distribution Date: (i) the Rights will be evidenced only by
the Common Stock certificates and will be transferred with such Common Stock
certificates, (ii) new Common Stock certificates issued on or after the Record
Date will contain a legend indicating that such certificates also represent
Rights and incorporating by reference the terms of the Rights Agreement, and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
The Rights will not be exercisable until the Distribution Date (if any)
and will expire at the close of business on June 15, 2007, unless earlier
redeemed or exchanged by the Company as described below.
As soon as practicable after any Distribution Date, separate
certificates representing Rights, in the form of Exhibit A to the Rights
Agreement ("Rights Certificates"), will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date, and
thereafter, the separate Rights Certificates alone will represent the Rights.
Except as otherwise provided by the Rights Agreement or determined by the Board
of Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a person or group becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
shares of Common Stock (or in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or any of its Affiliates or Associates will be
null and void.
After any Stock Acquisition Date, in the event that: (i) the Company
consolidates or merges with any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding shares of Common
Stock of the Company are changed into or exchanged for stock, other securities
of the other person, or cash or any other property, and the Company is the
surviving corporation, or (iii) 50% or more of the Company's assets or earning
power is sold or otherwise transferred, the Rights Agreements requires that
proper provisions be made so that each holder of a Right shall thereafter have
the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price. The events set forth in
this paragraph and the immediately preceding paragraph are referred to as the
"Triggering Events."
<PAGE>
5
The Purchase Price payable, and the number of shares of Common Stock or
other securities, cash or property issuable, upon exercise of the Rights are
subject to customary adjustments from time to time to prevent dilution in the
event of certain changes in the shares of the Company. With certain exceptions,
no adjustment in the Purchase Price will be required until cumulative
adjustments amount to an increase or decrease of at least 1% in the Purchase
Price.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (subject to adjustment), at any time before
the earlier of the close of business on: (i) the tenth business day following
any Stock Acquisition Date or (ii) the expiration date of the Rights. However,
if the authorization to redeem the Rights occurs on or after the date that there
shall have been a change in a majority of the Board of Directors of the Company
as a result of a proxy or consent solicitation and a person or group that was a
participant in such solicitation has stated (or if upon the commencement of such
solicitation, a majority of the Board of Directors of the Company has determined
in good faith) that such person or group (or any of its Affiliates or
Associates) has taken or intends to take or may consider taking actions that
would result in such person or group becoming an Acquiring Person or cause the
occurrence of a Triggering Event (the existence of these circumstances being
referred to as an "Adverse Change of Control"), then the redemption of the
Rights will require the approval of a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $.001 redemption price.
"Continuing Director" means: (i) any member of the Board of Directors
of the Company who, while a member of such Board, is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of such
Board prior to the Record Date, or (ii) any person who subsequently becomes a
member of such Board who, while a member of such Board, is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such person's
nomination for election or election to the Board of Directors of the Company is
recommended or approved by a majority of the Continuing Directors.
At any time after a person or group becomes an Acquiring Person (but
before such Acquiring Person owns 50% or more of the Common Stock), the Board of
Directors of the Company may exchange the then outstanding and exercisable
Rights (other than those owned by an Acquiring Person, or any of its Affiliates
or Associates, that have become null and void as referenced hereinabove), for
shares of Common Stock, each Right being exchangeable for one share of Common
Stock, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended or
supplemented by the Board of Directors of the Company (without the approval of
holders of Rights) prior to the earliest to occur of (i) a Distribution Date,
(ii) a Triggering Event or (iii) an Adverse Change of Control. After the first
to occur of such events, the provisions of the Rights Agreement may be amended
or supplement with the approval of a majority of the Continuing Directors (and
<PAGE>
6
without the approval of holders of Rights): (x) in any manner that will not
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or its Affiliates or Associates), or (y) in order to cure any ambiguity
or to correct or supplement any provision that a majority of the Continuing
Directors may deem to be defective or inconsistent with other provisions of the
Rights Agreement, or (z) to shorten or lengthen any time period under the Rights
Agreement; however, the Rights Agreement cannot be so supplemented or amended to
(A) change the redemption price, accelerate the expiration date of the Rights,
change the Purchase Price, or change the number of shares of Common Stock for
which a Right is exercisable, or (B) lengthen (1) the time period when the
Rights may be redeemed at a time when the Rights are not then redeemable, or (2)
any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or, the benefits to, the holders of
Rights (other than an Acquiring Person or its Affiliates or Associates).
The Rights may have certain "anti-takeover" effects, inasmuch as they
may operate to cause substantial dilution to a person or group (and the
Affiliates and Associates thereof) that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being acquired. The
Rights may thus lessen the likelihood that a takeover attempt will be made with
respect to the Company. However, in the opinion of the Company's management, the
Rights will help ensure that the Company's stockholders receive fair and equal
treatment in the event of any proposed takeover of the Company. The execution of
the Rights Agreement and distribution of the Rights by the Company was not in
response to any specific takeover threat or proposal, but were precautions taken
in order to help protect these interests of the Company's stockholders.
KELLOGG STANDSTILL AGREEMENT. The "Acquiring Person" provisions of the
Rights Agreement relating to "Kellogg Group Members" and the "Kellogg Group
Member Limit" (and described in the fourth paragraph of this Item 1) (the
"Kellogg Amendments") were added to the Rights Agreement under the Rights
Agreement Amendment. The determination by the Company and its Board of Directors
to implement the Rights Agreement Amendment was based upon, in part, the
representations, warranties, covenants and agreements of the Kellogg Persons
under the Kellogg Standstill Agreement. Consistent therewith, the Rights
Agreement Amendment provides that in the event that at any time any Kellogg
Person is in breach of or default under the Kellogg Standstill Agreement, the
effectiveness of the Kellogg Amendments may, at the election of the Company, be
suspended or terminated. The remainder of this Item 1 sets forth a brief
description of the Kellogg Standstill Agreement, a conformed copy of which is
filed herewith as Exhibit 3 and is hereby incorporated herein by reference.
Capitalized terms used in this part of Item 1 but not defined hereinabove have
the respective meanings ascribed to such terms in the Rights Agreement or the
Kellogg Standstill Agreement.
Under the Kellogg Standstill Agreement, the Kellogg Persons have
represented and warranted that: (a) they have disclosed to the Company the names
of all Kellogg Group Members, Kellogg Related Persons and Affiliates and
Associates thereof who beneficially own any Common Stock, and number of shares
so owned; (b) their shares were not acquired and are not held for the purpose of
or with the effect of changing or influencing the control of the Company, or in
connection with or as a participant in any transaction having that purpose or
effect; and (c) they acknowledge and agree that their representations,
warranties, covenants and agreements under the Kellogg Standstill Agreement were
a material inducement to the Company's entering into of the Rights Agreement
Amendment, and in the event of a breach of or default thereunder the Company may
(by the terms of the Rights Agreement Amendment or
<PAGE>
7
otherwise, and without limiting any of the rights or remedies that may be
available to the parties under this Agreement at law or in equity), suspend or
terminate the Kellogg Amendments, terminate the Rights Agreement Amendment or
take other actions having the purpose or effect of modifying or altering the
Kellogg Amendments.
Under the Kellogg Standstill Agreement, the Kellogg Persons have agreed
that: (a) the number of shares beneficially owned by the Kellogg Group Members
and their respective Affiliates and Associates will not exceed the Kellogg Group
Member Limit; (b) they will prepare and file with the SEC and deliver to the
Company, in each case on a timely basis, all schedules, statements and other
reports in respect of the Company and/or Common Stock required under Section 13
or 16 of the Exchange Act; that such schedules, statements or other reports will
contain all of the disclosures and information required under the applicable
rules and regulations of the SEC; and that such disclosures and information will
be true, correct and complete in all material respects; and (c) if after the
date of the Kellogg Standstill Agreement any Kellogg Group Member or any
Affiliate or Associate thereof who (in each case) is not already a "Kellogg
Person" party thereto purchases or otherwise acquires any shares of Common Stock
or other voting securities of the Company ("Other Voting Securities"), that
person or entity will promptly thereafter take the actions specified therein to
become a "Kellogg Person" party to the Kellogg Standstill Agreement.
Under the Kellogg Standstill Agreement, each Kellogg Person has
irrevocably constituted and appointed Mr. Milley the attorney-in-fact and proxy
of such Kellogg Person, with full power of substitution, to vote all shares of
Common Stock and Other Voting Securities which such Kellogg Person is entitled
to vote at any annual or special meeting of the stockholders of the Company, and
to express consent or dissent to any corporate action in writing without a
meeting of the stockholders of the Company, in such manner as Mr. Milley or his
substitute may determine. The foregoing proxy and power of attorney: (i) are
stated to be coupled with an interest and irrevocable; (ii) cover any and all
shares of Common Stock and Other Voting Securities owned by any Kellogg Person,
whenever acquired; and (iii) will remain in effect for so long any Rights are
outstanding under the Rights Agreement (before or after any Distribution Date).
No Kellogg Person may grant any proxy or power of attorney to any person or
entity which conflicts with such proxy or power of attorney.
Under the Kellogg Standstill Agreement, the Kellogg Persons have
granted certain rights of first refusal over any shares of Common Stock or Other
Voting Securities owned by them to Mr. Milley, subject to certain exceptions.
Under the Kellogg Standstill Agreement, each Kellogg Person has agreed
that, unless and to the extent otherwise consented to in writing by the Company,
such Kellogg Person will not: (a) solicit proxies with respect to any Common
Stock or Other Voting Securities, actively oppose any action approved by a
majority of the Continuing Directors of the Company, or become a "participant"
in any "election contest" relating to the election of directors of the Company;
(b) propose, make or initiate, or solicit stockholders of the Company for the
approval of, one or more stockholder proposals; (c) propose, or make, initiate
or solicit any proposals from, or provide any information or participate in any
discussions or negotiations with, or otherwise cooperate in any way with or
assist, any person or entity concerning any merger, consolidation, other
business combination, tender or exchange offer, recapitalization, liquidation or
dissolution or any purchase or other acquisition or sale or other disposition of
assets (other than in the ordinary course of business) or shares of capital
stock of the Company or any of its subsidiaries
<PAGE>
8
or divisions or any similar transaction involving the Company or any subsidiary
or division of the Company or any subsidiary; (d) take any other action for the
purpose of or with the effect of changing or influencing the control of the
Company, or in connection with or as a participant in any transaction having
that purpose or effect; (e) form, join or in any way participate in any "group"
with respect to any securities of the Company (except a group consisting
entirely of Kellogg Group Members, Kellogg Related Persons, Milley Group Members
and/or their respective Affiliates or Associates); or (f) induce, attempt to
induce, encourage or solicit, or cooperate with, any other person or entity to
do any of the foregoing.
Under the Kellogg Standstill Agreement, if after the date thereof any
Kellogg Related Person or any Affiliate or Associate thereof acquires any
additional shares of Common Stock or Other Voting Securities, that person or
entity must promptly thereafter take the actions specified therein in order to
make applicable to such shares the above-described proxy and power of attorney
and rights of first refusal and the covenants and agreements described in the
immediately preceding paragraph hereof.
Under the Kellogg Standstill Agreement, Mr. Kellogg indemnifies the
Company, Mr. Milley, the other Milley Group Members and their respective
officers, directors, employees, agents, professional advisors and controlling
persons, for the period of time specified therein, from and against any and all
Losses (as defined) incurred or suffered by any of them as a result of or
arising out of or in connection with the Rights Agreement Amendment and/or
Kellogg Standstill Agreement.
Under the Kellogg Standstill Agreement, the Company has agreed that,
for so long as there is not any breach of or default under the Kellogg
Standstill Agreement on the part of any Kellogg Person, it will not suspend or
terminate any of the Kellogg Amendments, terminate the Rights Agreement
Amendment or take any other action having the purpose or effect of modifying or
altering such the Kellogg Amendments.
ITEM 2. EXHIBITS.
Exhibit Number Description of Exhibit
- -------------- ----------------------
1 Rights Agreement, dated as of June 4, 1997, between the
Registrant and Continental Stock Transfer & Trust Company, as
Rights Agent (Incorporated herein by reference to Exhibit 4.17
to the Registrant's Form 8-A Registration Statement dated and
filed with the Commission on June 10, 1997 (File No. 0-11877))
2 Rights Agreement Amendment, dated as of March 16, 1999,
between the Registrant and Continental Stock Transfer & Trust
Company, as Rights Agent
3 Standstill Agreement, dated as of March 16, 1999, among the
Registrant, Alexander M. Milley and the "Kellogg Persons"
party thereto
<PAGE>
9
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
ELXSI CORPORATION
Dated: March 19, 1999 By:/s/ ALEXANDER M. MILLEY
---------------------------------
Alexander M. Milley
President
<PAGE>
10
EXHIBIT INDEX
Exhibit No. Description Page
----------- ----------- ----
1
Rights Agreement, dated as of June 4, 1997,
between the Registrant and Continental
Stock Transfer & Trust Company, as Rights
Agent (Incorporated herein by reference to
Exhibit 4.17 to the Registrant's Form 8-A
Registration Statement dated and filed with
the Commission on June 10, 1997 (File No.
0-11877))
2 Rights Agreement Amendment, dated as of
March 16, 1999, between the Registrant and
Continental Stock Transfer & Trust Company,
as Rights Agent 11
3 Standstill Agreement, dated as of March 16,
1999, among the Registrant, Alexander M.
Milley and the "Kellogg Persons" party
thereto 17
11
EXHIBIT 2
---------
RIGHTS AGREEMENT AMENDMENT
THIS RIGHTS AGREEMENT AMENDMENT, dated as of March 16, 1999 (as the
same may be modified, amended, supplemented and/or restated from time to time,
this "Amendment"), relates to that certain Rights Agreement, dated as of June 4,
1997 (as the same may be further modified, amended, supplemented and/or restated
from time to time, the "Agreement"), between ELXSI CORPORATION, a Delaware
corporation (the "Company"), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a
New York corporation, as Rights Agent (the "Rights Agent"). Capitalized terms
used and not defined herein have the respective meanings ascribed to such terms
under the Agreement.
BACKGROUND
Prior to the date hereof, Peter R. Kellogg and certain other Kellogg
Group Members (as such term is defined hereinbelow) became the Beneficial
Owners, in the aggregate, of more than 15% of the outstanding shares of Common
Stock of the Company, with the result that (but for the amendments to the
Agreement set forth in Section 1(A) hereof (the "Kellogg Amendments")) such
Persons may have become "Acquiring Persons" under the Agreement. Under the
Kellogg Standstill Agreement (as such term is defined hereinbelow), Peter R.
Kellogg and the other Kellogg Persons (as such term is defined therein) have
represented and warranted to the Company that: (i) their becoming "Acquiring
Persons" under the Agreement (if in fact the case) was inadvertent, and (ii)
said shares were not acquired and are not held for the purpose of or with the
effect of changing or influencing the control of the Company, or in connection
with or as a participant in any transaction having that purpose or effect.
The Board of Directors of the Company, all of whom are Continuing
Directors within the meaning of the Agreement: (x) having taken into
consideration the foregoing representations and warranties of the Kellogg
Persons and the other provisions of the Kellogg Standstill Agreement, and (y)
having determined that, in light of such representations, warranties and other
provisions, permitting said inadvertent acquisition of Common Stock to result in
a Triggering Event or Distribution Date under the Agreement would be inimical to
the interests of, if not injurious to, the Company and the holders of the
Rights, wish to supplement and amend the Agreement in order to (among other
things, as set forth hereinbelow) permit the present Common Stock holdings of
the Kellogg Group Members without resulting in such a Triggering Event or
Distribution Date.
This Amendment is being executed and delivered by the Company and, at
the direction of the Company, the Rights Agent in compliance with, and in
accordance with the authority granted under, Section 27 (AMENDMENTS AND
SUPPLEMENTS) and Section 29 (DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS) of the Agreement. The Board of Directors of the Company has
determined that the amendments to the Agreement effected hereunder are for the
purpose of protecting, enhancing or clarifying the rights of, and/or, the
benefits to, the holders of Rights.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, and intending to be legally bound hereby, the parties hereby
agree as follows:
AGREEMENTS
SECTION 1. AMENDMENT AND ADDITION OF CERTAIN DEFINITIONS.
(A) AMENDED AND RESTATED "ACQUIRING PERSON". Section 1(a) of the
Agreement is hereby amended and restated to read in its entirety as follows:
<PAGE>
12
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) any Exempt Person (as
hereinafter defined) or (ii) any Milley Group Member, if and so long as
all Milley Group Members, together with their Affiliates and
Associates, are not the Beneficial Owners of 35% or more of the shares
of Common Stock then outstanding or (iii) any Kellogg Group Member, if
and so long as all Kellogg Group Members, together with their
Affiliates and Associates, are not the Beneficial Owners of a number
shares of Common Stock equal to or in excess of the Kellogg Group
Member Limit. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of beneficial
ownership of shares of Common Stock by the Company that, by reducing
the number of shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) outstanding, increases the
percentage of shares of Common Stock beneficially owned by such Person
(together with all Affiliates and Associates of such Person) to 15% or
more (or, in the case of the Milley Group Members, 35% or more) of the
shares of Common Stock then outstanding; PROVIDED, HOWEVER, that if any
Person (other than Exempt Persons) (together with all Affiliates and
Associates of such Person) shall become the Beneficial Owner of 15% or
more (or, in the case of the Milley Group Members, 35% or more, or, in
the case of the Kellogg Group Members, the Kellogg Group Member Limit)
of the shares of Common Stock then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company, then such Person shall be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an
"Acquiring Person" as defined pursuant to the first sentence of this
paragraph (a), has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of shares of Common
Stock so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not, solely as a result of such inadvertent
acquisition, be deemed to be an "Acquiring Person" for any purpose of
this Agreement.
(B) AMENDMENT TO "BENEFICIAL OWNERSHIP". The proviso at the end of
Section 1(c) of the Agreement is hereby amended and restated to read in its
entirety as follows:
PROVIDED, HOWEVER, that nothing in this subsection (c) shall cause (i)
a Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition, or (ii) a Milley Group Member, or an
Affiliate or Associate of a Milley Group Member, to be the "Beneficial
Owner" of, or to "beneficially own," any Kellogg Group Member Shares.
(C) ADDITIONAL DEFINITIONS. Section 1 of the Agreement is hereby
further amended by adding to the following new definitions after subsection (r)
at the end thereof, to read in their entirety as follows:
(s) "Amendment Base Date" shall mean March 16, 1999.
(t) "Kellogg Group Member" shall mean (i) Peter R. Kellogg,
(ii) the spouse of Peter R. Kellogg, (iii) any guardian,
representative, executor, estate, administrator or agent of Peter R.
Kellogg or his spouse, but only with respect to any shares of Common
<PAGE>
13
Stock beneficially owned by any such guardian, representative,
executor, estate, administrator or agent in its capacity as such, (iv)
any trust for the benefit of Peter R. Kellogg or his spouse, and (v)
any corporation, partnership, limited liability company, foundation or
other entity which Peter R. Kellogg or his spouse may control (within
the meaning of Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act). For purposes of clarification, at
the Amendment Base Date the Kellogg Group Members and the Affiliates
and Associates thereof that beneficially own Common Stock are: Peter R.
Kellogg (individually); Cynthia K. Kellogg, Peter R. Kellogg's spouse;
I.A.T. Reinsurance Syndicate Ltd., a Bermuda corporation and its
subsidiaries; the Peter R. Kellogg & Cynthia K. Kellogg Foundation, a
New Jersey corporation; and the NOM Trust U/W/O James C. Kellogg, III,
a New Jersey-domiciled trust. The foregoing listing of Kellogg Group
Members and the Affiliates and Associates thereof: (a) is based upon
the representations and warranties of the Kellogg Persons under (and as
defined in) the Kellogg Standstill Agreement, (b) may not be an
exhaustive listing of such Persons, and (c) accordingly, shall not be
construed to exclude any other Person within the definition thereof who
is not, in fact, included in such listing.
(u) "Kellogg Group Member Limit" shall mean, at any time, the
greater of: (i) 1,000,000 shares of Common Stock (PROVIDED that if at
any time after the Amendment Base Date the Company shall effect any
stock split (forward or reverse), stock dividend or similar
transaction, then the foregoing share numbers shall be proportionately
increased or decreased, as appropriate) LESS the number of shares of
Common Stock then beneficially owned by all Kellogg Related Persons and
all of their respective Affiliates and Associates, and (ii) 15% of the
shares of Common Stock then outstanding; PROVIDED, HOWEVER, if at any
time any Kellogg Group Member of any Affiliate or Associate of any
Kellogg Group Member that beneficially owns Common Stock either (x) is
not eligible to report such ownership on a short-form statement on
Schedule 13G under the Exchange Act (or any comparable or successor
report) due to a failure to meet the condition to such eligibility set
forth in Rule 13d-1(c)(1) of the General Rules and Regulations under
the Exchange Act (or any comparable or successor rule), or (y) having
previously been so eligible, ceases to be so eligible by operation of
Rule 13d-1(e)(i) of the General Rules and Regulations under the
Exchange Act (or any comparable or successor rule), then the foregoing
clause (i) shall no longer be effective and the "Kellogg Group Member
Limit" at such time shall be 15% of the shares of Common Stock then
outstanding.
(v) "Kellogg Group Member Shares" shall mean, at any time any
shares of Common Stock: (i)(x) beneficially owned (within the meaning
of Rule 13d-3 or Rule 16a-1(a)(2) of the General Rules and Regulations
under the Exchange Act) by any Kellogg Group Member, any Kellogg
Related Person or any Affiliate or Associate of any Kellogg Group
Member or Kellogg Related Person and (y) the power to vote of which, in
accordance with the Kellogg Standstill Agreement, shall have been
granted to a Milley Group Member (or any designee thereof); or (ii)
otherwise acquired by any Milley Group Member (or any designee thereof)
pursuant to the Kellogg Standstill Agreement.
(w) "Kellogg Related Person" shall mean (i) any descendant of
Peter R. Kellogg, (ii) the spouse of any descendant of Peter R.
Kellogg, (iii) any guardian, representative, executor, estate,
administrator or agent of any descendant of Peter R. Kellogg or the
spouse of any descendant of Peter R. Kellogg, but only with respect to
any shares of Common Stock beneficially owned by any such guardian,
representative, executor, estate, administrator or agent in its
capacity as such, (iv) any trust for the benefit of any descendant of
Peter R. Kellogg or any spouse of such descendant, and (v) any
corporation, partnership, limited liability company, foundation or
other entity which
<PAGE>
14
any descendant of Peter R. Kellogg or any spouse of such descendant may
control (within the meaning of Rule 12b-2 of the General Rules and
Regulations promulgated under the Exchange Act). If any Person may be
deemed to be both a Kellogg Group Member or an Affiliate or Associate
of a Kellogg Group Member, on the one hand, as well as a Kellogg
Related Person or any Affiliate or Associate of a Kellogg Related
Person, on the other hand, then such Person shall for all purposes be
deemed to be a Kellogg Group Member or an Affiliate or Associate of a
Kellogg Group Member, as the case may be.
(x) "Kellogg Standstill Agreement" shall mean that certain
Standstill Agreement, dated as of March 16, 1999, among the Company,
Alexander M. Milley, the Persons whose names appear on the signature
page thereto under the terms "Original Kellogg Persons", and the other
Persons, if any, who subsequently become party to such Agreement as
"Additional Kellogg Persons", as the same may be modified, amended,
supplemented and/or restated from time to time.
SECTION 2. EFFECTIVENESS. (A) The Kellogg Amendments are being
implemented based upon: (i) the considerations and determinations of the Board
of Directors of the Company described in the "Background" section of this
Amendment, and (ii) the presumption that (x) the representations and warranties
of the Kellogg Persons under the Kellogg Standstill Agreement are true, correct
and complete in all material respects and (y) the Kellogg Persons thereunder
will at all relevant times fully comply with all of their covenants and
agreements thereunder. Accordingly, in the event that at any time any Kellogg
Person shall be in breach of or default under the Kellogg Standstill Agreement
(which for this purpose shall include (x) any failure on the part of any Kellogg
Related Person or any Affiliate or Associate thereof to execute and deliver an
instrument contemplated by Section 2.2(D) of the Kellogg Standstill Agreement
under the circumstances provided for thereunder and (y) any breach of or default
under such an instrument by any such Person), then (without limiting any of the
rights or remedies that may be available to the parties under the Kellogg
Standstill Agreement at law or in equity), the effectiveness of the Kellogg
Amendments shall, at the election of the Company (upon approval of a majority of
the Continuing Directors then in office), be suspended or terminated, without
the approval of or notice to: (a) any holders of certificates representing
shares of Common Stock and associated Rights or of any Rights Certificates, (b)
the Rights Agent, or (c) any other Person. In the event that any such suspension
or termination of the Kellogg Amendment results in any Person who would have
been an Acquiring Person (but for the Kellogg Amendments) becoming an Acquiring
Person, the time period for measuring the occurrence of any resulting
Distribution Date and/or a Triggering Event under the Agreement shall commence
on the effective date of such suspension or termination (as the case may be),
unless and to the extent otherwise determined by a majority of the Continuing
Directors in approving such suspension or termination (as the case may be).
(B) If at any time after the date hereof the beneficial ownership
of shares of Common Stock of the Kellogg Group Members, Kellogg Related Persons
and the Affiliates and Associates of any Kellogg Group Member or Kellogg Related
Person shall be less than 3% of the Common Stock then outstanding (in the
aggregate for all such Persons), then the Kellogg Amendments shall automatically
and forthwith terminate thereupon.
SECTION 3. NOTICES. The address for notices or demands authorized by
the Agreement to or on the Company is hereby amended and restated to read in its
entirety as follows:
ELXSI Corporation
3600 Rio Vista Avenue
Suite A
Orlando, Florida 32805
Attention: President
<PAGE>
15
SECTION 4. SUPPLEMENTS AND AMENDMENTS. This Amendment may be
supplemented and amended if such supplement or amendment (as the case may be) is
in compliance with Section 27 of the Agreement.
SECTION 5. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder
and under the Rights Agreement.
SECTION 6. BENEFITS OF THIS AMENDMENT. Nothing in this Amendment shall
be construed to give to any Person (including any Kellogg Group Member, any
Kellogg Related Person or any Affiliate or Associate of any Kellogg Group Member
or Kellogg Related Person) other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the shares of Common Stock) any legal or equitable right, remedy or claim
under this Amendment; but this Amendment shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock).
SECTION 7. SEVERABILITY. If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language of this Amendment would adversely affect the purpose or effect
of this Amendment, the right of redemption set forth in Section 23 of the
Agreement shall be reinstated and shall not expire until the close of business
on the tenth day following the date of such determination by the Board of
Directors.
SECTION 8. GOVERNING LAW. This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State;
PROVIDED, HOWEVER, that the rights and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 9. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[the remainder of this page is intentionally left blank]
<PAGE>
16
SECTION 10. DESCRIPTIVE HEADINGS. The Section headings in this
Agreement are for convenience of reference purposes only and shall not control
or affect the meaning or construction of any provision of this Agreement.
Section references in this Agreement are to the referenced Sections of this
Agreement, unless the context otherwise requires.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
ELXSI CORPORATION
Attest: By:_______________________________
Name: Alexander M. Milley
Title: President
By:______________________________
[Assistant] Secretary
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as Rights Agent
Attest: By:_______________________________
Name: William F. Seegraber
Title: Vice President
By:______________________________
[Assistant] Secretary
17
EXHIBIT 3
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT, dated as of March 16, 1999 (as the same may
be modified, amended, supplemented and/or restated from time to time, this
"Agreement"), is by and among (1) ELXSI Corporation, a Delaware corporation (the
"Company"), (2) Alexander M. Milley ("AMilley" or the "Milley Person"), (3) the
Persons whose names appear on the signature page hereto under the terms
"Original Kellogg Persons" (collectively, the "Original Kellogg Persons"), and
(4) the other Persons, if any, who subsequently become party to this Agreement
as "Additional Kellogg Persons" (collectively with the Original Kellogg Persons,
the "Kellogg Persons").
BACKGROUND
In 1997 the Board of Directors of the Company declared a dividend
distribution of one common stock purchase right (collectively, the "Rights") for
each outstanding share of Common Stock, par value $.001 per share (the "Common
Stock"). The terms of the Rights are established under and set forth in that
certain Rights Agreement, dated as of June 4, 1997 (as the same may be modified,
amended, supplemented and/or restated from time to time, the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent"). Capitalized terms used and not defined
herein have the respective meanings ascribed to such terms under the Rights
Agreement.
Prior to the date hereof, Peter R. Kellogg and the other Original
Kellogg Persons became the Beneficial Owners, in the aggregate, of more than 15%
of the outstanding shares of Common Stock, with the result that (but for the
Rights Agreement Amendment (defined below)) such Kellogg Persons may have become
"Acquiring Persons" under the Rights Agreement.
The Board of Directors of the Company has determined that if: (x) as
represented and warranted by the Original Kellogg Persons hereunder: (i) their
becoming "Acquiring Persons" under the Agreement (if in fact the case) was
inadvertent, and (ii) their shares of Common Stock were not acquired and are not
held for the purpose of or with the effect of changing or influencing the
control of the Company, or in connection with or as a participant in any
transaction having that purpose or effect, and (y) the other provisions of this
Agreement are complied with, permitting said inadvertent event (if in fact the
case) to result in a Triggering Event or Distribution Date under the Rights
Agreement would be inimical to the interests of, if not injurious to, the
Company and the holders of the Rights.
The Company therefore proposes to supplement and amend the Rights
Agreement in order to avoid such eventualities, pursuant to a Rights Agreement
Amendment in the form of Exhibit A hereto between the Company and the Rights
Agent (the "Rights Agreement Amendment"), but only after the Original Kellogg
Persons shall have executed and delivered this Agreement. The Original Kellogg
Persons have themselves determined that a Triggering Event or Distribution Date
resulting from their acquisition of Common Stock would be inimical to the
interests of, if not injurious to, the Original Kellogg Persons and,
accordingly, wish the Rights Agreement Amendment to become effective.
NOW, THEREFORE, in consideration of the covenants and undertakings
herein contained and intending to be legally bound hereby, the parties hereby
agree as follows:
<PAGE>
18
ARTICLE 1: REPRESENTATIONS AND WARRANTIES
SECTION 1.1. ALL PARTIES. The Kellogg Persons hereby represent and
warrant to the Company and AMilley, AMilley hereby represents and warrants to
the Kellogg Persons and the Company, and the Company hereby represents and
warrants to the Kellogg Persons and AMilley as follows:
(A) (In the case of the non-natural Persons party hereto) such
party has the full power and authority to enter into this Agreement and the
other agreement(s) and instrument(s) contemplated hereby to which it is or is to
be a party and to carry out its obligations hereunder and thereunder;
(B) (In the case of the non-natural Persons party hereto) the
execution, delivery and performance by such Person of this Agreement and the
other agreement(s) and instrument(s) contemplated hereby to which it is or is to
be a party, and the consummation by such party of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate,
partnership, trust or foundation action on its part;
(C) This Agreement and other agreement(s) and instrument(s)
contemplated hereby to which it is or is to be a party have been duly executed
and delivered by such party and constitute the legal, valid and binding
obligations of such party, enforceable against such party in accordance with
their respective terms, subject to: (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting creditors' rights generally, and (ii) general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law);
(D) The execution and delivery by such party of this Agreement
and the other agreement(s) and instrument(s) contemplated hereby to which it is
or is to be a party, the performance by such party of its obligations hereunder
and thereunder, and the consummation by such party of the transactions herein or
therein contemplated to be consummated by such party, do not and will not
conflict with, or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both would constitute a default) under, or result in the termination
or amendment of, or accelerate the performance required by, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which such party is a party or by which such party is, or to which
any of the property or assets of such party are subject, nor result in any
violation of the provisions of the certificate or articles of incorporation or
the bylaws of such party (or any similar constitutional document), or of any
statute, order, judgment, rule or regulation of any court or governmental agency
or body having jurisdiction over such party or the property or assets of such
party; and
(E) No authorization, consent or approval of, or filing with,
or notice to, any public body, court, authority or any other Person is necessary
for the execution and delivery by such party of this Agreement or the other
agreement(s) or instrument(s) contemplated hereby to which it is or is to be a
party, the performance by such party of its obligations hereunder and
thereunder, or the consummation by such party of the transactions contemplated
herein or therein contemplated to be consummated by such party, other than (in
each case) such authorizations, consents, approvals, filings and notices as: (i)
may be required under the Exchange Act and, in the case of the Company, under
the rules and regulations of The Nasdaq Stock Market, Inc., or (ii) have been
obtained, made or given prior to the date hereof.
SECTION 1.2. KELLOGG PERSONS. The Kellogg Persons hereby represent and
warrant to the Company as follows:
(A) The Kellogg Persons have previously disclosed to the
Company, through filings made under the Exchange Act and/or other means: (i) the
names of all Kellogg Group Members, all Kellogg Related Persons and all
Affiliates and Associates of any Kellogg Group Member or Kellogg
<PAGE>
19
Related Person who beneficially own any Common Stock (within the meaning of Rule
13d-3 or Rule 16a-1(a)(2) of promulgated under the Exchange Act), (ii) the
number of shares of Common Stock so beneficially owned by such Persons, and
(iii) for any such shares so beneficially owned that are held of record in a
different name (such as "Cede & Co." or another "street name"), the name of such
record holder;
(B) All schedules, statements or other reports previously
filed by any one or more of the Kellogg Persons in respect of the Company and/or
Common Stock under Section 13 or 16 of the Exchange Act contain all of the
disclosures and information required under the applicable rules and regulations
of the U.S. Securities and Exchange Commission ("SEC"), and such disclosures and
information was, as of the date of the filing thereof with the SEC and the
delivery thereof to the Company, true, correct and complete in all material
respects;
(C) Their becoming "Acquiring Persons" under the Agreement (if
in fact the case) was inadvertent on their part; and their shares of Common
Stock were not acquired and are not held for the purpose of or with the effect
of changing or influencing the control of the Company, or in connection with or
as a participant in any transaction having that purpose or effect; and
(D) The Kellogg Persons acknowledge and agree that: (i) the
representations, warranties, covenants and agreements of the Kellogg Persons
hereunder are a material inducement to the Company's entering into of the Rights
Agreement Amendment; and (ii) in the event of a breach of or default under any
such representations, warranties, covenants or agreements by any of the Kellogg
Persons, the Company may (by the terms of the Rights Agreement Amendment or
otherwise, and without limiting any of the rights or remedies that may be
available to the parties under this Agreement at law or in equity), suspend or
terminate the Kellogg Amendments (as defined in the Rights Agreement Amendment),
terminate the Rights Agreement Amendment or take other actions having the
purpose or effect of modifying or altering the Kellogg Amendments.
ARTICLE 2: KELLOGG PERSONS COVENANTS AND AGREEMENTS
SECTION 2.1. CHANGES IN BENEFICIAL OWNERSHIP. The Kellogg Persons
hereby covenant and agree as follows:
(A) The number of shares beneficially owned by the Kellogg
Group Members and their respective Affiliates and Associates shall at no time
exceed the Kellogg Group Member Limit;
(B) They shall prepare and file with the SEC and deliver to
the Company, in each case on a timely basis, all schedules, statements and other
reports in respect of the Company and/or Common Stock required under Section 13
or 16 of the Exchange Act; such schedules, statements or other reports (as the
case may be) shall contain all of the disclosures and information required under
the applicable rules and regulations of the SEC; and such disclosures and
information shall, as of the date of the filing thereof with the SEC and the
delivery thereof to the Company, be true, correct and complete in all material
respects;
(C) In addition to, and not in limitation of, the obligations
of the Kellogg Persons under the foregoing Section 2.1(B), and without intending
to limit the obligations of the Kellogg Persons under Sections 2.1(D), 2.2(D)
and 2.3, if after the date hereof any Kellogg Group Member, Kellogg Related
Person or any Affiliate or Associate of any Kellogg Group Member or Kellogg
Related Person shall purchase or otherwise acquire, or sell, transfer, assign or
otherwise dispose of, the beneficial ownership of any shares of Common Stock or
other voting securities of the Company ("Other Voting Securities"), one or more
of the Kellogg Persons shall promptly thereafter (but in any event by the
earliest of (x) five business days prior the next ensuing record date for any
vote of, or consent solicitation
<PAGE>
20
with respect to, the Common Stock or such Other Voting Securities, (y) the date
that such purchase, other acquisition, sale, transfer, assignment or other
disposition (as the case may be) shall have first been reported, or shall be
required to be reported, under Section 13 or 16 of the Exchange Act, and (z) the
thirtieth (30th) following such purchase, other acquisition, sale, transfer,
assignment or other disposition (as the case may be)), advise the Company and
AMilley of: (i) the name of the Kellogg Group Member, Kellogg Related Person or
Affiliate or Associate thereof (as the case may be) who effected such
transaction and specifying whether such Person is a Kellogg Group Member, an
Affiliate or Associate of a Kellogg Group Member, a Kellogg Related Person or an
Affiliate or Associate of a Kellogg Group Member, (ii) the nature of such
transaction and the number of shares of Common Stock or Other Voting Securities
(as the case may be) that were the subject thereof, and (iii) the name of the
record holder of such shares of Common Stock or Other Voting Securities (as the
case may be); and
(D) If after the date hereof any Kellogg Group Member, or any
Affiliate or Associate of any Kellogg Group Member, who (in each case) is not
already a "Kellogg Person" party to this Agreement shall purchase or otherwise
acquire the beneficial ownership of any shares of Common Stock or Other Voting
Securities, such Person shall promptly thereafter (but in any event by the
earliest of (x) five business days prior the next ensuing record date for any
vote of, or consent solicitation with respect to, the Common Stock or such Other
Voting Securities, (y) the date that such purchase or other acquisition (as the
case may be) shall have first been reported, or shall be required to be
reported, under Section 13 or 16 of the Exchange Act, and (z) the thirtieth
(30th) following such purchase or other acquisition (as the case may be)) become
a "Kellogg Person" party to this Agreement by executing and delivering to the
Company a Supplement instrument in the form of SCHEDULE A hereto.
SECTION 2.2. IRREVOCABLE PROXY. (A) Each Kellogg Person does hereby
irrevocably constitute and appoint AMilley the attorney-in-fact and proxy of
such Kellogg Person, with full power of substitution, to vote all shares of
Common Stock and Other Voting Securities which such Kellogg Person is entitled
to vote at any annual or special meeting of the stockholders of the Company, and
to express consent or dissent to any corporate action in writing without a
meeting of the stockholders of the Company, in such manner as such AMilley or
the substitute for AMilley (as the case may be, the "Proxyholder") shall in his
discretion determine. The proxy and power of attorney granted pursuant to the
foregoing sentence are hereinafter collectively referred to as the "Instant
Proxy". THE INSTANT PROXY IS COUPLED WITH AN INTEREST, SHALL BE IRREVOCABLE AND
SHALL REVOKE ANY AND ALL PRIOR PROXIES AND POWERS OF ATTORNEY GRANTED BY ANY OF
THE KELLOGG PERSONS IN CONNECTION WITH ANY COMMON STOCK OR OTHER VOTING
SECURITIES. NO KELLOGG PERSON SHALL GRANT ANY PROXY OR POWER OF ATTORNEY TO ANY
PERSON WHICH CONFLICTS WITH THE INSTANT PROXY OR THE VOTING RIGHTS GRANTED
THEREUNDER. ANY ATTEMPT TO DO SO SHALL BE VOID.
(B) FURTHER ACTIONS. In order to further implement and
evidence the Instant Proxy: (i) substantially simultaneously with the execution
and delivery of this Agreement, the Original Kellogg Persons have executed and
delivered to AMilley counterparts of an Irrevocable Proxy instrument in the form
of Schedule B hereto; and (ii) in connection with any particular annual or
special meeting of the stockholders of the Company, or solicitation of written
consents in lieu of any meeting of the stockholders of the Company, the Kellogg
Persons shall execute and deliver in favor of the Proxyholder such other or
additional form of proxy or power of attorney as shall be reasonably required or
requested by the Proxyholder in order to permit the exercise of the voting
rights granted by the Kellogg Persons under this Section at such meeting or in
such solicitation (as the case may be).
(C) ADDITIONAL SHARES. The Instant Proxy covers, in addition
to any and all shares of Common Stock beneficially owned at the date hereof by
the Kellogg Persons (there being no Other Voting Securities presently
outstanding), any and all shares of Common Stock and Other Voting Securities the
beneficial ownership of which are hereafter purchased or otherwise acquired by
any Kellogg Person. The
<PAGE>
21
Instant Proxy in respect of any such subsequently-acquired shares shall not be
diminished or otherwise affected by the fact that such purchase or other
acquisition may be in violation of this Agreement.
(D) KELLOGG RELATED PERSONS. If after the date hereof any
Kellogg Related Person or any Affiliate or Associate of any Kellogg Related
Person that (in each case) is not a "Kellogg Person" party to this Agreement
shall purchase or otherwise acquire the beneficial ownership of any shares of
Common Stock or Other Voting Securities, such Person shall promptly thereafter
(but in any event by the earliest of (x) five business days prior the next
ensuing record date for any vote of, or consent solicitation with respect to,
the Common Stock or such Other Voting Securities, (y) the date that such
purchase or other acquisition (as the case may be) shall have first been
reported, or shall be required to be reported, under Section 13 or 16 of the
Exchange Act, and (z) the thirtieth (30th) following such purchase or other
acquisition (as the case may be)) execute and deliver an instrument reasonably
satisfactory to the Company and AMilley by which the Instant Proxy, the other
provisions of Section 2.2(A)-(C) and Sections 2.3, 2.4 and 4 may be made
applicable to such Kellogg Related Person, Affiliate or Associate (as the case
may be) and any such subsequently-acquired shares of Common Stock or Other
Voting Securities MUTATIS MUTANDIS. For the avoidance of doubt, the foregoing
shall not apply to any shares of Common Stock beneficially owned at the date
hereof by Kellogg Related Persons and their respective Affiliates and Associates
(there being no Other Voting Securities presently outstanding).
SECTION 2.3. RIGHT OF FIRST REFUSAL. (A) If at any time any Kellogg
Person (the "Seller") shall wish to sell, transfer, assign or otherwise dispose
of ("Sell"; and such a sale, transfer, assignment or other disposition, a
"Sale"), any shares of Common Stock or Other Voting Securities beneficially
owned by such Seller (the "Subject Shares"), such Seller shall deliver to the
Milley Person written notice thereof, which notice (a "Pre-Sale Notice") shall
(at a minimum) specify: (i) the identity the Seller and (if different from the
Seller) the record holder of the Subject Shares, (ii) the number of Subject
Shares, (iii) if the Sale is to be effected other than through an open-market
trade, the material terms and conditions of such Sale, and (iv) the price at
which the Seller intends to or is willing to effect such Sale. Such price
specification may be expressed in terms of a minimum price or "at market". If
the Milley Person wishes to purchase such Subject Shares, or to have his
designee effect such purchase, he shall advise the Seller by the next business
day following receipt of the Pre-Sale Notice that he (or his designee) agrees to
purchase the Subject Shares at the price specified in the Pre-Sale Notice. In
the event that the Milley Person (or his designee) shall fail to so advise the
Seller within such one-business-day period, or shall so advise within such time
but shall fail (other than as a result of a default or failure on the part of
the Seller) to settle his purchase of the Subject Shares within ten business
days after his receipt of the Pre-Sale Notice, the Seller shall be free to Sell
the Subject Shares during the 30-day period following its delivery of the
Pre-Sale Notice at a price no less favorable to the Seller than that specified
therein. Any Subject Shares not Sold within such 30-day period shall remain
subject to this Section 2.3.
(B) PERMITTED SALES. The right of first refusal granted under
the foregoing Section 2.3(A) shall not apply in respect of any actual or
proposed Sale: (i) to any Kellogg Group Member, any Kellogg Related Person or
any Affiliate or Associate of any Kellogg Group Member or Kellogg Related
Person, PROVIDED that (x) such Sale shall not result in a violation of this
Agreement or a Distribution Date or Triggering Event under the Rights Agreement,
and (y) without limiting the generality of the foregoing clause (x), the
transferee party to such Sale shall have complied with the Section 2.1(D) or
2.2(D) hereinabove (if and to the extent applicable); (ii) to any Milley Group
Member (as defined in the Rights Agreement) or any Affiliate or Associate of a
Milley Group Member; (iii) to the Company or any subsidiary thereof; (iv) that
is a pledge or hypothecation made or to be made for the benefit of a BONA FIDE
financial institution to secure a bona fide loan or other financial
accommodation; and (v) as a result of any corporate action on the part of the
Company (such as a merger in which the Company does not survive, a
consolidation, or recapitalization or reclassification of shares) beyond the
control of the Kellogg Persons.
<PAGE>
22
SECTION 2.4. OTHER ACTIONS. Each Kellogg Person hereby covenants and
agrees that, unless and to the extent otherwise consented to in writing by the
Company, such Kellogg Person shall not, directly or indirectly (including
through any intermediary):
(A) Solicit proxies with respect to any Common Stock or Other
Voting Securities, actively oppose any action approved by a majority of the
Continuing Directors of the Company, or become a "participant" in any "election
contest" relating to the election of directors of the Company (as such terms are
used in rule 14a-11 of Regulation 14A promulgated under the Exchange Act (or any
comparable or successor rule));
(B) Propose, make or initiate, or solicit stockholders of the
Company for the approval of, one or more stockholder proposals;
(C) Propose, or make, initiate or solicit any proposals from,
or provide any information or participate in any discussions or negotiations
with, or otherwise cooperate in any way with or assist, any Person concerning
any merger, consolidation, other business combination, tender or exchange offer,
recapitalization, liquidation or dissolution or any purchase or other
acquisition or sale or other disposition of assets (other than in the ordinary
course of business) or shares of capital stock of the Company or any of its
subsidiaries or divisions or any similar transaction involving the Company or
any subsidiary or division of the Company or any subsidiary;
(D) Take any other action for the purpose of or with the
effect of changing or influencing the control of the Company, or in connection
with or as a participant in any transaction having that purpose or effect;
(E) Form, join or in any way participate in any "group"
(within the meaning of Section 13(d)(3) of the Exchange Act or Rule 13d-5(b)(i)
promulgated under the Exchange Act) with respect to any securities of the
Company (except a group consisting entirely of Kellogg Group Members, Kellogg
Related Persons, Milley Group Members and/or Affiliates or Associates of any of
the foregoing); or
(F) Induce, attempt to induce, encourage or solicit, or
cooperate with, any other Person to do any of the foregoing.
ARTICLE 3: COMPANY COVENANTS AND AGREEMENTS
The Company hereby covenants and agrees: (i) to execute and deliver,
and to cause the Rights Agent to execute and deliver, the Rights Agreement
Amendment as soon as practicable on or after the date of the execution and
delivery of this Agreement, and (ii) for so long as (x) there shall not be any
breach of or default under this Agreement on the part of any Kellogg Person and
(y) the Kellogg Amendments shall not have been terminated by operation of
Section 2(B) of the Rights Agreement Amendment, and subject to Section 6.8
hereof, to not suspend or terminate any of the Kellogg Amendments, terminate the
Rights Agreement Amendment or take any other action having the purpose or effect
of modifying or altering such the Kellogg Amendments.
ARTICLE 4: REGULATION 13D-G FILINGS
SECTION 4.1. SEPARATE FILINGS. As a result of certain terms of this
Agreement, the Kellogg Persons, any other Person who after the date hereof
grants an Instant Proxy hereunder, the Milley Person and other Milley Group
Members may be deemed to constitute a "group" within the meaning of Section
13(d)(3) of the Exchange Act and Rule 13d-5(b)(i) promulgated under the Exchange
Act. The Kellogg Persons and Milley Person desire that: (i) the Milley Person
satisfy his obligations to prepare and file
<PAGE>
23
schedules in respect of the Company and Common Stock under Regulation 13D-G
under the Exchange Act by filing schedules thereunder that set forth the
disclosures and information required thereunder in respect of the Milley Person
and/or other Milley Group Members and their respective Affiliates and Associates
and not any Kellogg Group Member, Kellogg Related Person or any of their
respective the Affiliates or Associates (each, a "Milley Schedule 13"); and (ii)
the Kellogg Persons satisfy their obligations to prepare and file schedules in
respect of the Company and Common Stock under such Regulation 13D-G by filing
schedules thereunder that set forth the disclosures and information required
thereunder in respect of the Kellogg Persons and/or other Kellogg Group Members
and their respective Affiliates and Associates and not any Milley Group Member
or any Affiliate or Associate thereof (each, a "Kellogg Schedule 13").
SECTION 4.2. CERTAIN DISCLAIMERS. In order to help assure that the
Milley Schedules 13 and Kellogg Schedules 13 do not contain conflicting
disclosures and information with respect to the interrelationship among the
Persons who join in such Milley Schedules 13 (the "Milley Filers"), on the one
hand, and the Persons who join in such Kellogg Schedules 13 (the "Kellogg
Filers"), on the other, the Kellogg Persons and Milley Person hereby covenant
and agree with each other that, unless and to the extent otherwise agreed to by
such parties:
(A) As permitted under Rule 13d-4 promulgated under the
Exchange Act: (i) in any Milley Schedule 13 the Milley Filers shall disclaim
beneficial ownership of any and all equity securities of the Company held by the
Kellogg Filers or any "group" that includes Kellogg Filers, and (ii) in any
Kellogg Schedule 13 the Kellogg Filers shall disclaim beneficial ownership of
any and all equity securities of the Company held by the Milley Filers or any
"group" that includes Milley Filers; and
(B) As permitted under item "(2)" of the "Instructions for
Cover Page" of each of Schedule 13D (Rule 13d-101) and Schedule 13G (Rule
13d-102) promulgated under the Exchange Act: (i) in any Milley Schedule 13 the
Milley Filers shall disclaim membership in any "group" that includes Kellogg
Filers, (ii) in any Kellogg Schedule 13 the Kellogg Filers shall disclaim
membership in any "group" that includes Milley Filers, and (iii) in any Milley
Schedule 13 the Milley Filers, and in any Kellogg Schedule 13 the Kellogg
Filers, shall disclaim that the relationship of the Milley Person and any other
Proxyholder, on the one hand, and the Kellogg Persons, on the other hand, is one
that constitutes or forms a "group" within the meaning of Section 13(d)(3) of
the Exchange Act or Rule 13d-5(b)(1) promulgated thereunder.
The Kellogg Persons hereby make and confirm the foregoing disclaimers
required to be made by the Kellogg Filers, and the Milley Person hereby makes
and confirms the foregoing disclaimers required to be made by the Milley Filers.
ARTICLE 5: INDEMNIFICATION
SECTION 5.1. RIGHT TO INDEMNIFICATION. Peter R. Kellogg (the
"Indemnitor") hereby agrees to indemnify, defend and hold harmless the Company,
AMilley, the other Milley Group Members and their respective officers,
directors, employees, agents, professional advisors and controlling persons (the
"Indemnitees") from and against any and all Losses (as hereinafter defined)
directly or indirectly incurred, suffered, sustained or required to be paid by,
or sought to be imposed upon, any of the Indemnitees as a result of or arising
out of or in connection with: (i) the entering into by the Company of the Rights
Agreement Amendment; (ii) the entering into by the Company and/or AMilley of
this Agreement; and/or (ii) any term or provision of the Rights Agreement
Amendment and/or this Agreement.
SECTION 5.2. DEFENSE OF ACTIONS. The Indemnitor shall have the right to
assume and control the defense of any claim, action, suit, proceeding or
investigation alleged, brought or asserted by any Person (including by or in the
right of the Company) as to which any Indemnitee is entitled to indemnification
<PAGE>
24
hereunder (an "Action") and the right to retain counsel of his choice
(reasonably satisfactory to the Indemnitees) in connection therewith; PROVIDED,
HOWEVER, that if the defendants in any Action include both the Indemnitor and
one or more of the Indemnitees and there exists a conflict of interest which
would prevent counsel retained by the Indemnitor from also representing such
Indemnitee(s), then such Indemnitee(s) shall have the right to select separate
counsel to participate in the defense of such Action on behalf of such
Indemnitee(s). The Indemnitor shall not be liable to the Indemnitees pursuant to
Section 5.1 for any legal fees or disbursements incurred by them in connection
with the defense of any Action subsequent to the time of the Indemnitor's
assumption of the defense thereof. The Indemnitor shall not be entitled to
settle or compromise any Action without the prior written consent of the
Indemnitees (which consent shall not be unreasonably withheld, delayed or
conditioned), unless such settlement or compromise includes the unconditional
general release of all Indemnitees without any liability or other further
obligation on their part. No Indemnitee shall be entitled to settle or
compromise any Action the defense of which (having previously received notice
thereof) the Indemnitor shall have assumed without the prior written consent of
the Indemnitor (which consent shall not be unreasonably withheld, delayed or
conditioned).
SECTION 5.3. "LOSSES" DEFINED. For purposes of this Agreement, the term
"Losses" means and includes all losses, claims, liabilities, judgments, damages
(including without limitation punitive, consequential and special damages
awarded to any third-party claimant), payments, obligations, costs and expenses
(including without limitation any costs of investigation, and any reasonable
legal fees and disbursements incurred in defense of any Action or otherwise in
connection with any alleged or asserted liability, payment or obligation as to
which indemnification may apply hereunder), regardless of whether or not any
liability, payment, obligation or judgment is ultimately imposed against any
Indemnitee and whether or not any Indemnitee is made or becomes party to an
Action in respect thereof, voluntarily or involuntarily.
SECTION 5.4. SURVIVAL. The rights of the Indemnitees under this Section
5 shall survive any termination or expiration of this Agreement; PROVIDED,
HOWEVER, that the right to indemnification under this Section 5 shall not apply
to any Losses suffered, sustained or required to be paid by, or sought to be
imposed upon, any of the Indemnitees as a result of or arising out of or in
connection with any Action (x) that is first brought after the second
anniversary of the date hereof and (y) as to which a separate but substantially
similar or related Actions (whether or not in the same jurisdiction) arising out
of the same general allegations or circumstances shall have not have been
brought on or prior to such second anniversary.
SECTION 5.5. BREACHES AND DEFAULTS. Nothing in this Section 5 shall be
deemed to limit or otherwise affect the rights or remedies of any party hereto
available at law or in equity as a result of or in connection with any breach of
or this Agreement by any other party hereto.
ARTICLE 6: MISCELLANEOUS
SECTION 6.1. TERM AND TERMINATION. This Agreement (including, without
limitation, the Instant Proxy) shall remain in full force and effect for so long
as any Rights are outstanding under the Rights Agreement (before or after any
Distribution Date thereunder); PROVIDED, HOWEVER, that if the Kellogg Amendments
(as defined in the Rights Agreement Amendment) shall terminate by operation of
the Section 2(B) of the Rights Agreement Amendment, then this Agreement
(including the Instant Proxy) shall automatically terminate thereupon. This
Agreement may not otherwise be terminated except in a writing executed by all
the Kellogg Persons then party to this Agreement, AMilley and the Company
(acting with the approval of a majority of the Continuing Directors then in
office).
SECTION 6.2. REMEDIES. The parties hereto acknowledge and agree that
the remedy at law for any breach of their respective obligations hereunder is
and will be insufficient and inadequate and that
<PAGE>
25
the other parties hereto will be entitled to equitable relief (including
specific performance), in addition to remedies at law. Each party hereto hereby
waives the defense that there in an adequate remedy at law in the event of any
action to enforce the provisions of this Agreement, and consents to the remedy
of specific performance.
SECTION 6.3. FURTHER ACTIONS. From time to time after the date hereof,
as and when requested by any party hereto, the other parties hereto shall
execute and deliver, or cause to be executed and delivered, such other and
further agreements, documents and instruments and shall take, or cause to be
taken, such other and further actions, as such party may reasonably request in
order to further effect or evidence the transactions contemplated hereby and/or
to otherwise carry out the intent and purposes of this Agreement.
SECTION 6.4. ENTIRE AGREEMENT. This Agreement (which includes the
Exhibit and Schedules hereto) contains the entire agreement among the parties
hereto with respect to subject matter hereof and supersedes all prior written or
oral agreements and understandings among such parties (or any of them) with
respect to such subject matter.
SECTION 6.5. SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective the
heirs, executors, administrators, personal representatives, successors and
permitted assigns. Neither the Company nor any Kellogg Person may assign any of
its rights or delegate any of his duties under this Agreement without the prior
written consent of the other parties hereto. AMilley may, without the consent of
(but with notice to) the Company and the Kellogg Persons, assign his rights and
delegate its duties under this Agreement to any other Milley Group Member or any
Affiliate or Associate of any Milley Group Member (who shall thereupon become
the "Milley Person" hereunder). Any Proxyholder may exercise its rights of
substitution under the Instant Proxy without the consent of or notice to any
party hereunder.
SECTION 6.6. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.
SECTION 6.7. NOTICES. All notices, consents, requests, demands and
other communications provided for herein or permitted hereunder shall be in
writing and shall be deemed validly given, made, served and received when
delivered (if delivered personally), when telecopied (if telecopied on a
business day and such notice, consent, request, demand or other communication
(as the case may be) shall have been received by the intended recipient's
telecopier machine), on the next succeeding business day (if telecopied on a
non-business day and such notice, consent, request, demand or other
communication (as the case may be) shall have been received by the intended
recipient's telecopier machine)), one business day after being sent (if sent by
overnight delivery service) or three business days after being deposited in the
mails (if sent by registered or certified mail, return receipt requested,
postage prepaid) to the following address or telecopier number:
If to the Company
or Milley Person: 3600 Rio Vista Avenue
Suite A
Orlando, Florida 32805
Telecopier: (407) 849-0625
If to any Kellogg Person: 120 Broadway, 6th Floor
New York, New York 10271
Telecopier: (212) 433-7292
<PAGE>
26
No other method of delivering notices, consents, requests, demands and other
communications shall be precluded. Any party may, by notice to the other parties
hereto, change the address or telecopier number to which notices or other
communications to it are to be delivered, telecopied or sent.
SECTION 6.8. INVALID PROVISIONS. If any covenant, agreement or other
term or provision of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
covenants, agreements and other terms and provisions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this Agreement
to the contrary, if the Instant Proxy and/or any covenant, agreement or other
term or provision of Section 2.4 hereof is held by such a court or other
authority to be invalid, void or unenforceable and the Board of Directors of the
Company determines in its good faith judgment that severing the Instant Proxy or
such covenant, agreement or other term or provision (as the case may be) would
adversely affect the purpose or effect of the Kellogg Amendments, the Board of
Directors of Company may suspend or terminate the Kellogg Amendments to the
extent determined in its good faith judgment.
SECTION 6.9. DESCRIPTIVE HEADINGS; REFERENCES. The Article, Section,
Exhibit and Schedule headings in this Agreement are for convenience of reference
purposes only and shall not control or affect the meaning or construction of any
provision of this Agreement. Article, Section, Exhibit and Schedule references
in this Agreement are to the referenced Articles and Sections of, and Exhibits
and Schedules to, this Agreement, unless the context otherwise requires.
SECTION 6.10. GENDER; SINGULAR AND PLURAL. Words of gender or neuter
may be read as masculine, feminine or neuter, as required or permitted by the
context. Singular and plural forms of defined and other terms herein may be read
as singular or plural, as required or permitted by the context.
SECTION 6.11. WAIVERS AND AMENDMENTS. This Agreement may not be
modified or amended, nor may compliance with any of its terms and conditions be
waived, except in a writing executed by all the Kellogg Persons then party to
this Agreement, AMilley and the Company (acting with the approval of a majority
of the Continuing Directors then in office).
[the remainder of this page is intentionally left blank]
<PAGE>
27
SIGNATURE PAGE
SECTION 6.12. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, which, taken together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY: ORIGINAL KELLOGG PERSONS:
ELXSI CORPORATION
By:___________________________ __________________________________
Title: PETER R. KELLOGG
MILLEY PERSON:
______________________________ __________________________________
ALEXANDER M. MILLEY CYNTHIA K. KELLOGG
ORIGINAL KELLOGG PERSONS:
I.A.T. REINSURANCE SYNDICATE LTD. PETER R. KELLOGG & CYNTHIA
(for itself and on behalf of each of K. KELLOGG FOUNDATION
its subsidiaries holding Common Stock)
By:___________________________ By:__________________________________
Title: Title:
NOM TRUST U/W/O JAMES C.
KELLOGG, III
By:___________________________
Trustee
<PAGE>
28
SCHEDULE A
SUPPLEMENT TO STANDSTILL AGREEMENT
ADDITIONAL KELLOGG PERSON'S AGREEMENT TO BE BOUND
-------------------------------------------------
THIS SUPPLEMENT TO THE STANDSTILL AGREEMENT, dated as of March 16, 1999
(as the same may have been, or from time to time may be, modified, amended,
supplemented and/or restated, the "Agreement"), by and between (1) ELXSI
Corporation, a Delaware corporation (the "Company"), (2) Alexander M. Milley,
(3) the Persons whose names appear on the signature page thereto under the terms
"Original Kellogg Persons", and (4) the other Persons, if any, who subsequently
became party to thereto as "Additional Kellogg Persons". Capitalized terms used
and not defined herein have the respective meanings ascribed to such terms
under, or as provided in, the Agreement.
The Kellogg Persons have executed the Agreement, or by a Supplement
instrument in the form hereof agreed to be bound thereby. The Agreement requires
that if any Kellogg Group Member, or any Affiliate or Associate of any Kellogg
Group Member, who is not already a "Kellogg Person" party to the Agreement shall
purchase or otherwise acquire the beneficial ownership of any shares of Common
Stock or Other Voting Securities, such Person shall promptly, but in any event
within five days, thereafter become a party to the Agreement by executing and
delivering to the Company a Supplement instrument in the form hereof, and
thereby become a "Kellogg Person" party to the Agreement. The undersigned: (A)
is a Kellogg Group Member or an Affiliate or Associate of a Kellogg Group Member
who (prior to the execution and delivery of this Supplement) is not already a
"Kellogg Person" party to the Agreement, and (B) has purchased or otherwise
acquired the beneficial ownership of shares of Common Stock or Other Voting
Securities the details of which (in accordance with Section 2.2(A) of the
Agreement) have been disclosed to the Company.
Accordingly, in consideration of the benefits to be derived and the
conditions and promises contained in the Agreement, the undersigned hereby
adopts and approves the Agreement and acknowledges, covenants and agrees as
follows:
1. The undersigned has read the Agreement and understands its provisions.
2. The undersigned agrees that the undersigned is a "Kellogg Person" party
to, and as such shall hereafter be bound by, the Agreement as though
the undersigned were an original "Kellogg Person" party thereto, and
agrees to observe and comply with all of the terms and provisions
thereof.
3. Without limiting the generality of the foregoing, the undersigned does
hereby:
(A) Make, as of the date hereof, the representations and
warranties made by the Kellogg Persons set forth in Sections
1.1 and 1.2 of the Agreement;
(B) Agree to abide by and comply with the covenants and agreements
of the Kellogg Persons set forth in Articles 2 and 4 of the
Agreement; and
(C) Grant the Instant Proxy and, in connection therewith, has
substantially simultaneously with the execution and delivery
of this Supplement executed and delivered to AMilley
counterparts of an Irrevocable Proxy instrument in the form of
SCHEDULE B to the Agreement.
<PAGE>
29
4. This Supplement shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
IN WITNESS WHEREOF, this Supplement has been executed by the
undersigned as of the date first above written.
Dated:_________________ ADDITIONAL KELLOGG PERSON:
[By:]________________________________
Name/Title:
Accepted:
COMPANY:
ELXSI CORPORATION
By:__________________________
Title:
MILLEY PERSON:
_____________________________
Name:
<PAGE>
30
SCHEDULE B
ELXSI CORPORATION
IRREVOCABLE PROXY
-----------------
THE UNDERSIGNED does hereby irrevocably constitute and appoint
[ALEXANDER M. MILLEY or name of other then "Milley Person"] the attorney-in-fact
and proxy of the undersigned, with full power of substitution, to vote all
shares of Common Stock and other voting securities of ELXSI Corporation, a
Delaware corporation (the "Company"), which the undersigned is entitled to vote
at any annual or special meeting of the stockholders of the Company, and to
express consent or dissent to any corporate action in writing without a meeting
of the stockholders of the Company, in such manner as such attorney-in-fact and
proxy, or the substitute for such attorney-in-fact and proxy, shall in his
discretion determine. The proxy and power of attorney granted pursuant to the
foregoing sentence is hereinafter collectively referred to as the "Instant
Proxy".
THE INSTANT PROXY IS COUPLED WITH AN INTEREST, SHALL BE IRREVOCABLE AND
SHALL REVOKE ANY AND ALL PRIOR PROXIES AND POWERS OF ATTORNEY GRANTED BY THE
UNDERSIGNED IN CONNECTION WITH ANY COMMON STOCK OR OTHER VOTING SECURITIES OF
THE COMPANY.
THE UNDERSIGNED SHALL NOT GRANT ANY PROXY OR POWER OF ATTORNEY TO ANY
PERSON OR ENTITY WHICH CONFLICTS WITH THE INSTANT PROXY OR THE VOTING RIGHTS
GRANTED THEREUNDER. ANY ATTEMPT TO DO SO SHALL BE VOID.
The Instant Proxy shall remain in full force and effect for so long as
any common stock purchase rights (collectively, the "Rights") established under
that certain Rights Agreement, dated as of June 4, 1997 (as the same may have
been, or from time to time may be, modified, amended, supplemented and/or
restated, the "Rights Agreement"), between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"), are outstanding
under the Rights Agreement (before or after any Distribution Date thereunder).
The original Final Expiration Date of the Rights under the Rights Agreement is
June 15, 2007. Such Final Expiration Date may have been extended prior to the
date hereof, and/or such Final Expiration may be extended from time to time
after the date hereof. Certain events may occur that result in the Rights being
no longer outstanding prior to any such Final Expiration. In any event, by
operation of the first sentence of this paragraph THE INSTANT PROXY MAY BE VOTED
OR ACTED UPON MORE THAN THREE YEARS FROM THE DATE HEREOF.
Dated:________________________________________
Signatory:____________________________________
______________________________________________
Signature
______________________________________________
Signature
This Irrevocable Proxy should be signed
exactly as the name(s) appear(s) on the
certificates representing the shares covered
hereby. If stock is held in the names of joint
owners, each should sign. Persons signing as
an attorney, executor, administrator,
guardian, trustee, corporate officer or in any
other fiduciary or representative capacity
should give full title.
<PAGE>
31
EXHIBIT A
[See Exhibit 2]
