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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
NAI TECHNOLOGIES, INC.
(Name of Issuer)
Common Stock, $.10 par value
(Title of Class of Securities)
62872H 10 7
(CUSIP Number)
Charles S. Holmes
P.O. Box 2850
Southampton, NY 11969
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 9, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
(Continued on following page(s))
Page 1 of 20 Pages
Exhibit Index Appears on Page 6
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CUSIP No. 62872H 10 7 Page 2 of 20 Pages
<TABLE>
<S> <C> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Charles S. Holmes
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS n/a
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A.
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NUMBER 7 SOLE VOTING POWER 3,000,000* shares
OF ---------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED ---------------------------------------------------------
BY
EACH 9 SOLE DISPOSITIVE POWER 3,000,000* shares
REPORTING ---------------------------------------------------------
PERSON
WITH 10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 3,000,000* shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.7%*
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14 TYPE OF REPORTING PERSON IN
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* See Item 5 hereof.
</TABLE>
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Item 1. Security and Issuer.
This Statement on Schedule 13D relates to shares of Common
Stock, par value $.10 per share (the "Common Stock"), of NAI Technologies, Inc.,
a New York corporation (the "Company"), whose principal executive offices are
located at 2405 Trade Centre Avenue, Longmont, Colorado 80503.
Item 2. Identity and Background.
(a)-(c) This Statement is filed by Charles S. Holmes, the
President and sole stockholder of Asset Management Associates of New York, Inc.,
a New York based firm specializing in acquisitions of manufacturing businesses,
whose executive office is located at P.O. Box 2850, Southampton, New York 11969.
(d)-(f) During the five years prior to the date hereof, Mr.
Holmes has not been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, as a result of which
he was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws. Mr.
Holmes is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
By notice, and pursuant to an agreement with the Company,
dated May 9, 1996, Mr. Holmes (i) exercised his right to convert the 12%
Convertible Subordinated Promissory Note due 2001 of the Company in the
aggregate unpaid principal amount of $2,000,000 held by him (the "Note") into
1,000,000 shares (the "Shares") of Common Stock of the Company as provided in
Section 6 of the Note and (ii) was granted warrants to purchase 300,000 shares
of Common Stock of the Company at any time and from time to time on or before
February 15, 2002 at an exercise price of $3.00 per share, subject to adjustment
in certain events (the "New Warrants") by the Company. No additional funds were
used by Mr. Holmes for the conversion of the Note or the acquisition of the New
Warrants.
Item 4. Purpose of the Transaction.
Mr. Holmes converted the Note to enable the Company to
achieve recompliance with the Net Tangible Asset Requirement of
The Nasdaq Stock Market ("Nasdaq"). In consideration for
converting the Note, the Company granted Mr. Holmes the New
Warrants.
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Reference is hereby made to Item 6 hereof for a description of
certain contracts, arrangements, understandings and relationships relating to
the Company's securities.
Although Mr. Holmes has not formulated any definitive plans
not set forth herein, he may from time to time continue to acquire, or to
dispose of, the Shares, the Warrants, Common Stock and/or other securities of
the Company if and when he deems it appropriate. He may formulate other
purposes, plans or proposals relating to any of such securities of the Company
to the extent he deems it advisable in light of market conditions, investment
policies and other factors.
On May 3, 1996, the Board of Directors of the Company,
including Mr. Holmes, authorized to submit for shareholder approval an amendment
to the Company's Restated Certificate of Incorporation providing for a staggered
Board of Directors containing two classes, with one class having three members
and the other class having four members. The directors in each class generally
are to serve a two year term from the date of their election, at an annual
meeting, by the shareholders of the Company. If such amendment is approved by
the shareholders of the Company, it may have the effect of discouraging attempts
by persons or groups to take control of the Company.
Except as indicated in this Schedule 13D, Mr. Holmes currently
has no specific plans or proposals that relate to or would result in any of the
matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of May 24, 1996, the Company had a total of 8,459,437
shares of Common Stock issued and outstanding (including the Shares). As a
result of the conversion of the Note, Mr Holmes is the "beneficial owner", as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the rules and regulations thereunder, of 1,000,000 shares of
Common Stock of the Company (referred to elsewhere herein as the "Shares"),
constituting 11.8% of the Company's total outstanding shares of Common Stock.
In connection with the Company's Private Placement discussed
in Item 6 of the Statement on Schedule 13D dated February 15, 1996, Mr. Holmes
purchased the Note and warrants to purchase 500,000 shares of Common Stock of
the Company on or before February 15, 2002 at an exercise price of $2.50 per
share, subject to adjustment in certain events (the "Warrants"). In addition,
the Company granted to Mr. Holmes additional warrants to purchase 1,200,000
shares of Common Stock of the Company on or before February 15, 2002 at an
exercise price of $2.50 per share,
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subject to adjustment in certain events, for past advisory services in
connection with the Private Placement and the engagement of Commonwealth
Associates as the Company's placement agent (the "Additional Warrants"). As
previously stated, the Company also granted to Mr. Holmes the New Warrants in
connection with the conversion of the Note into the Shares. The Warrants,
Additional Warrants and New Warrants are sometimes collectively referred to as
the "Investment Warrants."
As a result of the ownership by Mr. Holmes of the Investment
Warrants, Mr. Holmes currently may be deemed to own beneficially 2,000,000
additional shares of Common Stock, which combined with the Shares constitute
28.7% of the Company's total outstanding shares of Common Stock, as determined
in accordance with Rule 13d-3 of the Exchange Act.
It should be noted that, as a result of certain provisions in
the Investment Warrants, the number of shares of Common Stock which Mr. Holmes
may be entitled to receive upon exercise of the Investment Warrants is subject
to change.
Except as set forth in Item 5(a), Mr. Holmes does not own any
shares of Common Stock of the Company and is not the "beneficial owner" of any
such shares, as such term is defined in the Exchange Act or the rules and
regulations thereunder.
(b) Mr. Holmes possesses the sole power to vote and dispose
of, and to direct the voting and disposition of, the Shares as a result of the
conversion of the Note into the Shares.
Except as set forth in the immediately preceding paragraph Mr.
Holmes does not possess the power to vote or dispose of any shares of Common
Stock of the Company unless the Investment Warrants are exercised for shares of
Common Stock of the Company, which Mr. Holmes has no current intention of doing.
Only in the event of such exercise may Mr. Holmes be deemed to have the sole
power to vote and dispose of, and to direct the voting and disposition of, the
shares of Common Stock referenced above.
(c) Except as set forth herein, Mr. Holmes does not
beneficially own any shares of Common Stock of the Company and has not engaged
in any transaction in any such shares during the sixty day period immediately
preceding the date hereof.
(d) & (e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
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On May 9, 1996, the Company entered into an agreement with Mr.
Holmes, a member of the Company's Board of Directors, which provided that in
consideration of his converting the 12% Convertible Subordinated Promissory Note
due 2001 of the Company in the aggregate unpaid principal amount of $2,000,000
held by him into 1,000,000 shares of Common Stock of the Company as provided in
Section 6 of the Note (the "Conversion") which enabled the Company to achieve
recompliance with the Net Tangible Asset Requirement of Nasdaq, the Company
would immediately grant Mr. Holmes warrants to purchase 300,000 shares of Common
Stock at any time and from time to time on or before February 15, 2002 at an
exercise price of $3.00 per share, subject to adjustment in certain events
(referred to elsewhere herein as the "New Warrants"). On that same date, Mr.
Holmes advised the Company in writing that he was exercising his right to
convert the Note into the Shares. The Conversion was completed on May 22, 1996
after the Company received oral advice from Nasdaq that its securities would
continue to be listed in the Nasdaq National Market and is deemed effective as
of May 9, 1996.
Pursuant to the terms of the New Warrants, the number of
shares of Common Stock to be received upon exercise are subject to adjustment
upon the occurrence of certain events. As a result of such provisions, the
number of shares of Common Stock which Mr. Holmes may be entitled to receive
upon exercise of the New Warrants is subject to change.
Except as described herein and in the Statement on Schedule
13D dated February 15, 1996, Mr. Holmes has no other contracts, arrangements,
understandings or relationships with any persons with respect to any securities
of the Company. Mr. Holmes reserves the right to enter into any such contracts,
arrangements, understandings or relationships in the future.
Item 7. Material to be Filed as Exhibits.
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<CAPTION>
Exhibit No. Description Page
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<S> <C> <C>
1 Letter Agreement, dated May 9, 1996,
between the Company and Mr. Holmes. 8
2 Notice of Exercise, dated May 9, 1996,
from Mr. Holmes to the Company. 9
3 Warrant registered in the name of Mr.
Holmes to Purchase 300,000 shares of
Common Stock of the Company on or
before February 15, 2002. 10
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: May 28, 1996
/s/ Charles S. Holmes
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Charles S. Holmes
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Exhibit 1
NAI TECHNOLOGIES, INC.
2405 Trade Centre Avenue
Longmont, Colorado 80503
May 9, 1996
Mr. Charles S. Holmes
P.O. Box 2850
Southampton, New York 11969
Re: NAI Technologies, Inc. 12%
Convertible Subordinated
Promissory Notes
----------------------------
Dear Charlie:
Reference is made to the 12% Convertible Subordinated
Promissory Note due 2001 of NAI Technologies, Inc. (the "Company") in the
aggregate unpaid principal amount of $2,000,000 (the "Note") held by you. In
consideration of your converting such Note into 1,000,000 shares (the
"Conversion Shares") of common stock, par value $.10 per share (the "Common
Stock"), of the Company as provided in Section 6 of the Note which will enable
the Company to achieve recompliance with the Net Tangible Asset Requirement of
The Nasdaq Stock Market ("Nasdaq"), the Company agrees to immediately grant you
warrants to purchase 300,000 shares of Common Stock at any time and from time to
time on or before February 15, 2002 at an exercise price of $3.00 per share,
subject to adjustment in certain events. Such warrants will not contain the
EBITDA adjustment to the exercise price but will otherwise be similar to the
warrants purchased by you with your Note and will be delivered to you as soon as
practicable.
If the foregoing is acceptable to you, please so indicate by
signing your name in the space provided below.
Very truly yours,
NAI TECHNOLOGIES, INC.
By: /s/ Robert A. Carlson
---------------------------
Robert A. Carlson
Chairman and Chief
Executive Officer
Accepted and agreed as of
the date first above written:
/s/ Charles S. Holmes
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Charles S. Holmes
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Exhibit 2
CHARLES S. HOLMES
P.O. Box 2850
Southampton, New York 11969
May 9, 1996
NAI Technologies, Inc.
2405 Trade Centre Avenue
Longmont, Colorado 80503
Attention: Secretary
Re: NAI Technologies, Inc. 12%
Convertible Subordinated
Promissory Notes
------------------------------
Gentlemen:
Please be advised that I am hereby exercising my right to
convert the 12% Convertible Subordinated Promissory Note due 2001 of NAI
Technologies, Inc. (the "Company") in the aggregate unpaid principal amount of
$2,000,000 (the "Note") held by me, in its entirety, into 1,000,000 shares (the
"Conversion Shares") of common stock, par value $.10 per share (the "Common
Stock"), of the Company as provided in Section 6 of the Note. In order to effect
such conversion, I have enclosed my original Note herewith.
I understand that I will receive a check representing the
interest on the Note from April 15, 1996 to the date hereof together with a
stock certificate for the Conversion Shares which will contain the legends set
forth in Section 12(c) of the Note until such time as the Company's registration
statement with respect to the Notes and the underlying shares of Common Stock
becomes effective. In connection with the issuance of the Conversion Shares and
as required by Section 12(c) of the Note, I hereby reconfirm my investment
intent with respect to the Conversion Shares as represented in Sections 12(a)
and (b) of the Note.
Very truly yours,
/s/ Charles S. Holmes
-------------------------
Charles S. Holmes
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Exhibit 3
NO. B-062 300,000 SHARES
NAI TECHNOLOGIES, INC.
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
FOR VALUE RECEIVED, NAI TECHNOLOGIES, INC., a New York
corporation (the "Company"), hereby agrees to sell upon the terms and on the
conditions hereinafter set forth, but no later than 5:30 p.m., New York City
time, on the Expiration Date (as hereinafter defined) to CHARLES S. HOLMES, or
registered assigns (the "Holder"), under the terms as hereinafter set forth,
Three Hundred Thousand (300,000) fully paid and non-assessable shares of the
Company's Common Stock, par value $.10 per share (the "Warrant Stock"), at a
purchase price per share of Three and 00/100 Dollars ($3.00) (the "Warrant
Price"), pursuant to this warrant (this "Warrant"). The number of shares of
Warrant Stock to be so issued and the Warrant Price are subject to adjustment in
certain events as hereinafter set forth. The term "Common Stock" shall mean,
when used herein, unless the context otherwise requires, the stock and other
securities and property at the time receivable upon the exercise of this
Warrant.
1. Exercise of Warrant.
(a) The Holder may exercise this Warrant according to
its terms by surrendering this Warrant to the Company at the address set forth
in Section 11, the subscription form attached hereto having then been duly
executed by the Holder, accompanied by cash, certified check or bank draft in
payment of the purchase price, in lawful money of the United States of America,
for the number of shares of the Warrant Stock specified in the subscription
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form, or as otherwise provided in this Warrant prior to 5:30 p.m., New York City
time, on February 15, 2002 (the "Expiration Date").
(b) This Warrant may be exercised in whole or in part
so long as any exercise in part hereof would not involve the issuance of
fractional shares of Warrant Stock. If exercised in part, the Company shall
deliver to the Holder a new Warrant, identical in form, in the name of the
Holder, evidencing the right to purchase the number of shares of Warrant Stock
as to which this Warrant has not been exercised, which new Warrant shall be
signed by the Chairman and Chief Executive Officer or the President and the
Secretary or the Assistant Secretary of the Company. The term Warrant as used
herein shall include any subsequent Warrant issued as provided herein.
(c) No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. The Company
shall pay cash in lieu of fractions with respect to this Warrant based upon the
fair market value of such fractional shares of Common Stock (which shall be the
closing price of such shares on the exchange or market on which the Common Stock
is then traded) at the time of exercise of this Warrant.
(d) In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the Warrant Stock
so purchased, registered in the name of the Holder, shall be delivered to the
Holder within a reasonable time after such rights shall have been so exercised.
The person or entity in whose name any certificate for the Warrant Stock is
issued upon exercise of the rights represented by this Warrant shall for all
purposes be deemed to have become the holder of record of such shares
immediately prior to the close of business on the date on which the Warrant was
surrendered and payment of the Warrant Price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder of
such shares at the opening of business on the next succeeding date on which the
stock transfer books are open. Except as provided in Section 4 hereof, the
Company shall pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.
2. Disposition of Warrant Stock and Warrant.
(a) The Holder hereby acknowledges that this Warrant
and any Warrant Stock purchased pursuant hereto are not being registered (i)
under the Act on the ground that the issuance of this Warrant is exempt from
registration under Section 4(2) of the Act as not involving any public offering
or (ii) under any applicable state securities law because the issuance of this
Warrant does not involve any public offering; and that the Company's reliance on
the Section 4(2) exemption of the Act and under applicable state securities laws
is predicated in part on the representations hereby made to the Company by the
Holder that it is acquiring this
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Warrant and will acquire the Warrant Stock for investment for its own account,
with no present intention of dividing its participation with others or reselling
or otherwise distributing the same, subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be within its
control.
The Holder hereby agrees that it will not sell or transfer all
or any part of this Warrant and/or Warrant Stock unless and until it shall first
have given notice to the Company describing such sale or transfer and furnished
to the Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
(b) If, at the time of issuance of the shares
issuable upon exercise of this Warrant, no registration statement is in effect
with respect to such shares under applicable provisions of the Act, the Company
may at its election require that the Holder provide the Company with written
reconfirmation of the Holder's investment intent and that any stock certificate
delivered to the Holder of a surrendered Warrant shall bear legends reading
substantially as follows:
"TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT
PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE
COMPANY. COPIES OF THOSE RESTRICTIONS ARE ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY, AND NO TRANSFER OF SUCH
SHARES OR OF THIS CERTIFICATE, OR OF ANY SHARES OR OTHER
SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR
OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE UNLESS AND
UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL HAVE
BEEN COMPLIED WITH."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF
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COUNSEL SATISFACTORY TO THE ISSUER OF THIS
CERTIFICATE THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT."
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
3. Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance upon the exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance thereof, other
than taxes, if any, in respect of any transfer occurring contemporaneously with
such issuance and other than transfer restrictions imposed by federal and state
securities laws.
4. Exchange, Transfer, Assignment or Loss of Warrant. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other Warrants of different denominations, entitling
the Holder or Holders thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to
the Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
5. Capital Adjustments. This Warrant is subject to the
following further provisions:
(a) Recapitalization, Reclassification and
Succession. If any recapitalization of the Company or reclassification of its
Common Stock or any merger or consolidation of the Company into or with a
corporation or other business entity, or the sale or transfer of all or
substantially all of the Company's assets or of any successor corporation's
assets to any other corporation or business entity (any such corporation or
other business entity being included within the meaning of the term "successor
corporation") shall be effected, at any
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time while this Warrant remains outstanding and unexpired, then, as a condition
of such recapitalization, reclassification, merger, consolidation, sale or
transfer, lawful and adequate provision shall be made whereby the Holder of this
Warrant thereafter shall have the right to receive upon the exercise hereof as
provided in Section 1 and in lieu of the shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant, such shares of capital
stock, securities or other property as may be issued or payable with respect to
or in exchange for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore issuable upon the
exercise of this Warrant had such recapitalization, reclassification, merger,
consolidation, sale or transfer not taken place, and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.
(b) Subdivision or Combination of Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
subdivide or combine its Common Stock, the number of shares of Warrant Stock
purchasable upon exercise of this Warrant and the Warrant Price shall be
proportionately adjusted.
(c) Stock Dividends and Distributions. If the Company
at any time while this Warrant is outstanding and unexpired shall issue or pay
the holders of its Common Stock, or take a record of the holders of its Common
Stock for the purpose of entitling them to receive, a dividend payable in, or
other distribution of, Common Stock, then (i) the Warrant Price shall be
adjusted in accordance with Section 5(e) and (ii) the number of shares of
Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock that Holder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto.
(d) Stock and Rights Offering to Shareholders. If at
any time after the date of issuance of this Warrant, the Company shall issue or
sell, or fix a record date for the purposes of entitling holders of its Common
Stock to receive, (i) Common Stock or (ii) rights, options or warrants entitling
the holders thereof to subscribe for or purchase Common Stock (or securities
convertible or exchangeable into or exercisable for Common Stock), in any such
case, at a price per share (or having a conversion, exchange or exercise price
per share) that is less than the closing price per share of the Company's Common
Stock on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or traded on any such exchange,
on the National Market System (the "National Market System") of The Nasdaq Stock
Market, Inc. ("Nasdaq"), or if not listed or traded on any such exchange or
system, the average of the bid and asked price per share on Nasdaq or, if such
quotations are not available, the fair market value per share of the Company's
Common Stock as reasonably determined by the Board of Directors of the Company
(the "Closing Price") on the date of such issuance or sale or on such record
date then, immediately after the date of such issuance or sale or on such record
date, (x) the Warrant Price shall be adjusted in accordance with Section 5(e),
and (y) the number of shares of Warrant Stock purchasable upon exercise of this
Warrant shall
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be adjusted to that number determined by multiplying the number of shares of
Warrant Stock purchasable upon exercise of this Warrant immediately before the
date of such issuance or sale or such record date by a fraction, the denominator
of which will be the number of shares of Common Stock outstanding on such date
plus the number of shares of Common Stock that the aggregate offering price of
the total number of shares so offered for subscription or purchase (or the
aggregate initial conversion price, exchange price or exercise price of the
convertible securities or exchangeable securities or rights, options or
warrants, as the case may be, so offered) would purchase at such Closing Price,
and the numerator of which will be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible or
exchangeable securities or rights, options or warrants so offered are initially
convertible or exchangeable or exercisable, as the case may be).
If the Company shall at any time after the date of
issuance of this Warrant distribute to all holders of its Common Stock any
shares of capital stock of the Company (other than Common Stock) or evidences of
its indebtedness or assets (excluding cash dividends or distributions paid from
retained earnings or current year's or prior year's earnings of the Company) or
rights or warrants to subscribe for or purchase any of its securities (excluding
those referred to in the immediately preceding paragraph) (any of the foregoing
being hereinafter in this paragraph called the "Securities"), then in each such
case, the Company shall reserve shares or other units of such securities for
distribution to the Holder upon exercise of this Warrant so that, in addition to
the shares of the Common Stock to which such Holder is entitled, such Holder
will receive upon such exercise the amount and kind of such Securities which
such Holder would have received if the Holder had, immediately prior to the
record date for the distribution of the Securities, exercised this Warrant.
(e) Warrant Price Adjustment. Whenever the number of
shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted,
as herein provided, the Warrant Price payable upon the exercise of this Warrant
shall be adjusted to that price determined by multiplying the Warrant Price
immediately prior to such adjustment by a fraction (i) the numerator of which
shall be the number of shares of Warrant Stock purchasable upon exercise of this
Warrant immediately prior to such adjustment, and (ii) the denominator of which
shall be the number of shares of Warrant Stock purchasable upon exercise of this
Warrant immediately thereafter.
(f) Intentionally Omitted.
(g) Certain Shares Excluded. The number of shares of
Common Stock outstanding at any given time for purposes of the adjustments set
forth in this Section 5 shall exclude any shares then directly or indirectly
held in the treasury of the Company.
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(h) Deferral and Cumulation of De Minimis
Adjustments. The Company shall not be required to make any adjustment pursuant
to this Section 5 if the amount of such adjustment would be less than one
percent (1%) of the Warrant Price in effect immediately before the event that
would otherwise have given rise to such adjustment. In such case, however, any
adjustment that would otherwise have been required to be made shall be made at
the time of and together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall amount to not less
than one percent (1%) of the Warrant Price in effect immediately before the
event giving rise to such next subsequent adjustment.
(i) Duration of Adjustment. Following each
computation or readjustment as provided in this Section 5, the new adjusted
Warrant Price and number of shares of Warrant Stock purchasable upon exercise of
this Warrant shall remain in effect until a further computation or readjustment
thereof is required.
6. Notice to Holders.
(a) Notice of Record Date. In case:
(i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at
the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend (other than
a cash dividend payable out of earned surplus of the Company)
or other distribution, or any right to subscribe for or
purchase any shares of stock of any class or any other
securities, or to receive any other right;
(ii) of any capital reorganization of the
Company, any reclassification of the capital stock of the
Company, any consolidation with or merger of the Company into
another corporation, or any conveyance of all or substantially
all of the assets of the Company to another corporation; or
(iii) of any voluntary dissolution,
liquidation or winding-up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for
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securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution or winding-up.
Such notice shall be mailed at least thirty (30) days prior to the record date
therein specified, or if no record date shall have been specified therein, at
least thirty (30) days prior to such specified date.
(b) Certificate of Adjustment. Whenever any
adjustment shall be made pursuant to Section 5 hereof, the Company shall
promptly make a certificate signed by its Chairman and Chief Executive Officer,
its President or a Vice President and by its Treasurer or Assistant Treasurer or
its Secretary or Assistant Secretary, setting forth in reasonable detail the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant after giving effect
to such adjustment, and shall promptly cause copies of such certificates to be
mailed (by first class mail, postage prepaid) to the Holder of this Warrant.
7. Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company and, in the case of mutilation, upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof, without expense to the Holder, a new Warrant of like tenor dated the
date hereof.
8. Warrant Holder Not a Shareholder. The Holder of this
Warrant, as such, shall not be entitled by reason of this Warrant to any rights
whatsoever as a shareholder of the Company.
9. Registration Rights. This Warrant and the shares of Common
Stock issuable upon exercise of this Warrant will be accorded the registration
rights under the Act set forth in that certain Registration Rights Agreement
between the Company and the Holder.
10. Intentionally Omitted
11. Notices. Any notice required or contemplated by this
Warrant shall be deemed to have been duly given if transmitted by registered or
certified mail, return receipt requested, to the Company at 2405 Trade Centre
Avenue, Longmont, Colorado 80503, Attention: President, or to the Holder at the
name and address set forth in the Warrant Register maintained by the Company.
12. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR
ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Company has duly caused this Warrant
to be signed on its behalf, in its corporate name and by its duly authorized
officer, as of this 9th day of May, 1996.
NAI TECHNOLOGIES, INC.
By:
-----------------------------
Richard A. Schneider
Executive Vice President,
Treasurer and Secretary
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SUBSCRIPTION FORM
The undersigned, the Holder of the attached Warrant, hereby
irrevocably elects to exercise purchase rights represented by such Warrant for,
and to purchase thereunder, the following number of shares of Common Stock of
NAI TECHNOLOGIES, INC.:
Number of Shares Purchase Price Per Share
---------------- ------------------------
The undersigned herewith makes payment of $_____________
therefor, and requests that certificates for such shares (and any warrants or
other property issuable upon such exercise) be issued in the name of and
delivered to _______________ whose address is ________________________________
(social security or taxpayer identification number _________________) and, if
such shares shall not include all of the shares issuable under such warrant,
that a new warrant of like tenor and date for the balance of the shares issuable
thereunder be delivered to the undersigned.
HOLDER:
-----------------------------
Signature
-----------------------------
Signature, if jointly held
-----------------------------
Date
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________________________________________
hereby sells, assigns and transfers unto
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Social Security or Taxpayer Identification Number ______________________________
the right to purchase shares of Common Stock of NAI TECHNOLOGIES, INC., a New
York corporation, represented by this Warrant to the extent of shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint _____________________________, Attorney, to transfer the same on the
books of the Company with full power of substitution in the premises.
DATED:
---------------------
-----------------------------
Signature
-----------------------------
Signature, if jointly held
Witness:
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