As filed with the Securities and Exchange Commission on April 12, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ELXSI Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation or Organization)
77-0151523
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(I.R.S. Employer Identification No.)
3600 Rio Vista Avenue, Suite A, Orlando, Florida 32805
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(Address of Principal Executive Offices)
ELXSI Corporation 1998 Incentive Stock Option Plan
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(Full Title of the Plan)
Alexander M. Milley
President and Chief Executive Officer
3600 Rio Vista Avenue, Suite A
Orlando, Florida 32805
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(Name and Address of Agent For Service)
(407) 849-1090
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(Telephone Number, Including Area Code, of Agent for Service)
Copy to: Claude A. Baum, Esq.
Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
CALCULATION OF REGISTRATION FEE
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Title of Proposed Proposed
Securities Maximum Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
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Common Stock, 75,000 $10.125 $759,375 $211.11
par value $.001
(and associated
Rights)(2)
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(1) This estimate is made solely for the purpose of determining the
amount of the registration fee pursuant to Rule 457(c) under the
Securities Act of 1933 and is based upon the average of the high and
low prices of the Registrant's Common Stock as reported by The
Nasdaq Stock Market on April 7, 1999.
(2) Includes associated rights (the "Rights") to purchase the
Registrant's Common Stock. Until the occurrence of certain
prescribed events, none of which has occurred, the Rights are not
exercisable, are evidenced by the certificates representing such
Common Stock and will be transferred along with and only with such
Common Stock.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Information required by Part I, Item 1 to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance with
the introductory Note to Part I of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Information required by Part I, Item 2 to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance with
the introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of ELXSI Corporation (the "Registrant") and the
1998 Incentive Stock Option Plan are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the Registrant's fiscal
year ended December 31, 1998, including the portions of the
Registrant's Proxy Statement to be filed within 120 days after December
31, 1998 for the 1999 Annual Meeting of Stockholders incorporated by
reference into Part III of such Form 10-K;
(b) The Registrant's Current Report on Form 8-K dated and filed with the
Commission on March 19, 1999);
(c) The description of the Registrant's Common Stock purchase rights
("Rights") in the Registrant's Registration Statement of Form 8-A/A
(Post-Effective Amendment No. 1), dated and filed with the Commission
on March 19, 1999, together with all amendments or reports, if any,
filed for the purpose of updating such description, to the extent of
such updating.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other
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subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
(THE INCLUSION IN THIS REGISTRATION OF THE RESPONSE BELOW TO THIS ITEM 4 IS NOT
BECAUSE THE COMMON STOCK AND RIGHTS ARE NOT REGISTERED UNDER SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.)
CAPITAL STOCK
COMMON AND PREFERRED STOCK
The authorized capital stock of the Registrant consists of 60,000,000
shares of Common Stock, par value $.001 per share ("Common Stock"), and
5,000,000 of shares of preferred stock, par value $.001 per share ("Preferred
Stock").
The Registrant's Certificate of Incorporation authorizes the
Registrant's Board of Directors to provide for the issuance, from time to time,
of Preferred Stock, in one or more series, to fix the number of shares to be
included in each such series and to determine or alter the designations, powers,
preferences and rights of the shares of each such series and any qualifications,
limitations or restrictions thereof. Because the Board of Directors has the
foregoing powers with respect to Preferred Stock, it may afford the holders of
any Preferred Stock preferences, powers and rights (including voting rights and
rights to dividends and distributions upon liquidation) senior to the rights of
the holders of Common Stock, which could adversely affect the rights (including
voting rights and rights to dividends and distributions upon liquidation) of
holders of Common Stock and other Preferred Stock.
Out of the authorized Preferred Stock, the Registrant has designated
604,656 shares as Series A Non-Voting Convertible Preferred Stock, par value
$.001 per share (the "Series A Preferred"). These Series A Preferred shares: (i)
were originally designated for issuance upon exercise of the Registrant's Series
B Warrants issued in January 1990, and (ii) if ever issued, would have been
convertible under certain specified conditions into 241,862 shares of Common
Stock. In December 1996, these Series B Warrants were repurchased by the
Registrant and the 604,656 shares of Series A Preferred were formally declared
by the Board of Directors of the Registrant to have the status of authorized and
unissued shares no longer reserved for issuance (as Preferred Stock) for any
particular purpose, but available for issuance when, if and to the extent
determined by the Board of Directors of the Registrant (or an authorized
committee thereof).
Subject to the rights of holders of Preferred Stock, holders of Common
Stock are entitled to receive dividends when, as and if declared by the Board of
Directors, to share ratably in the assets of the Registrant legally available
for distribution to holders of Common Stock in the event of liquidation and to
one vote per share on all matters to be voted upon by the stockholders. Holders
of Common Stock do not have cumulative voting rights in the election of
directors and have no preemptive, subscription, redemption or conversion rights.
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Each share of Common Stock presently outstanding has, and each share of
Common Stock issued in the future will have, an attached Common Stock purchase
right, which are described in more detail in the "Rights" section hereinbelow.
The transfer agent and registrar for the Registrant's Common Stock is
Continental Stock Transfer & Trust Company (the "Transfer Agent").
BYLAW TRANSFER RESTRICTIONS
At the May 1997 Annual Meeting of Stockholders of the Registrant,
stockholders approved certain amendments to the Registrant's Bylaws (the
"Subject Bylaw Amendments") that impose certain restrictions (the "Transfer
Restrictions") on the transferability of shares of Common Stock, as well as
certain other stock and warrants, options and other rights to purchase stock of
the Registrant (hereinafter, "other equity securities"). The Transfer
Restrictions were proposed by management in order to address the possibility
that certain transfers of Common Stock and other equity securities could result
in the imposition of limitations on the ability of the Registrant and its ELXSI
subsidiary to utilize the net operating loss ("NOL") and other credit or loss
carryforwards available to them, for federal income tax purposes.
The Transfer Restrictions do not apply to issuances of shares of
capital stock by the Registrant. As a result, the Transfer Restrictions do not
prevent the acquisition of shares upon exercise of presently outstanding
employee stock options or warrants of the Registrant. Such acquisitions were
excluded from the operation of the Transfer Restrictions because it was
determined that it is highly unlikely that the issuance of shares of Common
Stock of the Registrant under such circumstances would adversely affect its
NOL's or other tax attributes. In addition, since the Registrant's Board of
Directors will be able to consider the effect on the Registrant's NOL's and
other tax attributes of future issuances of shares of capital stock (and
options, warrants and other rights to purchase or subscribe for shares of
capital stock) of the Registrant at the time of issuance (whether as a result of
transactions with third parties, such as an acquisition for stock (and/or rights
to purchase or subscribe for stock), or the issuance of stock (and/or rights to
purchase or subscribe for stock) in a private placement or public offering, or
as compensation to employees, officers or directors or otherwise) in advance of
agreeing to issue such shares (and/or rights to purchase or subscribe for
stock), future issuances of stock (and/or rights to purchase stock or subscribe
for stock) by the Registrant also have been excluded from the Transfer
Restrictions. Consequently, persons or entities who are able to acquire Common
Stock or other equity securities directly from the Registrant, including
employees, officers and directors of the Registrant and their affiliates, may do
so without application of the Transfer Restrictions, irrespective of the number
of shares (or other units) being acquired.
The Subject Bylaw Amendments added a new Article XV to the Registrant's
Bylaws and established the Transfer Restrictions. Such Bylaws are filed herewith
as Exhibit 4.4, and is hereby incorporated herein by reference. The following
description of the Subject Bylaw Amendments and Transfer Restrictions is
qualified in its entirety by reference to such Exhibit 4.5.
The Transfer Restrictions generally restrict until December 31, 2005
(or earlier, in certain events) any attempted transfer of Common Stock or any
other securities of the Registrant that would be treated as "stock" of the
Registrant under the applicable tax regulations
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(hereinafter, "Company Stock") to a person or group of persons who own, or who
would own as a result of such transfer, 5% or more of the Company Stock. The
Transfer Restrictions also restrict any other attempted transfer of Company
Stock that would result in the identification of a new "5-percent shareholder"
of the Registrant (as determined under applicable tax regulations); this would
include, among other things, an attempted acquisition of Company Stock from an
existing 5-percent shareholder. For these purposes, numerous rules of
attribution, aggregation and calculation prescribed under the Internal Revenue
Code (and related regulations) will be applied in determining whether the 5%
threshold has been met and whether a group exists. The restriction may also
apply to proscribe the creation or transfer of certain "options" (which are
broadly defined) in respect of Company Stock to the extent, generally, that
exercise of the option would result in a proscribed level of Company Stock
ownership.
Generally speaking, the Transfer Restrictions apply only with respect
to the number of shares of Company Stock (or options with respect to Company
Stock) purportedly transferred in excess of the threshold established in the
Transfer Restrictions. In any event, these restrictions do not prevent a valid
transfer if either the transferor or the purported transferee obtains the
approval of the Board of Directors of the Registrant (or a committee thereof
authorized by such Board). In deciding whether to approve any proposed transfer,
the Board of Directors (or such committee) may require an opinion of counsel
that it selects, in form and substance reasonably satisfactory to it, that the
transfer will not result in the application of any Internal Revenue Code Section
382 or Section 383 limitations on the use of the tax benefits.
The Transfer Restrictions generally will remain in effect until
December 31, 2005, unless Article XV (comprising the Subject Bylaw Amendments)
is earlier repealed or its effectiveness is otherwise discontinued by a
resolution adopted by the Board of Directors of the Registrant (or an authorized
committee thereof). The restriction period is based on Section 172 of the
Internal Revenue Code, which permits an NOL carryforward to be carried forward
for a maximum of 15 taxable years following the taxable year in which the loss
arose and, accordingly, is designed to afford full carryforward periods for
NOL's arising through 1990.
The Transfer Restrictions imposed by the Subject Bylaw Amendments
restrict any person or entity (or group thereof) who was not, prior to their
adoption, an owner of 5% or more of the Company Stock from acquiring sufficient
Company Stock to result in such person or entity (or group thereof) to become
the owner of 5% or more of Company Stock, and would prohibit the persons and
entities who were at such time owners of 5% or more of the Company Stock and
5-percent shareholders (as determined under applicable tax regulations) from
increasing their ownership of Company Stock without obtaining the approval of
the Registrant's Board of Directors (or an authorized committee thereof).
The Subject Bylaw Amendments provide for all certificates representing
Company Stock to bear the following legend:
"THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS
SUBJECT TO RESTRICTIONS PURSUANT TO ARTICLE XV OF THE
BYLAWS OF ELXSI CORPORATION, WHICH ARTICLE XV IS
REPRINTED IN ITS ENTIRETY ON THIS CERTIFICATE."
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In addition, as stated in such legend, such certificates will include a full
reprint of the Subject Bylaw Amendments.
The Registrant has been advised by its counsel that, absent a court
determination: (i) there can be no assurance that the Transfer Restrictions will
be enforceable against all of the stockholders of the Registrant, and (ii) the
Transfer Restrictions may not be enforceable against holders of Common Stock
which voted against, or abstained from voting on, the Subject Bylaw Amendments.
However, the Registrant believes that the Transfer Restrictions are in the best
interests of the Registrant and its stockholders and are reasonable; the
Registrant therefore intends to act vigorously to enforce the Transfer
Restrictions against all holders of Common Stock and other equity securities
regardless of how (or whether) they were voted on the Transfer Restrictions. The
Registrant believes that each stockholder who voted in favor of the Subject
Bylaw Amendments or who surrendered or surrenders his or her share certificates
in exchange for a new certificate bearing the above legend will in effect have
consented to the Transfer Restrictions and therefore will be bound thereby. In
such circumstances, the Registrant intends to assert that any such stockholder
would be estopped from challenging the Transfer Restrictions.
Upon the issuance of any new certificates for Company Stock, whether in
connection with a transfer or otherwise, the Registrant intends to place the
above legend thereon. The Transfer Restrictions provide that the Registrant will
not permit any employee or agent of the Registrant (which includes the Transfer
Agent) to record any transfer of Company Stock purportedly transferred in excess
of the threshold established in the Transfer Restrictions. The foregoing may
result in the delay or refusal of certain requested transfers of Company Stock.
The Subject Bylaw Amendments provide that any transfer attempted in
violation of the Transfer Restrictions will be void AB INITIO, even if such
transfer has been recorded by the Transfer Agent and new certificates issued.
The purported transferee of such Company Stock would not be entitled to any
rights of stockholders, including the right to vote such Company Stock, or to
receive dividends or distributions in liquidation in respect thereof, if any.
If the Board of Directors of the Registrant determines that a purported
transfer has violated the Transfer Restrictions, the Registrant will require the
purported transferee to surrender the relevant Company Stock and any dividends
that such purported transferee may have received thereon to an agent to be
designated by the Board of Directors of the Registrant (or an authorized
committee thereof) (the "Agent"). The Agent will thereupon sell the Company
Stock in one or more arm's-length transactions (executed in The NASDAQ Stock
Market, if possible) to a buyer or buyers, which may include the Registrant;
however, nothing shall require the Agent to sell the Company Stock within any
specific time frame if, in the Agent's discretion, such sale would disrupt the
market for Company Stock or have an adverse effect on the value of Company
Stock. If the purported transferee has resold the Company Stock before receiving
the Registrant's demand to surrender such Company Stock, the purported
transferee generally will be required to transfer to the Agent the proceeds of
the sale and any distributions such purported transferee has received on the
Company Stock. After repaying its own expenses and reimbursing the purported
transferee for the price paid for the Company Stock (or, if the purported
transfer to the purported transferee was by gift, inheritance or similar
transfer, the fair market value of the Company Stock), the Agent will pay any
remaining amounts to one or more charities to be selected by the Board of
Directors of the Registrant (or an authorized committee thereof).
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The Transfer Restrictions may have certain "anti-takeover" effects,
inasmuch as they may operate to discourage or prohibit: (i) persons, entities or
"groups" from accumulating in the aggregate 5% or more of the Company Stock;
(ii) persons, entities or "groups" already owning 5% or more of the Company
Stock from acquiring additional Company Stock; and (iii) consequently, persons,
entities or "groups" from accumulating blocks of shares in excess of the number
beneficially owned by Alexander M. Milley, the Registrant's Chairman, President
and Chief Executive Officer. The Transfer Restrictions may thus lessen the
likelihood that a takeover attempt will be made with respect to the Registrant.
The Board of Directors (and any authorized committee thereof) of the
Registrant has the discretion to approve a transfer of Company Stock that would
otherwise violate the Transfer Restrictions. If the Board of Directors decides
to permit a transfer that would otherwise violate the Transfer Restrictions,
that transfer or later transfers may result in an "ownership change" that would
limit the use of the NOL's and other tax attributes of the Registrant and its
subsidiaries.
RIGHTS
The Board of Directors of 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 Registrant 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 Registrant one share of Common Stock
(or in certain circumstances, cash, property, or other securities of the
Registrant) 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 Registrant 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 Registrant 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
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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 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 Registrant, (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 Registrant, 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
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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 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 Registrant, 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 Registrant 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 Registrant) 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 Registrant
consolidates or merges with any other person, and the Registrant is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Registrant where the outstanding shares of
Common Stock of the Registrant are changed into or exchanged for stock, other
securities of the other person, or cash or any other property, and the
Registrant is the surviving corporation, or (iii) 50% or more of the
Registrant's assets or earning power is sold or otherwise transferred, the
Rights Agreements requires that proper provisions be made so that
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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."
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 Registrant. 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 Registrant 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
Registrant 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
Registrant 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 Registrant 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 Registrant
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 Registrant 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 Registrant, including, without limitation, the
right to vote or to receive dividends.
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<PAGE>
Any of the provisions of the Rights Agreement may be amended or
supplemented by the Board of Directors of the Registrant (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
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 Registrant
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 Registrant. However, in the opinion of the Registrant's
management, the Rights will help ensure that the Registrant's stockholders
receive fair and equal treatment in the event of any proposed takeover of the
Registrant. The execution of the Rights Agreement and distribution of the Rights
by the Registrant was not in response to any specific takeover threat or
proposal, but were precautions taken in order to help protect these interests of
the Registrant'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 third paragraph of this "Rights" section) (the "Kellogg Amendments") were
added to the Rights Agreement under the Rights Agreement Amendment. The
determination by the Registrant 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 Registrant, be suspended or
terminated. The remainder of this Item 4 sets forth a brief description of the
Kellogg Standstill Agreement, a conformed copy of which is filed herewith as
Exhibit 4.7 and is hereby incorporated herein by reference. Capitalized terms
used in this part of Item 4 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 Registrant the
names of all Kellogg Group Members, Kellogg Related Persons and Affiliates and
Associates thereof who beneficially own
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<PAGE>
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 Registrant, 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 Registrant's entering into of the Rights Agreement Amendment, and in the
event of a breach of or default thereunder the Registrant 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, 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
Registrant, in each case on a timely basis, all schedules, statements and other
reports in respect of the Registrant 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 Registrant ("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 Registrant,
and to express consent or dissent to any corporate action in writing without a
meeting of the stockholders of the Registrant, 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
Registrant, 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 Registrant, or become a
"participant" in any "election contest" relating to the election of directors of
the Registrant; (b)
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<PAGE>
propose, make or initiate, or solicit stockholders of the Registrant 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 Registrant or any of its subsidiaries or divisions or any similar
transaction involving the Registrant or any subsidiary or division of the
Registrant or any subsidiary; (d) take any other action for the purpose of or
with the effect of changing or influencing the control of the Registrant, 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 Registrant (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
Registrant, 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 Registrant 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 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
LEGAL OPINION
The legality of the shares of Common Stock and Rights offered hereby
has been passed upon for the Registrant by Berlack, Israels & Liberman LLP, 120
West 45th Street, New York, New York 10036.
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<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As provided in Article XI of the Registrant's Bylaws, the Registrant:
(i) shall, to the fullest extent permitted by the Delaware General Corporation
Law, indemnify all its officers and directors, and (ii) shall have the power, to
the fullest extent permitted by the Delaware General Corporation Law, to
indemnify its employees and other agents. The Registrant has obtained a
directors and officers liability insurance policy which insures such persons
against loss arising from certain claims made by reason of their being directors
or officers of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed herewith:
Exhibit No. Description
- ----------- -----------
4.1 Restated Certificate of Incorporation of the Registrant, as
amended. (Incorporated herein by reference to Exhibit 3.1 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989 (file No. 0-11877))
4.2 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated May 27, 1992.
(Incorporated herein by reference to Exhibit 3.2 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 (file No. 0-11877))
4.3 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated May 19, 1998.
(Incorporated herein by reference to Exhibit 3.3 of the
Registrant's Current Report on Form 8-K dated and filed with the
Commission on March 19, 1999 (file No. 0-11877))
4.4 Bylaws of the Registrant (Incorporated herein by reference to
Exhibit 3.3 to the Registrant's Form 8-K Current Report dated
June 24, 1997 and filed with the Commission on June 26, 1997
(File No. 0-11877))
4.5 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))
4.6 Rights Agreement Amendment, dated as of March 16, 1999, between
the Registrant and Continental Stock Transfer & Trust Company,
as Rights Agent (Incorporated herein by reference to Exhibit 2
to the Registrant's Form 8-A/A Registration Statement
(Post-Effective Amendment No. 1) dated and filed with the
Commission on March 19, 1999 (File No. 0-11877))
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<PAGE>
4.7 Standstill Agreement, dated as of March 16, 1999, among the
Registrant, Alexander M. Milley and the "Kellogg Persons" party
thereto (Incorporated herein by reference to Exhibit 3 to the
Registrant's Form 8-A/A Registration Statement (Post-Effective
Amendment No. 1) dated and filed with the Commission on March
19, 1999 (File No. 0-11877))
4.8 ELXSI Corporation 1998 Incentive Stock Option Plan (Incorporated
herein by reference to Annex A to the Registrant's Proxy
Statement included in its Schedule 14A filed with the Commission
on April 17, 1998 (File No. 0-11877))
5.1 Opinion of Berlack, Israels & Liberman LLP
23.1 Consent of Berlack, Israels & Liberman LLP (included in Exhibit
5.1)
23.2 Consent of PricewaterhouseCoopers LLP, independent accountants
24.1 Power of Attorney (included on page 18)
ITEM 9. UNDERTAKINGS.
Undertakings required by Item 512(a) of Regulation S-K
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this registration statement (Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.); and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
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<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
Undertakings required by Item 512(b) of Regulation S-K
- ------------------------------------------------------
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Undertakings required by Item 512(h) of Regulation S-K
- ------------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
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<PAGE>
SIGNATURE
REGISTRANT. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Orlando, Florida on March 26, 1999.
ELXSI CORPORATION
By: /s/ ALEXANDER M. MILLEY
-----------------------
Alexander M. Milley
President and Chief
Executive Officer
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<PAGE>
POWER OF ATTORNEY AND SIGNATURES
Each person whose signature appears below constitutes and appoints
Alexander M. Milley and David M. Doolittle, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ ALEXANDER M. MILLEY Chairman, President and March 26, 1999
- ----------------------- Chief Executive Officer
Alexander M. Milley (Principal Executive
Officer)
/s/ THOMAS R. DRUGGISH Vice President, Treasurer March 26, 1999
- ----------------------- and Secretary (Principal
Thomas R. Druggish Financial and Accounting
Officer)
/s/ ROBERT C. SHAW Director March 26, 1999
- -----------------------
Robert C. Shaw
/s/ FARROKH K. KAVARANA Director March 26, 1999
- -----------------------
Farrokh K. Kavarana
/s/ KEVIN P. LYNCH Director March 26, 1999
- -----------------------
Kevin P. Lynch
/s/ DENIS M. O'DONNELL Director March 26, 1999
- -----------------------
Denis M. O'Donnell
</TABLE>
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<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
4.1 Restated Certificate of Incorporation of the
Registrant, as amended. (Incorporated herein by
reference to Exhibit 3.1 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1989 (file No. 0-11877))
4.2 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated May 27, 1992.
(Incorporated herein by reference to Exhibit 3.2 of
the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (file No.
0-11877))
4.3 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated May 19, 1998.
(Incorporated herein by reference to Exhibit 3.3 of
the Registrant's Current Report on Form 8-K dated and
filed with the Commission on March 19, 1999 (file No.
0-11877))
4.4 Bylaws of the Registrant (Incorporated herein by
reference to Exhibit 3.3 to the Registrant's Form 8-K
Current Report dated June 24, 1997 and filed with the
Commission on June 26, 1997 (File No. 0-11877))
4.5 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))
4.6 Rights Agreement Amendment, dated as of March 16,
1999, between the Registrant and Continental Stock
Transfer & Trust Company, as Rights Agent
(Incorporated herein by reference to Exhibit 2 to the
Registrant's Form 8-A/A Registration Statement
(Post-Effective Amendment No. 1) dated and filed with
the Commission on March 19, 1999 (File No. 0-11877))
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<PAGE>
4.7 Standstill Agreement, dated as of March 16, 1999,
among the Registrant, Alexander M. Milley and the
"Kellogg Persons" party thereto (Incorporated herein
by reference to Exhibit 3 to the Registrant's Form
8-A/A Registration Statement (Post-Effective Amendment
No. 1) dated and filed with the Commission on March
19, 1999 (File No. 0-11877))
4.8 ELXSI Corporation 1998 Incentive Stock Option Plan
(Incorporated herein by reference to Annex A to the
Registrant's Proxy Statement included in its Schedule
14A filed with the Commission on April 17, 1998 (File
No. 0-11877))
5.1 Opinion of Berlack, Israels & Liberman LLP 21
23.1 Consent of Berlack, Israels & Liberman LLP (included
in Exhibit 5.1) 21
23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants 23
24.1 Power of Attorney (included on page 18)
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[Berlack, Israels & Liberman LLP Letterhead]
April 12, 1999
ELXSI Corporation
3600 Rio Vista Avenue
Suite A
Orlando, Florida 32805
Form S-8 Registration Statement
-------------------------------
Dear Sirs:
We refer you to the Registration Statement on Form S-8 dated March 31,
1999 (the "Registration Statement") of ELXSI Corporation, a Delaware corporation
(the "Company"), under which the Company is registering under the Securities Act
of 1933, as amended (the "Act"): (i) 75,000 shares (the "Plan Shares") of its
Common Stock, par value $.001 per share, issuable upon exercise of the options
("Plan Options") granted under the Company's 1998 Incentive Stock Option Plan
(the "Plan"), and (ii) 75,000 associated Common Stock purchase rights ("Plan
Rights") established under that certain Rights Agreement, dated as of June 4,
1997, as amended (the "Rights Agreement"), between the Company and Continental
Stock Transfer & Trust Company, as Rights Agent.
We have familiarized ourselves with such corporate affairs of the
Company and have examined such corporate documents and other records as we have
deemed necessary to provide a basis for the opinions expressed hereinbelow. In
connection therewith, we have examined the originals or photostatic, facsimile,
conformed or certified copies of the Plan, the Rights Agreement and such
certificates of officers of the Company and other documents, records and
instruments as we have deemed relevant and necessary for purposes of rendering
such opinions. In our examination, we have assumed and relied upon the
genuineness of all signatures, the authenticity of all certificates, documents,
instruments and records submitted to us as originals and the conformity to the
originals of all photocopies and facsimile and conformed copies of all
certificates, documents, instruments and records examined by us. In our
examination of such certificates, documents, instruments and records, we have
also assumed and relied upon: (a) the correctness of the factual information
contained therein, (b) the authority of all persons executing documents,
agreements, instruments, certificates and letters, and (c) the legal capacity of
all persons executing documents, agreements, instruments, certificates and
letters.
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<PAGE>
We are members of the Bar of the State of New York and do not purport
to be expert in, and express no opinions with respect to, the laws of any
jurisdiction other than the federal laws of the United States of America, the
laws of the State of New York and, to the extent necessary to render the
opinions expressed hereinbelow, the General Corporation Law of the State of
Delaware.
To the extent that the opinions hereinafter expressed relate to actions
and events that are to be performed or may take place in the future, such
opinions are generally qualified in that they are based on facts and conditions
presently prevailing and laws and regulations presently in effect.
Based upon and subject to the foregoing, we are of the opinion that,
when issued and delivered upon exercise of Plan Options in accordance with the
terms of the Plan: (i) the Plan Shares will be legally issued, fully paid, and
non-assessable shares of the capital stock of the Company, and (ii) the Plan
Rights will be legally issued and binding obligations of the Company.
We hereby consent to the filing of this opinion letter as an Exhibit
to, and to the reference to us under the heading "Legal Opinion" in, the
Registration Statement. In giving such consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the Act
and the rules and regulations thereunder.
Very truly yours,
/s/ BERLACK, ISRAELS & LIBERMAN LLP
-----------------------------------
BERLACK, ISRAELS & LIBERMAN LLP
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CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 12, 1999, which appears on page
F-1 of ELXSI Corporation's Annual Report on Form 10-K, for the year ended
December 31, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Orlando, Florida
April 9, 1999
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