Electronically transmitted to the Securities and Exchange Commission on November
4, 1998 Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________________________
Ampex Corporation
(Exact name of Registrant as specified in its charter)
_______________________________
Delaware 13-3667696
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number)
500 Broadway
Redwood City, CA 94063-3199
(650) 367-2011
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
JOEL D. TALCOTT, Esq.
500 Broadway
Redwood City, CA 94063-3199 (650) 367-3330
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
With a copy to:
DAVID D. GRIFFIN, Esq.
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
_______________________________
Approximate date of commencement of proposed sale to public: From time to time
following the effectiveness of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If the securities being registered on the Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.|X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
_________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
===========================================================================================================
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to be Offering Price Aggregate Amount of
Registered Amount to be Registered Per Share(1) Offering Price(1) Registration Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock 720,000 shares $1.03125 $742,500 $219.04
===========================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
PROSPECTUS
Ampex Corporation
720,000 Shares of Class A Common Stock
_______________________________
Our Class A Common Stock is traded on the American Stock Exchange under the
symbol "AXC." On October 30, 1998, the closing sale price of the Class A Common
Stock on the American Stock Exchange was $1.00 per share. At the date of this
prospectus, the Class A Common Stock is the only outstanding class of our Common
Stock.
These shares are being sold by the selling stockholders listed below. The
selling stockholders acquired their shares in connection with our recent
acquisition of MicroNet Technology, Inc. The selling stockholders will determine
the selling price of the shares at the time of sale, and we will not receive any
proceeds from the sale of these shares.
______________________________________
See "Risk Factors" beginning on page 5 for certain factors that you should
consider before investing in the shares.
______________________________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
______________________________________
The date of this prospectus is November 4, 1998.
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION......................................... 3
FORWARD-LOOKING STATEMENTS.................................................. 4
THE COMPANY................................................................. 4
RISK FACTORS................................................................ 5
USE OF PROCEEDS............................................................. 11
SELLING STOCKHOLDERS........................................................ 11
DESCRIPTION OF CAPITAL STOCK................................................ 12
PLAN OF DISTRIBUTION........................................................ 16
LEGAL MATTERS............................................................... 17
EXPERTS..................................................................... 17
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy these documents at the SEC's
Public Reference Room, located at 450 Fifth Street, N.W., Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for more information about the Public
Reference Room. The SEC also maintains an Internet site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the SEC. The address of the SEC's Internet site is
http://www.sec.gov. You may also read our SEC filings at the American Stock
Exchange, Inc., 86 Trinity Place, New York, New York. Additional information
about us is available on our web site at www.ampex.com.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, until the selling stockholders sell all the shares:
Annual Report on Form 10-K for the year ended December 31, 1997;
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and
June 30, 1998;
Current Reports on Form 8-K dated July 2, 1998 and July 17, 1998, and Forms
8-K/A dated July 17, 1998 and September 25, 1998 and October 16, 1998;
Proxy Statement dated April 9, 1998; and
Registration Statement on Form 8-A filed with the SEC on January 16, 1996.
This prospectus is part of the registration statement we filed with the SEC
(file no. _____). You may request a copy of the information incorporated by
reference, at no cost, by contacting us at the following address or telephone
number:
Investor Relations
Ampex Corporation
500 Broadway
Redwood City, CA 94063-3199
(650) 367-4111.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. The selling stockholders will not offer to sell
these shares in any state where the offer is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other
than the date on the front of this prospectus.
3
FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements involve known and unknown risks, uncertainties and
other important factors that could cause our actual results, performance or
achievements, or industry results, to differ materially from any future results,
performance or achievements expressed or implied by such statements. These
risks, uncertainties and other important factors include, among others, those
described under the "Risk Factors" section beginning on page 5. You should read
the Risk Factors section carefully, and should not place undue reliance on any
forward-looking statements, which speak only as of the date of this prospectus.
We undertake no obligation to release publicly any updating information about
forward-looking statements to reflect events or circumstances occurring after
the date of this prospectus or to reflect the occurrence of unanticipated
events.
THE COMPANY
General
Ampex is a leader in the design and manufacture of high-performance
scanning recording devices and digital image processors. Our specialized
recording products are used to collect data at high speeds under difficult
conditions, such as those in aircraft, and for the storage of mass computer
data, especially images. We have significant experience in digital image
processing. We hold approximately 1,000 patents and patent applications in this
field and in the field of recording technology, from which we derive significant
licensing income. We license our technology primarily to manufacturers of
consumer video products worldwide.
Our principal product groups are our mass data storage and instrumentation
products and our professional video and other products. The mass data storage
and instrumentation products group includes: (i) 19-millimeter scanning
recorders and library systems (DST(R) and DIS(TM) products) and related tape and
after-market equipment; and (ii) data acquisition and instrumentation products
(primarily DCRsi instrumentation recorders) and related tape and after- market
equipment. The professional video and other products group includes primarily
our DCT(R) video recorders and image processing systems and related tape
products and television after-market equipment.
Since the end of the second fiscal quarter of 1998, our operations have
included the operations of MicroNet Technology, Inc., a manufacturer of disk
array and network attached storage products for image based markets, such as the
video and commercial pre-press markets. Subsequent to our acquisition, we have
focused MicroNet's product development efforts on its DataDock 7000, a data
storage product based upon redundant arrays of independent drives (RAID). The
DataDock 7000 permits users to configure their disk drives to store up to 128
gigabytes of data. The addition of the DataDock 7000 complements Ampex's
image-based storage products expertise by offering disk, as well as tape, based
storage solutions.
Ampex was incorporated in Delaware in January 1992 as the successor to a
business originally organized in 1944. References to "Ampex" or the "Company"
include subsidiaries of Ampex Corporation, unless the context indicates
otherwise. Our principal executive offices are located at 500 Broadway, Redwood
City, California 94063- 3199, and our telephone number is (415) 367-2011.
The names "Ampex", "DCT", "DST", "DIS" and "DCRsi" are trademarks of Ampex
Corporation. "MicroNet" and "DataDock" are trademarks of Micronet Technology,
Inc., a subsidiary of Ampex Corporation.
4
Recent Developments
In the third quarter of 1998, Ampex recognized a $5.2 million income tax
benefit due to the liquidation of its Italian subsidiary. We also expect to
recognize a net restructuring credit of $0.3 million in the third quarter, which
reflects a payment we received in connection with a lease renegotiation, offset
by other restructuring charges incurred in connection with our previously
announced plans to relocate a portion of our DCRsi manufacturing operations to
our Colorado Springs, Colorado facility. In October 1998, Ampex was notified of
the assertion of a claim against MicroNet in the amount of approximately
$595,000 on behalf of an insolvent former customer of MicroNet. Our counsel is
currently assessing this claim.
RISK FACTORS
Investment in the shares covered by this prospectus involves a significant
degree of risk. You should carefully consider all of the information in this
prospectus, and, in particular, should evaluate the following risks related to
an investment in the shares.
Increased Debt
In January and July of 1998, we issued a total of $44 million principal
amount of our 12% Senior Notes due 2003. As a result, our leverage has increased
significantly from our prior level, which was not material. Pending utilization
of the net proceeds of the Senior Notes, the Company has temporarily invested
these proceeds in cash equivalents, including Government securities. The
interest received on these investments has been, and is expected to continue to
be, substantially less than the interest payable on the Notes. In order to
minimize the difference between the interest we currently receive on these
investments and the interest payable on the Senior Notes, we may invest a
significant portion of the Senior Note proceeds in securities with higher
yields, longer terms or lower credit quality, and we may also engage in various
transactions in derivative securities. As of September 30, 1998, we had
outstanding approximately $45.0 million of total borrowings (including the
Senior Notes). We may incur additional indebtedness from time to time to finance
acquisitions or capital expenditures or for other purposes, subject to the
restrictions in the indenture governing the Senior Notes. The degree to which we
are leveraged, and the types of investments we select, could have important
consequences to investors, including the following:
- - a substantial portion of our consolidated cash flow from operations must be
dedicated to the payment of the principal of and interest on our
outstanding indebtedness, and will not be available for other purposes;
- - our ability to obtain additional financing in the future for working
capital needs, capital expenditures, acquisitions and general corporate
purposes may be materially limited or impaired, or such financing may not
be available on terms favorable to us;
- - we may be more highly leveraged than our competitors, which may place us at
a competitive disadvantage;
- - our leverage may make us more vulnerable to a downturn in our business or
the economy in general;
- - investments in securities with lower credit quality or longer maturities
could subject us to potential losses due to non-payment or changes in
market value of those securities, and transactions in derivative securities
could expose Ampex to losses caused by stock market fluctuations; and
5
- the financial covenants and other restrictions contained in the Senior Note
indenture and other agreements relating to our indebtedness will restrict
our ability to borrow additional funds, to dispose of assets or to pay
dividends on or repurchase preferred or common stock.
We expect that our cash balances and cash flow from operations will be
sufficient to fund anticipated operating expenses, capital expenditures and our
debt service requirements as they become due. There can be no assurance,
however, that the amounts available from these sources will be sufficient for
such purposes. No assurance can be given that additional sources of funding will
be available if required or, if available, will be on terms satisfactory to us.
If we cannot service our indebtedness we will be forced to adopt alternative
strategies. These strategies may include reducing or delaying our capital
expenditures, selling our assets, restructuring or refinancing our indebtedness,
or seeking additional equity capital. There can be no assurance that any of
these strategies will be successful or that they will be permitted under the
Senior Note indenture.
Ampex derives a substantial portion of its operating income from its
subsidiaries. Accordingly, Ampex will be dependent on dividends and other
distributions from its subsidiaries to generate the funds necessary to meet its
obligations, including the payment of principal and interest on the Senior
Notes. The ability of our subsidiaries to pay such dividends will be subject to,
among other things, the terms of any debt instruments of our subsidiaries then
in effect and applicable law.
Risk of Continuing Sales Decline
In recent years, Ampex's net sales have declined materially. These declines
reflect declines in sales to U.S. and foreign government agencies, which are
material to our operating results. These government agencies have experienced
continued pressure to reduce spending, which has particularly affected our sales
to government contractors of our DCRsi instrumentation recorders, which have
generally been more profitable than our data storage and video recording
products. Sales of our professional video products have also declined in recent
years following our substantial withdrawal from this market in 1993, and are no
longer material to Ampex. However, we have continued to derive material revenues
from sales of our after-market television equipment. Sales of these products are
also expected to decline as a result of the recent announcement of new
television transmission standards.
In response to declining sales of these products, Ampex is seeking to
expand its products and services, including through acquisitions such as the
acquisition of MicroNet Technology, Inc. We intend to focus on MicroNet's
DataDock 7000 product line and a new high-end product line to be introduced in
the first quarter of 1999. We also plan to deemphasize other lower-priced
product lines which, in prior years, have accounted for the majority of
MicroNet's sales. See "The Company -- General." Ampex has also instituted, and
will continue to implement, cost reduction programs, which address the continued
reduction in sales levels. However, there can be no assurance that any of these
strategies will be successful, or that Ampex will be able to reverse recent
sales declines.
Risks Associated With Acquisition Strategy
In order to expand our products and services, we are considering making
acquisitions of, and/or investments in, other business entities, which may
include businesses not related to our existing lines of business. There is no
assurance that we will be able to identify, acquire or manage future acquisition
candidates profitably, or as to the timing or amount of any return that we might
realize in any such investment. Acquisitions could necessitate commitments of
funds in fixed assets and working capital of acquired businesses in excess of
the purchase price, which could reduce our future liquidity. Possible future
acquisitions could require us to incur additional debt, contingent liabilities
and amortization expenses related to goodwill and other intangible assets. Ampex
could also be exposed to the risk of losses or write-offs of unsuccessful
acquisitions or investments. In connection with our acquisition strategy, we may
purchase in the open market securities issued by companies which we are
considering acquiring or in which we are considering making a larger investment.
We may also engage in
6
transactions in derivative securities to offset potential market risks
associated with these investments. Investments in these securities could
expose us to the risk of trading losses due to market fluctuations or other
factors that are not within our control. Any or all of these items could
materially adversely affect our financial condition, results of operations,
cash flow available to service our debts and ability to issue debt or
equity securities.
Fluctuating Royalty Income
Ampex's results of operations in certain prior periods reflect the receipt
of significant royalty income, including material non-recurring payments
resulting from negotiated settlements primarily related to sales of products by
manufacturers before negotiating licenses from us. Although we have a
substantial number of outstanding and pending patents, and our patents have
generated substantial royalties in the past, it is not possible to predict the
amount of royalty income that we will receive in the future. Royalty income has
historically fluctuated widely due to a number of factors that we cannot
predict, such as the extent to which third parties use our patented technology,
the extent to which we must pursue litigation in order to enforce our patents,
and the ultimate success of our licensing and litigation activities. The costs
of patent litigation can be material. The institution of patent enforcement
litigation may also increase the risk of counterclaims alleging infringement by
us of patents held by third parties or seeking to invalidate patents held by us.
Moreover, there is no assurance that we will continue to develop patentable
technology that will be able to generate significant patent royalties in future
years to replace patents as they expire. Our royalty income fluctuates
significantly from quarter to quarter and from year to year, and there can be no
assurance as to the level of royalty income that will be realized in future
periods.
Fluctuations In Operating Results
Ampex's sales and results of operations are generally subject to quarterly
and annual fluctuations. Various factors affect our operating results,
including:
customer ordering patterns;
availability and market acceptance of new products;
timing of significant orders and new product announcements;
order cancellations; and
receipt of royalty income.
Ampex's revenues are typically dependent upon receipt of a limited number of
customer orders involving relatively large dollar volumes in any given fiscal
period. Therefore, our results may fluctuate significantly from quarter to
quarter and from year to year. Results of a given quarter or year may not
necessarily be indicative of results to be expected for future periods. In
addition, fluctuations in operating results may negatively affect our debt
service coverage, or our ability to issue debt or equity securities should we
wish to do so, in any given fiscal period.
Seasonality; Backlog
Sales of most of our products have historically declined during the first
and third quarters of our fiscal year, due to the seasonal procurement practices
of our customers. A substantial portion of our backlog at a given time is
normally shipped within one or two quarters thereafter. Therefore, sales in any
quarter are heavily dependent on orders received in that quarter and the
immediately preceding quarter.
7
Rapid Technological Change and Risks of New Product Development
All the industries and markets from which we derive revenues, directly or
through our licensing program, are characterized by continual technological
change and the need to introduce new products, product upgrades and patentable
technology. This has required, and will continue to require, that we spend
substantial amounts for the research, development and engineering of new
products and advances to existing products. No assurance can be given that our
existing products and technologies will not become obsolete or that any new
products or technologies will win commercial acceptance. Obsolescence of
existing product lines, or inability to develop and introduce new products,
could have a material adverse effect on our sales and results of operations in
the future. The development and introduction of new technologies and products
are subject to inherent technical and market risks, and there can be no
assurance that we will be successful in this regard.
Competition
Ampex encounters significant competition in all its product markets. Many
of our competitors have greater resources and access to capital than the
Company. In the mass data storage market, we compete with a number of
well-established competitors such as IBM, Storage Technology Corporation,
Exabyte Corporation and Quantum Corporation, as well as smaller companies. In
addition, other manufacturers of scanning video recorders may seek to enter the
mass data storage market in competition with us. For example, in 1995 Sony
Corporation entered this market with storage products based on its video
recording technology. In addition, price declines in competitive storage
systems, such as magnetic or optical disk drives, can negatively impact sales of
our DST products. In the instrumentation market, we compete primarily with
companies that depend on government contracts for a major portion of their sales
in this market, including Sony Corporation, Loral Data Systems, Datatape
Incorporated and Metrum Incorporated. The number of competitors in this market
has decreased in recent years as the level of government spending in many areas
has declined. MicroNet's competitors include both large companies such as EMC
Corporation, Data General Corporation and IBM Corporation and other smaller
system integrators. There is no assurance that we will be able to compete
successfully in these markets in the future.
Dependence On Certain Suppliers
Ampex purchases certain components from a single domestic or foreign
manufacturer. Significant delays in deliveries or defects in such components
could adversely affect our manufacturing operations, pending qualification of an
alternative supplier. In addition, we produce highly engineered products in
relatively small quantities. As a result, our ability to cause suppliers to
continue production of certain products on which we may depend may be limited.
We do not generally enter into long-term raw materials or components supply
contracts.
Risks Related to International Operations
Although we significantly curtailed our international operations in
connection with the restructuring of our operations in 1993, sales to foreign
customers (including U.S. export sales) continue to be significant to our
results of operations. International operations are subject to a number of
special risks, including limitations on repatriation of earnings, restrictive
actions by local governments, and fluctuations in foreign currency exchange
rates and nationalization. Additionally, export sales are subject to export
regulation and restrictions imposed by U.S. government agencies. Fluctuations in
the value of foreign currencies can affect our results of operations. We do not
normally seek to mitigate our exposure to exchange rate fluctuations by hedging
our foreign currency positions.
Volatility of Stock Price
The trading price of our Common Stock has been and can be expected to be
subject to significant volatility, reflecting a variety of factors, including:
quarterly fluctuations in operating results;
8
announcements of new product introductions by us or our competitors;
announcements of new product introductions by us or our competitors;
announcements by us of acquisitions of, or investments in, new businesses
or other events;
reports and predictions concerning the Company by analysts and other
members of the media;
issuances of substantial amounts of Common Stock in order to redeem
outstanding shares of our Preferred Stock; and
general economic or market conditions.
The stock market in general and technology companies in particular have
experienced a high degree of price volatility, which has had a substantial
effect on the market prices of many technology companies for reasons that often
are unrelated or disproportionate to operating performance.
Dependence on Key Personnel
We are highly dependent on our management. Our success depends upon the
availability and performance of our executive officers and directors. The loss
of the services of any of these key persons could have a material adverse effect
upon us. We do not maintain key man life insurance on any of these individuals.
Anti-Takeover Consequences of Certain Governing Instruments
Our Certificate of Incorporation provides for a classified Board of
Directors, with members of each class elected for a three-year term. The
Certificate of Incorporation provides for nullification of voting rights of
certain foreign stockholders in certain circumstances involving possible
violations of security regulations of the United States Department of Defense.
The instrument governing our outstanding classes of Preferred Stock, which have
an aggregate liquidation value of approximately $62.5 million, requires that we
make mandatory offers to redeem those securities out of legally available funds
in the event of a change of control. For this purpose, a change of control
includes the following events: a person or group of people acting together
acquires 30% or more of our voting securities; we merge, consolidate or transfer
all or substantially all of our assets; or the dissolution of Ampex. The
Certificate of Incorporation authorizes our Board of Directors to issue
additional shares of Preferred Stock without the vote of stockholders. The
indenture governing our outstanding Senior Notes, in the total principal amount
of $44 million, requires us to offer to repurchase the Senior Notes at a
purchase price equal to 101% of the outstanding principal amount thereof
together with accrued and unpaid interest in the event of a change of control.
Under the indenture, a change of control includes the following events: a person
or group of people acting together acquires 50% or more of the Company's voting
stock; or the transfer of substantially all of the Company's assets to any such
person or group, other than to certain subsidiaries and affiliates of Ampex.
These provisions could have anti- takeover effects by making an acquisition of
Ampex by a third party more difficult or expensive in certain circumstances.
Non-payment of Dividends
We have not declared dividends on our Common Stock since our incorporation
in 1992 and we have no present intention of paying dividends on our Common
Stock. We are also restricted by the terms of certain agreements and of our
outstanding Preferred Stock as to the declaration of dividends.
Dependence on Licensed Patent Applications and Proprietary Technology
Our success depends, in part, upon our ability to establish and maintain
the proprietary nature of our technology through the patent process. There can
be no assurance that one or more of our patents will not be successfully
challenged, invalidated or circumvented or that we will otherwise be able to
rely on such patents for
9
any reason. In addition, there can be no assurance that competitors, many of
whom have substantial resources and have made substantial investments in
competing technologies, will not seek to apply for and obtain patents that
prevent, limit or interfere with our ability to make, use and sell our products
either in the United States or in foreign markets. If any of our patents are
successfully challenged, invalidated or circumvented or our right or ability to
manufacture our products were to be proscribed or limited, our ability to
continue to manufacture and market our products could be adversely affected,
which would likely have a material adverse effect upon our business, financial
condition and results of operations.
Litigation may be necessary to enforce our patents, to protect trade
secrets or know-how owned by us or to determine the enforceability, scope and
validity of the proprietary rights of others. Any litigation or interference
proceedings brought against, initiated by or otherwise involving us may require
us to incur substantial legal and other fees and expenses and may require some
of our employees to devote all or a substantial portion of their time to the
prosecution or defense of such litigation or proceedings.
Environmental Issues
Our facilities are subject to numerous federal, state and local laws and
regulations designed to protect the environment from waste emissions and
hazardous substances. Owners and occupiers of sites containing hazardous
substances, as well as generators and transporters of hazardous substances, are
subject to broad liability under various federal and state environmental laws
and regulations, including liability for investigative and cleanup costs and
damages arising out of past disposal activities. We have been named from time to
time as a potentially responsible party by the United States Environmental
Protection Agency with respect to contaminated sites that have been designated
as "Superfund" sites, and are currently engaged in various environmental
investigation, remediation and/or monitoring activities at several sites located
off Company facilities. There can be no assurance we will not ultimately incur
liability in excess of amounts currently reserved for pending environmental
matters, or that additional liabilities with respect to environmental matters
will not be asserted. In addition, changes in environmental regulations could
impose the need for additional capital equipment or other requirements. Such
liabilities or regulations could have a material adverse effect on us in the
future.
Readiness for Year 2000
Many currently installed computer systems, software applications and other
control devices (collectively, "Systems") are coded to accept only two digit
entries in the date code field. As the year 2000 approaches, these code fields
will need to accept four digit entries to distinguish years beginning with "19"
from those beginning with "20". As a result, in just over one year the Systems
used by many companies may need to be modified to comply with year 2000
requirements. Ampex relies on its internal Systems in operating and monitoring
all major aspects of its business, including its manufacturing processes,
engineering management controls, financial systems (such as general ledger,
accounts payable and payroll modules), customer services, infrastructure,
embedded computer chips, networks and telecommunications equipment and products.
We also rely on the external Systems of our suppliers and other organizations
with which we do business.
We are currently reviewing all of our products, as well as our internal use
of Systems, in order to identify and modify those products and Systems that are
not year 2000 compliant. To accomplish this, we have established a Year 2000
Compliance Committee that is investigating the impact of the year 2000 on our
business. The Committee's membership includes representatives involved in all
major functions of our business. Its charter is to identify all Systems that, if
not in compliance, could adversely affect Ampex's business. For critical Systems
that are found not to be in compliance, the Committee will develop a plan,
including a budget for associated costs, to ensure compliance before the year
2000. The Committee has nearly completed its assessment, and has determined that
many of our Systems, such as our manufacturing Systems, are in compliance, as
are all of the products we currently offer for sale. Other Systems, such as our
financial Systems and some engineering management Systems, currently do not
comply but are expected to be modified in early 1999 so that they are compliant.
There can be no assurance, however, that we will not be required to reevaluate
our assessments should it become evident that any
10
Systems previously determined to be in compliance are not yet fully compliant.
We have also sent questionnaires to our major suppliers to assess the status of
their year 2000 compliance, as it relates to Ampex. To date, no material issue
has been identified in any of the other Systems used or relied upon us, and the
cost of bringing the non-compliant Systems into compliance by early 1999 has not
been, and is not expected to be, material.
Ampex believes that the most reasonably likely worse case scenario is that
the required modifications will not be completed until late 1999. Under this
scenario, we do not believe that there would be any material impact on our
business. Accordingly, we have not developed a contingency plan in the event the
required modifications are not made in 1999. Our current insurance programs do
not specifically exclude losses attributable to year 2000 non-compliance, but
these programs are subject to change as they are renewed for future periods.
Despite our efforts thus far to address the year 2000 impact, Ampex cannot
guarantee that all internal and external Systems will be compliant, or that our
business will not be materially adversely affected by any such non-compliance.
USE OF PROCEEDS
All net proceeds from the sale of the shares covered by this prospectus
will go to the selling stockholders who offer and sell their shares.
Accordingly, Ampex will not receive any proceeds from the sale of these shares.
SELLING STOCKHOLDERS
In July 1998, Ampex acquired all of the common stock of MicroNet
Technology, Inc. In connection with this acquisition, we issued 720,000 shares
of Class A Common Stock to MicroNet's stockholders and agreed to register those
shares for sale by MicroNet's stockholders, who are the selling stockholders. We
agreed to maintain the effectiveness of the registration statement covering the
shares until all of the shares are sold by the selling stockholders or become
eligible for resale without registration under Rule 144 of the Securities Act.
Our registration of these shares does not necessarily mean that the selling
stockholders will sell any or all of these shares.
At the date of this Prospectus, all of the 720,000 shares being registered
are being held in escrow for the account of the selling stockholders pursuant to
an Escrow Agreement dated as of July 17, 1998, among Ampex, the selling
stockholders named below, certain other former stockholders of MicroNet, and IBJ
Schroder Bank & Trust Company, as escrow agent. The Escrow Agreement was entered
into in connection with our acquisition of MicroNet, and provides for the
release of all or a portion of the 720,000 shares, upon resolution of certain
disputed claims against MicroNet.
The following table sets forth certain information with respect to the
selling stockholders. All of the shares beneficially owned by each selling
stockholder are being registered for the account of that selling stockholder.
However, the selling stockholders will only be able to offer for sale those
shares that are actually released from escrow pursuant to the Escrow Agreement
described above. In addition, the selling stockholders may sell all or some of
the shares owned by them. Accordingly, we cannot estimate the number of shares
that will be owned by each selling stockholder upon completion of the offering
to which this prospectus relates. The information set forth in the table was
furnished to us by each of the selling stockholders.
Number of
Shares of
Common Stock
------------
Selling Stockholder
-------------------
Kline Hawkes MicroNet Partners LLC 713,588
Chloe Holdings Inc. 6,412
TOTAL 720,000
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DESCRIPTION OF CAPITAL STOCK
The following description is a summary of certain provisions of our
Certificate of Incorporation and By-Laws that relate to our capital stock. This
summary is qualified in its entirety by reference to those documents, copies of
which are filed or incorporated by reference as exhibits to the registration
statement that includes this prospectus.
General
Our authorized capital stock consists of (i) 175,000,000 shares of Common
Stock, of which 125,000,000 shares are designated as Class A Common Stock, and
50,000,000 shares are designated as Class C Common Stock; and (ii) 1,000,000
shares of Preferred Stock, of which 157,162 previously issued shares have been
canceled and retired. As of the date of this prospectus, no shares of Class C
Common Stock were outstanding.
Common Stock
Dividends. Holders of Common Stock are entitled to receive such dividends
as may be declared by the Board of Directors out of funds legally available for
such purpose. However, this right to receive dividends is subject to preferences
which may be granted to holders of Preferred Stock, and to the restrictions
contained in the Certificate of Designations. No dividend may be declared or
paid in cash or property on any share of Class A Common Stock or Class C Common
Stock, unless the same dividend is simultaneously declared or paid on each share
of Class A Common Stock and each share of Class C Common Stock. In the case of
any stock dividend, holders of each class of Common Stock are entitled to
receive the same ratable dividend. Such dividends will be payable to the holders
of Class A Common Stock in shares of Class A Common Stock and to the holders of
Class C Common Stock in shares of Class C Common Stock.
Liquidation Rights. Upon liquidation, dissolution or winding-up of the
Company, the holders of all classes of Common Stock shall be entitled to share
ratably, in accordance with the number of shares of Common Stock held by each
such holder, in all assets available for distribution to stockholders after
payment of creditors. This right is also subject to preferences that may be
granted to holders of Preferred Stock.
Voting Rights. Holders of Class A Common Stock are entitled to one vote for
each share held of record on matters submitted to a vote of stockholders.
Subject to the voting rights of any outstanding shares of Preferred Stock,
approval of matters brought before the stockholders requires the affirmative
vote of a majority of shares of Class A Common Stock, except that the
affirmative vote of the holders of at least 80% of the outstanding shares of
voting Common Stock is required in order to amend or repeal:
(i) the provisions relating to classification of the Board, removal and number
of directors and the 80% voting requirement in such instances;
(ii) the provisions described below under "Directors' and Officers' Liability;"
and
(iii) as otherwise required by law.
Under Delaware law, the affirmative vote of the holders of a majority of
outstanding shares of any class of Common Stock is required to approve, among
other things, any adverse change in the powers, preferences or special rights of
the shares of such class. The number of authorized shares of Class A Common
Stock, Class C Common Stock and Preferred Stock may be increased or decreased
(but not below the number of shares then outstanding) by the affirmative vote of
the holders of a majority in voting power of the outstanding Class A Common
Stock.
12
The holders of Class C Common Stock generally have no voting rights and the
Class C Common Stock is not included in determining the number of shares voting
or entitled to vote or consent on any matter. However, the affirmative vote of
the holders of a majority of the outstanding shares of Class C Common Stock,
voting as a separate class (with each share entitled to one vote), is required
under Delaware law for any amendment to, or modification or waiver of, the
provisions of the Certificate of Incorporation that would adversely alter,
change or affect the powers, preferences or rights of the Class C Common Stock.
Subject to the voting rights of the holders of any outstanding shares of
Preferred Stock, directors are elected by a plurality vote of the holders of
voting Common Stock, voting as a single class. The number of directors
constituting the whole Board is currently fixed at five, and may be increased or
decreased (but not below three) by resolution of the Board, but no such decrease
can shorten the term of any director then in office. Holders of Common Stock are
not entitled to cumulate votes in the election of directors. Director
nominations may be made by stockholders in accordance with the Company's
By-Laws, generally not less than 70 days or more than 90 days before the first
anniversary of the preceding year's Annual Meeting of Stockholders.
Classification of Directors. Our Board of Directors is divided into three
classes, which need not be equal in number, designated Class I, Class II and
Class III, with terms expiring successively at each Annual Meeting of
Stockholders of the Company. At each Annual Meeting of Stockholders, the
successors to the class of directors whose term shall then expire will be
elected to hold office for a term expiring at the third succeeding Annual
Meeting of Stockholders. The Board of Directors, acting by a majority of the
directors then in office (although less than a quorum) or by a sole remaining
director, may fill vacancies and newly created directorships resulting from any
increase in the authorized number of directors, and may designate the class of
each director so chosen to fill a newly created directorship resulting from any
increase in the authorized number of directors, and each director so chosen to
fill a vacancy shall be a member of the same class as the director being
replaced.
Convertibility of Class C Common Stock. Each share of Class C Common Stock
is convertible into one share of Class A Common Stock automatically upon
transfer, unless the transferee elects not to have its Class C Common Stock
convert into Class A Common Stock, and the transferee notifies the Company of
its election in accordance with the procedures described in the Certificate of
Incorporation. Shares of Class A Common Stock are not convertible into shares of
Class C Common Stock. Shares of Class C Common Stock that have been converted
into shares of Class A Common Stock may not thereafter be exchanged for shares
of Class C Common Stock.
Business Combinations. As preconditions to any proposed merger,
consolidation or business combination with Sherborne Holdings Incorporated, a
Delaware corporation of which Edward J. Bramson, who is Chairman and Chief
Executive Officer of the Company, is the indirect controlling shareholder, or
any of its affiliates, Ampex directors who are disinterested as to such
transaction must:
(i) have been provided the right to select and engage, at the Company's
expense, legal, accounting and financial advisers to assist them in the
consideration of such transaction;
(ii) have received a letter of opinion from a qualified independent investment
banker of national reputation to the effect that the terms of such
transaction are fair to the holders of Class A Common Stock and the Class C
Common Stock; and
(iii) have approved, by a majority vote, the consummation of such transaction.
The foregoing restriction does not apply to any merger, consolidation or
business combination with one or more wholly-owned subsidiaries of Ampex in
which Ampex is the surviving entity and in which no outstanding shares of Common
Stock are converted, exchanged or canceled. In any merger, consolidation or
business combination that is not so restricted, the consideration to be received
per share by holders of Class A Common Stock and Class
13
C Common Stock must be identical, except that in any such transaction in which
shares of Common Stock are distributed, such shares may differ as to voting and
other special rights to the extent such rights now differ among the classes of
Common Stock. For this purpose, an "affiliate" of any person or entity means any
individual or entity that, directly or indirectly, controls, is controlled by,
or is under common control with that person or entity (including, investment
partnerships in which that person or entity is or becomes, directly or
indirectly, a general partner).
Nullification of Voting Rights of Certain Foreign Stockholders. The U.S.
Department of Defense has policies regarding foreign ownership, control or
influence over U.S. government contractors. These policies are designed to
protect against the risk to national security that may result if classified
information is made available to U.S. government contractors or subcontractors
who are owned, controlled or influenced by foreign governments, individuals or
organizations. These policies require Ampex, as well as the Defense Department's
other contractors and subcontractors, to submit information that will assist the
Defense Department in determining whether the award or continued performance of
a contract may pose an undue risk to the common defense and security of the
United States. One of the Defense Department's areas of inquiry is whether any
foreign interest has beneficial ownership of 5% or more of a contractor's or
subcontractor's voting securities. If the Defense Department determines that an
unacceptable level of foreign ownership, influence or control would result in
undue threat to the common defense and security of the United States, it may,
among other things, require specific mitigation of such unacceptable foreign
ownership, influence or control. If such mitigation cannot be achieved, the
Defense Department may terminate the contractor's or subcontractor's existing
contract with it and preclude future contract awards. For this reason, our
Certificate of Incorporation provides that with respect to any foreign holder of
Class A Common Stock identified by the Defense Department to be the subject of
any inquiry, investigation or other action that could adversely affect our
security clearances, the voting rights of such holder shall be nullified until
we are notified by the Department of its final determination that such holder's
ownership will not adversely affect the continuation of our facility security
clearances. Our Certificate of Incorporation also contains provisions that
require us to notify affected foreign holders of any such vote nullification and
subsequent reinstatement.
Other Provisions. The holders of Common Stock have no preemptive or other
subscription rights by virtue of their ownership of Common Stock, nor are there
any redemption or sinking fund provisions with respect to any class of Common
Stock. No class of Common Stock may be subdivided, consolidated, reclassified or
otherwise changed unless each other class of Common Stock is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
Preferred Stock
Designation of Series. Our Certificate of Incorporation authorizes us to
issue up to 1,000,000 shares of Preferred Stock in one or more series, as
determined by our Board of Directors. Each series must be appropriately
designated by a distinguishing number, letter or title, before any shares of
that series can be issued. The Board is authorized to fix or alter the dividend
rights, dividend rate, conversion rights, voting rights, the rights and terms of
redemption (including sinking fund provisions), the redemption price or prices,
and the liquidation preferences of any wholly unissued series of Preferred
Stock, and the amount of shares constituting any such series and the designation
thereof. The Board can also increase or decrease the number of shares of any
series after shares of that series have been issued, but not below the number of
shares of such series then outstanding. In case the number of shares of any
series shall be so decreased, the shares constituting such decrease shall resume
the status that they had before the adoption of the resolution originally fixing
the number of shares of such series. At the date of this prospectus, there are
two series of Preferred Stock outstanding:
(i) 10,000 shares of 8% Noncumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), having an aggregate liquidation preference
of $20 million, and
14
(ii) 21,859 shares of 8% Noncumulative Redeemable Preferred Stock (the
"Redeemable Preferred Stock"), having an aggregate liquidation preference
of $43.7 million.
The Company has no present plans to issue any additional shares of Preferred
Stock.
Voting Rights. Shares of the outstanding Preferred Stock are non-voting
except as required by law or as specified in the Certificate of Designations,
Preferences and Rights governing the Preferred Stock. In the event that we fail
to fulfill any of our mandatory redemption obligations with respect to the
outstanding Preferred Stock, our Board of Directors will be increased by one
director and the holders of all shares of outstanding Preferred Stock, voting as
a single class, will be entitled to elect the additional director. This voting
right will continue until we fulfill our mandatory redemption obligation. Under
the Certificate of Designations, the unanimous vote of the holders of the
Convertible Preferred Stock or the Redeemable Preferred Stock is required to
change the liquidation preference, dividend rate, calculation of dividends or to
change certain provisions relating to the redemption of that series. The vote of
the holders of at least 51% of the Convertible Preferred Stock or the Redeemable
Preferred Stock is required to make any changes to the Certificate of
Incorporation or the Certificate of Designations that would adversely affect the
rights, preferences or voting powers of the holders of such series, or to
authorize, create or issue any stock that is senior to or on a par with such
series with respect to dividends or liquidation rights.
Dividend Rights. The holders of the outstanding Preferred Stock are
entitled to receive, when and as declared by the Board, in its sole discretion,
out of funds legally available therefor, dividends on the liquidation preference
at the annual rate of 8%. Such dividends will be payable quarterly, if declared
by the Board, but will not accrue or cumulate unless so declared. The
Certificate of Designations restricts, among other things, our ability to engage
in transactions with affiliates, or to declare dividends or make distributions
with respect to, or purchase, redeem or exchange, any Common Stock or other
capital stock that ranks junior to the Preferred Stock. If we fail to comply
with certain restrictions and obligations, the applicable dividend rate will be
increased to an annual rate of 10%. In the event of any liquidation, dissolution
or winding up of Ampex, either voluntary or involuntary, the holders of the
outstanding Preferred Stock are entitled to receive out of Ampex's assets
available for distribution to stockholders, an amount equal to $2,000 per share
plus declared and unpaid dividends on such shares, before any payment or
distribution can be made to the holders of junior stock.
Redemption. We are required to redeem, out of legally available funds,
outstanding Preferred Stock at the times and in the amounts specified in the
Certificate of Designations. The Redeemable Preferred Stock is mandatorily
redeemable in quarterly installments beginning in June 1999 and ending in
December 2008, and is subject to acceleration in certain circumstances. The
Convertible Preferred is mandatorily redeemable in quarterly installments
beginning in June 2001 and ending in March 2008. In addition, we may, at our
option on any date set by the Board, redeem, in whole or in part, out of legally
available funds, shares of outstanding Preferred Stock of either series for an
amount equal to the liquidation preference of the shares being redeemed, plus
all accrued and unpaid dividends thereon, provided that we may not redeem the
Convertible Preferred Stock at our option before June 30, 2001, and provided,
further, that all declared and unpaid dividends on all outstanding shares of
either series of outstanding Preferred Stock to be redeemed shall have been paid
on such series on or before the date of such redemption. If on any mandatory
redemption date we do not have legally available funds sufficient to make a
mandatory redemption payment in cash, we must make such payment by issuing
shares of our Common Stock valued at the higher of market value or $2.50 per
share (subject to adjustment). In the event of a change in control of Ampex,
each holder of outstanding Preferred Stock will have the right to require us to
redeem in cash, out of legally available funds, all or any portion of such
holder's shares of Noncumulative Preferred Stock, at the applicable redemption
price. As defined in the Certificate of Designations, a change in control
includes (i) the acquisition by any person or persons acting as a group, other
than Sherborne & Company Incorporated or affiliates, of more than 30% of the
Company's voting securities, (ii) a consolidation or merger of the Company or a
transfer of all or substantially all of its assets, or (iii) dissolution of the
Company.
15
Effects of Preferred Stock. The Preferred Stock could have an anti-takeover
effect under certain circumstances. The issuance of shares of Preferred Stock
could enable the Board to render more difficult or discourage an attempt to
obtain control of Ampex by means of a merger, tender offer or other business
combination transaction directed at Ampex by, among other things, placing shares
of Preferred Stock with investors who might align themselves with the Board of
Directors, issuing new shares to dilute stock ownership of a person or entity
seeking control of Ampex or creating a class or series of Preferred Stock with
class voting rights. The issuance of shares of Preferred Stock as an
anti-takeover device might preclude stockholders from taking advantage of a
situation that they believe could be favorable to their interests.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, NY 10005. We act as the
transfer agent for the outstanding Preferred Stock.
Anti-Takeover Statute
Section 203 of the Delaware General Corporation Law generally prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless (i)
before the date the person became an interested stockholder, the transaction or
the business combination is approved by the board of directors of the
corporation, (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock (other than certain shares of
voting stock, including shares owned beneficially by directors who are also
officers and employee stock plans in which employee participants do not have the
right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer), or (iii) on or after the date such
stockholder became an interested stockholder, the business combination is
approved by the board and by the affirmative vote, and not by written consent,
of at least 66-2/3% of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, certain asset
sales and certain other transactions resulting in a financial benefit to the
stockholder. An "interested stockholder" is a person who owns 15% or more of the
corporation's outstanding voting stock or is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting stock of
the corporation at any time within the three-year period immediately prior to
the date on which it is sought to be determined whether such person is an
interested stockholder; and the affiliates and associates of such person.
Directors' and Officers' Liability
Our Certificate of Incorporation includes provisions to (i) eliminate the
personal liability of our directors for monetary damages resulting from breaches
of their fiduciary duty to the fullest extent permitted by the Delaware General
Corporation Law and (ii) indemnify our directors and officers to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law. We
believe that these provisions are necessary to attract and retain qualified
persons as directors and officers.
PLAN OF DISTRIBUTION
Ampex is registering the shares on behalf of the selling stockholders. The
selling stockholders may offer and sell their shares as principals or through
one or more underwriters, brokers, dealers or agents, from time to time, in one
or more transactions:
on any exchange or in the over-the-counter market;
in transactions otherwise than on an exchange or in the over-the-counter
market;
16
through the settlement of short sales of the Common Stock;
at a fixed offering price, which may be changed;
at varying prices determined at the time of sale; or
at negotiated prices.
Ampex will not receive any cash proceeds from the sale of the shares by the
selling stockholders. Any such underwriters, brokers, dealers or agents may
receive underwriting discounts and commissions, which may exceed customary
discounts, concessions or commissions. It is not possible at the present time to
determine the price to the public in any such sale. Accordingly, the public
offering price and the amount of any applicable underwriting discounts and
commissions will be determined at the time of such sale by selling stockholders.
The aggregate proceeds to the selling stockholders from the sale of their
shares will be the purchase price of their shares sold less all applicable
commissions and underwriters' discounts, if any, and other expenses of issuance
and distribution not borne by us. Ampex will pay substantially all the expenses
incident to the registration, offering and sale of the shares to the public by
the selling stockholders other than fees, discounts and commissions of
underwriters, dealers or agents, if any, transfer taxes and certain counsel
fees. Ampex has also agreed to indemnify the selling stockholders and any
underwriters against certain liabilities, including liabilities under the
Securities Act.
Because the selling stockholders may be deemed to be "underwriters" under
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. Ampex has informed the selling stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales of the Common Stock in the market.
Under the securities laws of certain states, the shares may be sold in such
states only through registered or licensed brokers or dealers. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
If and to the extent required, the specific shares to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts will be set forth in an accompanying prospectus
supplement or, if appropriate, a post-effective amendment to the registration
statement that includes this prospectus.
LEGAL MATTERS
Battle Fowler LLP will give its opinion as to the validity, authorization
and issuance of the shares. Battle Fowler LLP regularly provides legal services
to us and our affiliates. David D. Griffin, who is of counsel to Battle Fowler
LLP, holds shares of Ampex Common Stock directly and through certain entities in
which he is an investor. With respect to questions of California law and certain
other matters, Battle Fowler LLP may rely upon an opinion of our General
Counsel.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and 1996 and the
consolidated statements of operations, stockholders' deficit and cash flows for
each of the three years in the period ended December 31, 1997,
17
and related financial statement schedule, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report included in such Annual Report, and are incorporated herein by reference
in reliance upon such report, given upon the authority of such firm as experts
in accounting and auditing.
The consolidated financial statements of MicroNet Technology, Inc.
("MicroNet") at June 30, 1998, December 31, 1997 and December 19, 1996 and for
the periods from December 20, 1996 to December 31, 1997, January 1, 1996 to
December 19, 1996 and the year ended December 31, 1995, which are included in
the Current Report of Ampex Corporation on Form 8-K/A filed October 16, 1998,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon (which each contain an explanatory paragraph describing
conditions that raise substantial doubt about MicroNet's ability to continue as
a going concern, as described in Note 1 to its consolidated financial
statements) included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
18
No dealer, salesman or other person is authorized to give oral or written
information about this offering that is not included in this prospectus. If
given or made, such information or representation must not be relied upon as
having been authorized by Ampex. This prospectus does not constitute an offer to
sell, or solicitation of an offer to buy, Common Stock in any jurisdiction.
Neither the delivery of this prospectus nor any sale made hereunder shall, under
any circumstances, create an implication that there has been no change in the
affairs of Ampex since the date hereof.
______________
AMPEX CORPORATION
PROSPECTUS
November 4, 1998
_________________
______________
PART II
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
discounts or commissions) are estimated as set forth below, and the Selling
Stockholders are not expected to pay any portion of such expenses:
SEC Registration Fee......................................... $ 220
Accounting Fees and Expenses.................................... 25,000
Legal Fees and Expenses......................................... 50,000
Miscellaneous .................................................. 15,000
TOTAL $90,220
Item 15. Indemnification of Directors and Officers
The Registrant is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law (the "DGCL"), which provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such officer,
director, employee or agent acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests and, for
criminal proceedings, had no reasonable cause to believe that his conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses that
such officer or director actually and reasonably incurred.
Reference is also made to Section 102(b)(7) of the DGCL, which enables a
corporation in its certificate of incorporation to eliminate or limit the
personal liability of a director for monetary damages for violations of the
director's fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit.
Article VIII of the Registrant's By-laws provides as follows:
SECTION 1. Right to Indemnification. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
(including attorneys' fees) reasonably incurred by such person. The Corporation
shall be required to indemnify a person in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
SECTION 2. Prepayment of Expenses. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in advance of
its final disposition, provided, however, that the payment of expenses incurred
by a director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the director or officer to
repay all amounts advanced if it should be ultimately determined that the
director or officer is not entitled to be indemnified under this Article or
otherwise.
SECTION 3. Claims. If a claim for indemnification or payment of expenses
under this Article is not paid in full within sixty days after a written claim
therefor has been received by the Corporation, the claimant may file suit to
recover the unpaid amount of such claim, and if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification or payment of expenses under
applicable law.
SECTION 4. Non-Exclusivity of Rights. The rights conferred on any person by
this Article VIII shall not be exclusive of any other rights which such person
may have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 5. Other Indemnification. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such person
may collect as indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit enterprise.
SECTION 6. Amendment or Repeal. Any repeal or modification of the foregoing
provisions of this Article VIII shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE TEN of the Registrant's Certificate of Incorporation provides as
follows:
"A director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the GCL, as the same exists or may hereafter
be amended.
This ARTICLE TEN may not be amended or modified to increase the
liability of the Corporation's directors, or repealed, except upon the
affirmative vote of the holders of 80% or more in voting power of the
outstanding Common Shares. No such amendment, modification, or repeal shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment, modification, or repeal."
The Registrant has entered into agreements to indemnify its directors in
consideration of their agreement to serve as directors of the Registrant and
certain other corporations requested by the Registrant. These agreements
provide, among other things, that the Registrant will indemnify and advance
certain expenses, including attorneys' fees, to such directors to the fullest
extent permitted by applicable law, as such law may be amended from time to
time, and by the Registrant's Certificate of Incorporation, By-Laws and
resolutions.
The Company presently maintains a "Directors & Officers Liability and
Corporate Reimbursement" insurance policy with a $2,500,000 aggregate limit of
liability in each policy year. The policy provides coverage to past, present and
future directors and officers of the Company and its subsidiaries for losses
resulting from claims for which any such officer or director was not indemnified
by the Company. The policy also provides for reimbursement to the Company and
its subsidiaries for amounts paid to indemnify officers and directors for loss
resulting from claims against such officers and directors. The policy is subject
to certain exclusions, such as claims
II-2
against officers and directors for dishonest, fraudulent or criminal acts or
omissions, willful violations of law, libel and slander, bodily injury and
property damage, pollution, etc.
Item 16. Exhibits
The Exhibits to this registration statement on Form S-3 are listed in the
Exhibit Index which appears elsewhere herein and is incorporated herein by
reference.
Item 17. Undertakings
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described above in Item 15, 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of 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 its
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 and will be governed by
the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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 the 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 the 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, if applicable, may be reflected in
the form of prospectus filed with the Commission
II-3
pursuant to Rule 424(b) of the Securities Act if, in the aggregate,
the 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 the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (c)(1)(i) and (c)(1)(ii) above do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(d) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated herein by reference shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York on November 4, 1998.
AMPEX CORPORATION
By:/s/ Craig L. McKibben
Craig L. McKibben
Vice President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
Each person signing below also hereby appoints Edward J. Bramson, Craig L.
McKibben and Joel D. Talcott, and each of them singly, his lawful
attorney-in-fact, with full power to execute and file any amendments to the
registration statement, and generally to do all such things, as such
attorney-in-fact may deem appropriate to comply with the provisions of the
Securities Act of 1933 and all requirements of the Securities and Exchange
Commission.
Signatures Title Date
/s/ Edward J. Bramson Chairman, President, Chief Executive November 4, 1998
Edward J. Bramson Officer and Director
(Principal Executive Officer)
/s/ Craig L. McKibben Vice President, Director, Chief November 4, 1998
Craig L. McKibben Financial Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Douglas T. McClure, Jr. Director November 4, 1998
Douglas T. McClure, Jr.
/s/ Peter Slusser Director November 4, 1998
Peter Slusser
/s/ William A. Stoltzfus, Jr. Director November 4, 1998
William A. Stoltzfus, Jr.
II-5
INDEX TO EXHIBITS
Exhibits
2.1 Acquisition Agreement, dated as of June 24, 1998, among the Registrant,
Ampex Holdings Corporation ("Holdings") and the several selling
shareholders named therein ("Sellers"), together with exhibits thereto
(filed as Exhibit 4.3 to the Registrant's Form 8-K dated July 17, 1998 and
incorporated herein by reference)
2.2 Supplement to Acquisition Agreement, dated June 30, 1998, among the
Registrant, Holdings and the Sellers (filed as Exhibit 4.4 to the
Registrant's Form 8-K dated July 17, 1998 and incorporated herein by
reference)
2.3 Second Supplement to Acquisition Agreement, dated July 16, 1998, among the
Registrant, Holdings and the Sellers (filed as Exhibit 4.5 to the
Registrant's Form 8-K dated July 17, 1998 and incorporated herein by
reference)
2.4 Escrow Agreement dated July 17, 1998, among Holdings, the Registrant, the
Sellers and IBJ Schroder Bank & Trust Company, as escrow agent, and
attachments thereto
4.1 Restated Certificate of Incorporation of the Registrant dated June 1, 1993
(filed as Exhibit 4.01 to the Registrant's Form 10-Q for the quarter ended
March 31, 1993 and incorporated herein by reference); Certificate of
Amendment of Restated Certificate of Incorporation of the Registrant filed
with the Secretary of State of Delaware on April 22, 1994 (filed as Exhibit
3.2 to the Registrant's Form 8-K filed on May 2, 1994 and incorporated
herein by reference); and Certificate of Amendment of Restated Certificate
of Incorporation of the Registrant filed with the Secretary of State of
Delaware on April 20, 1995 (filed as Exhibit 4.1 to the Registrant's Form
10-Q for the quarter ended March 31, 1995 (the "First Quarter 1995 10-Q")
and incorporated herein by reference)
4.2 Certificate of Designations, Preferences and Rights of the Registrant's 8%
Noncumulative Convertible Preferred Stock and 8% Noncumulative Redeemable
Preferred Stock (filed as Exhibit 3.1 to the Registrant's Form 8-K dated
July 2, 1998 and incorporated herein by reference)
4.3 By-Laws of the Registrant, as amended through April 20, 1995 (filed as
Exhibit 4.2 to the First Quarter 1995 10-Q and incorporated herein by
reference)
4.4 Form of Class A Common Stock Certificate (filed as Exhibit 4.4 to the
Registrant's Post- Effective Amendment No. 1 on Form S-3 to Form S-1 (File
No. 33-91312) and incorporated herein by reference)
4.5 Registration Rights Agreement dated July 15, 1998, among the Registrant and
the shareholders named therein (filed as part of Exhibit 4.3 to the
Registrant's Form 8-K dated July 17, 1998 and incorporated herein by
reference)
5.1 Opinion of Battle Fowler LLP as to legality of securities
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Ernst & Young LLP, Independent Auditors
II-6
23.3 Consent of Battle Fowler LLP (included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included in the signature pages of this registration
statement)
II-7
Exhibit 2.4
ESCROW AGREEMENT
----------------
ESCROW AGREEMENT, dated July 17, 1998, by and among AMPEX HOLDINGS
CORPORATION, a Delaware corporation ("Buyer"), AMPEX CORPORATION, a Delaware
corporation ("Parent"), each of the shareholders named as signatories hereto
("Sellers"), and IBJ SCHRODER BANK & TRUST COMPANY, as escrow agent (the "Escrow
Agent").
Concurrently herewith, pursuant to an Acquisition Agreement, dated June 24,
1998 (the "Acquisition Agreement"), by and among Buyer, Parent, and Sellers,
Buyer is purchasing all of the issued and outstanding shares of common stock of
MicroNet Technology, Inc., a Delaware corporation (the "Company") owned by
Sellers. Except as defined herein, all capitalized terms used herein shall have
the same meanings ascribed to them in the Acquisition Agreement. This Escrow
Agreement is being entered into pursuant to Section 2(a) of the Acquisition
Agreement for the purpose of securing to Buyer the right to be indemnified by
Sellers from and against claims against the Company (hereinafter, "Claims") in
accordance with the terms and conditions set forth in this Escrow Agreement and
Section 11 of the Acquisition Agreement. In consideration of the execution of
the Acquisition Agreement and the agreements and covenants contained herein,
Sellers, Parent and Buyer agree, and in consideration of the agreements and
covenants contained herein, the Escrow Agent agrees, as follows:
I. ESCROWED FUND
1.01 Concurrently with the execution of this Escrow Agreement, Buyer is
delivering to the Escrow Agent 720,000 shares of Parent's Class A Common Stock
(the "Class A Stock") and 3,500 shares of the 8% Noncumulative Junior Preferred
Stock, Series A (the "Preferred Stock" and, collectively with the shares of
Class A Stock, the "Shares") of the Company (the "Escrowed Fund"), the receipt
of which is hereby acknowledged by the Escrow Agent. 1.02 Subject to the
provisions of this Escrow Agreement, the Escrow Agent will from time to time
invest and reinvest all cash proceeds held in the Escrow Fund (including,
without limitation, dividends and other distributions received on or in respect
of the Shares (the "Escrowed Income") in such direct obligations of the United
States Government, or in certificates of deposit issued by the Escrow Agent or
any United States bank or trust company having a combined capital and surplus of
at least $100,000,000, as Sellers shall instruct in writing, provided, however,
that the Escrow Agent shall not be required to invest or reinvest the Escrowed
Income or pay interest if such amount to be invested or reinvested is less than
$25,000. Upon delivery of any Shares pursuant to this Escrow Agreement, the
recipient thereof shall also receive a portion of the Escrowed Income determined
by multiplying the then existing Escrowed Income by a fraction the numerator of
which equals the number of such Shares delivered and the denominator of which
equals the total of all Shares then held in the Escrowed Fund.
2
1.03 Sellers and Buyer and the Escrow Agent agree that the Escrow Agent
will hold the Escrowed Fund in its possession, under the provisions of this
Escrow Agreement, until authorized hereunder to deliver the Escrowed Fund or any
specified portion thereof as follows:
(a) In the event that, and from time to time on or prior to June 30, 2000
(the "Last Claim Date"), Buyer reasonably determines that a Claim is or may be
chargeable against the Escrowed Fund, Buyer will promptly deliver to the Escrow
Agent and Sellers in writing a notice of Claim (each a "Claim Notice"), in the
form of Exhibit B hereto, identifying such Claim with reasonable specificity
based on the information then available to Buyer, and stating the amount or a
reasonably estimated amount thereof and the manner in which such amount is to be
delivered to Buyer and referencing the Section of the Acquisition Agreement
pursuant to which the Claim is being made. Promptly upon receipt by the Escrow
Agent of a Claim Notice, the Escrow Agent shall send a copy to Sellers thereof,
and unless the Escrow Agent receives notice from Sellers disputing such Claim
Notice (a "Dispute Notice") pursuant to Section 1.03(c) hereof within the thirty
day period following the giving by the Escrow Agent of such notice (which period
shall exclude the day Escrow Agent sends notice to Sellers but include the
thirtieth day) (the "Thirty Day Notice Period"), the Escrow Agent will release
and deliver to Buyer that portion of the Escrowed Fund equal to a number of
shares of Class A Stock from the Escrowed Fund determined by dividing the amount
of the Claim by the Closing Stock Price (as defined below), or if there are no
remaining shares of Class A Stock in the Escrowed Fund, a number of shares of
Preferred Stock determined by dividing the amount of the Claim by $1,000. The
term "Closing Stock
3
Price" shall mean the average of the closing prices of the Class A Stock as
reported on the American Stock Exchange for the five Ampex trading day period
ending on the second Ampex trading day before the date of determination.
Provided that the Escrow Agent shall have no responsibility for determining the
Closing Stock Price and may rely exclusively upon Ampex and Sellers for such
determination.
(b) Notwithstanding anything to the contrary herein, none of the Escrowed
Fund will be released and delivered to Buyer pursuant to any Claim Notice except
to the extent that the aggregate amount of all Claims exceeds the sum of $50,000
(the "Basket Amount"), and then only to the extent of such excess.
(c) Sellers will have the right to reasonably dispute the asserted Claim by
delivering to the Escrow Agent, within the Thirty Day Notice Period, a Dispute
Notice. Each Dispute Notice shall describe with reasonable specificity based on
the information then available to Sellers, the basis of Sellers' dispute. Upon
receipt of a Dispute Notice from Sellers, the Escrow Agent shall set aside in a
separate fund (the "Disputed Fund") the Shares which it would have delivered to
Buyer had such notice from Sellers not been received. The Escrow Agent shall
distribute the Shares held in the Disputed Fund only upon delivery of, and in
accordance with, written notice signed jointly by Sellers and Buyer providing
instructions therein.
(d) Sellers and Buyer hereby agree that, unless and until otherwise agreed
to by Sellers and Buyer, upon obtaining a Final Determination (as hereinafter
defined) with respect to any dispute concerning Shares held in the Disputed
Fund, Sellers and Buyer shall promptly deliver joint written notice to the
Escrow Agent instructing the Escrow Agent to
4
release such Shares in accordance with the terms of said Final Determination a
copy of the Final Determination and an Opinion of Counsel reasonably
satisfactory to Escrow Agent to the effect that such order is in effect and
meets the definition of "Final Determination" contained herein that Escrow Agent
may conclusively rely upon it. The term "Final Determination" shall mean a
settlement between Buyer and Sellers, entry of a final order, decree or judgment
by a court of competent jurisdiction in the United States of America (the time
for appeal therefrom having expired and no appeal having been perfected), or
consent to entry of any judgment concerning a Claim. If, in accordance with the
terms of the Final Determination any Shares to be released from the Disputed
Fund are not to be delivered to Buyer, Sellers and Buyer shall deliver written
notice to the Escrow Agent instructing the Escrow Agent to cause such Shares to
be held in the Escrowed Fund until released pursuant to this Section 1.03;
provided, however, that, at the time of such release of Shares from the Disputed
Fund which are not to be delivered to Buyer, if there are outstanding any
Claims, made in a timely manner hereunder, which are not secured by the Disputed
Fund, the joint written notice of Sellers and Buyer shall instruct the Escrow
Agent to retain Shares in the Escrowed Fund necessary to secure such outstanding
Claim. In the event that either party shall refuse to deliver such written
notice to the Escrow Agent within fifteen days following the receipt of a final
order, decree or judgment by a court of competent jurisdiction in the United
States of America, the Escrow Agent shall be entitled to act on the basis of
such final order, decree or judgment duly authenticated by such court.
(e) If the Shares necessary to satisfy any disputed Claim, that has been
ultimately determined pursuant to a Final Determination in the manner herein
provided, is in
5
excess of the Shares held in the Disputed Fund with respect thereto, additional
Shares necessary to satisfy such Claim shall be delivered from the Escrowed Fund
to Buyer. However, in the absence of sufficient Shares in the Escrowed Fund, no
additional Shares shall be paid by Sellers to Buyer and Escrow Agent will have
no further duty with respect to such Claim.
(f) On September 30, 1998 (or such later date as the Escrow Agent may be
notified in writing of), the Escrow Agent shall release and deliver to Sellers a
number of shares of Class A Stock equal to one-half of the shares issued to
Sellers pursuant to Section 1(a) of the Acquisition Agreement (360,000 shares of
720,000 shares issued) reduced by (i) the number of shares of Class A Stock, if
any, theretofore released to Buyer in satisfaction of any Claim in accordance
with this Agreement and (ii) the number of shares of Class A Stock, if any, then
held in the Disputed Fund. On March 31, 1999, the Escrow Agent shall release and
deliver to Sellers all shares of Preferred Stock then held in the Escrowed Fund
(except for shares of Preferred Stock, if any, then held in the Disputed Fund).
Shares released and delivered to Sellers shall thereafter no longer be subject
to any claims by Buyer. Any Shares from the Disputed Fund not released and
delivered to Buyer after the Final Determination pursuant thereto shall be
released and delivered to Sellers on the Last Claim Date.
(g) On the Last Claim Date, the Escrow Agent shall deliver to Sellers the
Shares remaining in the Escrowed Fund, except for such amounts relating to
Claims with respect to which Buyer has given notice to the Escrow Agent and to
Sellers as provided in Section 1.03(a) hereof and any Shares held in the
Disputed Fund. With respect to any
6
Claims that are not resolved as of the Last Claim Date, the provisions of this
Escrow Agreement shall continue in full force and effect and govern the rights
of the parties with respect to all such Claims, except that on the date of any
Final Determination regarding Claims for which amounts are held in the Disputed
Fund, to the extent that any dispute is resolved in favor of Buyer as provided
in Article II hereof, the Shares held in the Disputed Fund shall be distributed
to Buyer and to the extent that any dispute is resolved in favor of Sellers as
provided in Article II hereof, the Shares held in the Disputed Fund shall be
distributed to Sellers. If after the Final Determination of all Claims, any
amounts remain in the Escrowed Fund or in the Disputed Fund, such Shares shall
be distributed to Sellers as soon thereafter as practicable.
1.04 This Escrow Agreement shall remain in full force and effect until, and
shall terminate upon, the release of all amounts held in the Escrowed Fund
pursuant to Section 1.03 hereof.
1.05 Shares held in the Escrowed Fund may be voted by the registered
holders thereof until delivered to Buyer pursuant to this Escrow Agreement.
1.06 Buyer and Parent agree that at any time and from time to time after
the second anniversary of the Closing, Sellers may, upon not less than 10
business days' written notice to the Escrow Agent and Buyer, substitute for the
Shares then held in the Escrowed Fund, including any Shares in the Disputed
Fund, collateral of a type constituting permissible investments under Section
1.02 hereof. Any such collateral shall have an aggregate principal amount,
valued at the lower of cost or market price on the business day preceding the
date of substitution, of not less than the total of the Closing Stock Price
multiplied by the number of
7
Shares being withdrawn by Sellers. All questions concerning the valuation of
substitute collateral, and the form and methods of effectuating such
substitution shall be determined in the reasonable judgment of Buyer.
II. SETTLEMENT OF DISPUTES.
Any dispute which may arise with respect to the Escrowed Fund shall be
settled either by mutual agreement of the parties concerned (evidenced by
appropriate instructions in writing to the Escrow Agent signed by the parties
concerned) or by entry of a final order, decree or judgment by a court of
competent jurisdiction in the United States of America (the time for appeal
therefrom having expired and no appeal having been perfected). Subject to the
provisions of Section 4.07 hereof, Sellers, on the one hand, and Buyer, on the
other hand, shall each bear all of the fees and expenses incurred by it in
resolving any dispute arising under this Agreement. The Escrow Agent shall be
under no duty to institute or defend any such proceedings and none of the costs
and expenses of any such proceeding shall be borne by the Escrow Agent. Prior to
the settlement of any dispute as provided in this Article II, the Escrow Agent
is authorized and directed to retain in its possession, without liability to
anyone, such portion of the Escrowed Fund, including the Disputed Fund, which is
the subject of or involved in the dispute.
III. CONCERNING THE ESCROW AGENT.
3.01 The Escrow Agent shall be entitled to reasonable compensation for its
services hereunder and shall be reimbursed for all reasonable expenses,
disbursements and advances (including reasonable attorneys' fees and expenses)
incurred or made by it in performance of its duties hereunder. Buyer and Sellers
shall each pay one-half of all such reasonable
8
compensation, disbursements, expenses and advances, which, until so paid, will
constitute, along with any amounts due under Section 3.04 hereof, a first lien
against the Escrowed Fund.
3.02 The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice of such resignation to Sellers and Buyer
specifying a date (not less than 30 days after the giving of such notice) when
such resignation shall take effect. Promptly after such notice, Sellers and
Buyer shall appoint a successor escrow agent, such successor escrow agent to be
the Escrow Agent hereunder upon the resignation date specified in such notice.
If Sellers and Buyer are unable to agree upon a successor escrow agent within 30
days after such notice, the Escrow Agent shall be entitled to either appoint its
successor or, at the joint and several expense of Sellers, on the one hand, and
Buyer, on the other hand, petition any court of competent jurisdiction to
appoint its successor. The Escrow Agent shall continue to serve until its
successor accepts the escrow and receives the Escrowed Fund. Sellers and Buyer
may agree at any time to substitute a new escrow agent by giving 15 days' notice
thereof to the Escrow Agent then acting. The Escrow Agent and any successor
thereto appointed hereunder shall be a bank or trust company located in New
York, New York which has a combined capital and surplus of at least
$100,000,000.
3.03 The Escrow Agent undertakes to perform only such duties as are
specifically set forth herein, and specifically with respect to Section 1.02
hereof shall have no responsibility thereunder other than to invest the Escrowed
Fund held hereunder in the amounts and as specified in the instructions provided
for therein. The Escrow Agent, acting or refraining from acting in good faith,
shall not be liable for any mistake of fact or error of
9
judgment by it or for any acts or omissions by it of any kind unless caused by
willful misconduct or gross negligence, and shall be entitled to rely, and shall
be fully protected in doing so, upon (i) any written notice, instrument or other
document provided for herein or signature believed by it to be genuine and to
have been signed or presented by the proper party or parties duly authorized to
do so, and (ii) the advice of counsel (which may be of the Escrow Agent's own
choosing, but shall not be counsel to any other party hereto). The Escrow Agent
shall not be liable either for any lost interest on the Escrowed Fund,
including, but not limited to, any loss which results from the failure of
Sellers to provide adequate instruction pursuant to Section 1.02 hereof or for
any loss incurred in connection with the investment of the Escrowed Fund
pursuant to instruction of Seller or, as provided in Section 1.02 hereof,
changes in investments which are necessary to make distributions of the Escrowed
Fund.
IV. MISCELLANEOUS
4.01 This Agreement will be binding upon, inure to the benefit of, and be
enforceable by the respective beneficiaries, representatives, successors and
permitted assigns of the parties hereto, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
with respect to the Escrow Agent as provided in Article III hereof.
4.02 This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and may be amended only by a written
instrument duly executed by Sellers, Buyer and the Escrow Agent.
10
4.03 All notices, claims, requests, demands and other communications
hereunder shall be in writing and shall be given as follows:
If to Buyer or Parent:
Ampex Corporation
500 Broadway
Redwood City, California 94063
Attention: General Counsel
Copy to:
Battle Fowler LLP
75 East 55 Street
New York, New York 10022
Attention: David D. Griffin, Esq.
If to Sellers:
Kibel, Green Inc.
2001 Wilshire Boulevard, Suite 420
Santa Monica, California 90403
Attention: Adam Michelin
Copy to:
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Telecopier No. (310) 443-8569
Attention: Scott Alderton, Esq.
If to the Escrow Agent:
IBJ Schroder Bank & Trust Company
One State Street Plaza - 11th Floor
New York, NY 10004
Attention: Corporate Trust & Agencies Dept.
11
or to such other address as the persons to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth below,
provided that notices of changes of address shall only be effective upon
receipt. A notice given in accordance with the preceding sentence shall be
deemed to have been duly given if delivered or mailed registered or certified
mail, postage prepaid, return receipt requested or if personally delivered on
the date of receipt or refusal indicated on the return receipt. Any notice
delivered by Sellers or Buyer to the Escrow Agent pursuant hereto shall be
executed by the President, any Vice President, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of said party. Sellers, on the
one hand, and Buyer, on the other hand, shall be obligated to deliver to the
other party a copy of each notice delivered to the Escrow Agent hereunder
concurrently with the delivery of such notice to the Escrow Agent. The Escrow
Agent shall be required to give each of Sellers and Buyer at least forty-eight
hours written notice prior to the release of any portion of the Escrowed Fund to
any party hereunder.
4.04 Adam Michelin is hereby appointed the agent (the "Sellers Agent") of
the Sellers for the purposes of receiving all notices, giving all notices,
giving all approvals and doing all other things and exercising all other rights
of the Sellers hereunder. If at any time while this Escrow Agreement is still in
effect, the Sellers Agent (including any successor thereto) should cease to act
as Sellers Agent for any reason, then the substitute agent (the "Substitute
Sellers Agent") named herein shall immediately become the Sellers' Agent without
further action by the Sellers and the Sellers shall promptly appoint a new
Substitute Sellers Agent by an instrument in writing delivered to Buyer and the
Escrow Agent. Joseph
12
E. Ferguson is hereby appointed the initial Substitute Sellers' Agent. Sellers
and the Escrow Agent may continue to deal with said Sellers Agent until Sellers
have received notice that he has ceased so to act and that the Substitute
Sellers Agent is then acting. Buyer and the Escrow Agent are entitled to rely
upon any agreement, certificate or other notice from the Sellers' Agent as being
binding upon the Sellers.
4.05 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without regard to its
conflicts of law rules.
4.06 This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
4.07 Article headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
4.08 The Escrow Agreement Terms and Conditions attached hereto as Exhibit A
are expressly made a part hereof.
[END OF TEXT]
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IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and
delivered by and on behalf of Sellers, Buyer, Parent and the Escrow Agent on the
date first above written.
AMPEX HOLDINGS CORPORATION
By: /s/ Craig L. McKibben
Title: Vice President
AMPEX CORPORATION
By: /s/ Craig L. McKibben
Title: Vice President
SELLERS:
/s/ Jason Barzilary
Name: Jason Barzilary
/s/ Beny Alagem
Name: Beny Alagem
/s/ Alex Sandel
Name: Alex Sandel
/s/ Sara Sandel
Name: Sara Sandel
CHLOE HOLDINGS, INC., a California
corporation
By: /s/ Diana Maranon
Diana Maranon
President
14
KLINE HAWKES MICRONET PARTNERS LLC,
a Delaware limited liability company
By: Kline Hawkes Management SBIC, L.P.
By: Kline Hawkes Management
SBIC, Inc., its general
partner
By:/s/Joseph E. Ferguson
Name: Joseph E. Ferguson
Title: Partner
IBJ SCHRODER BANK & TRUST COMPANY
as Escrow Agent
By:/s/Terence Rawlins
Title: Terence Rawlins
Assistant Vice President
Exhibit A
ESCROW AGREEMENT
TERMS AND CONDITIONS
These following Terms and Conditions are incorporated into and form a part of
the Escrow Agreement to which this Exhibit A is attached, as entered into by and
among IBJ Schroeder Bank & Trust Company, a banking corporation organized under
the laws of the State of New York (the "Escrow Agent"), Ampex Holdings
Corporation, a Delaware corporation ("Buyer"), Ampex Corporation, a Delaware
corporation ("Parent" and, together with Buyer, "Ampex"), and each of the
selling shareholders named in the Escrow Agreement ("Sellers").
A. It is understood and agreed that the duties of the Escrow Agent are purely
ministerial in nature. It is further agreed that:
(a) the Escrow Agent shall not be responsible for the performance of Ampex
or Sellers under this Escrow Agreement or any other agreement;
(b) the Escrow Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any document, instrument, certificate,
instruction or signature believed by it to be genuine and may assume and shall
be protected in assuming that any person purporting to give any notice or
instructions in accordance with this Escrow Agreement or in connection with any
transaction to which this Escrow Agreement relates has been duly authorized to
do so. The Escrow Agent shall not be obligated to make any inquiry as to the
authority, capacity, existence or identity of any person purporting to have
executed any such document or instrument or have made any such signature or
purporting to give any such notice or instructions;
(c) in the event any party to this agreement instructs the Agent to
disburse funds from the Escrow to any party other than Ampex or Sellers (i) the
Agent shall disburse such funds by mailing a check to such party at the address
set forth in the instruction; or (ii) if the Agent is instructed to transfer
funds from the Escrow to any bank for the account of any other party, the Escrow
Agent may refuse to comply unless the Escrow Agent can verify to its
satisfaction that the instruction is authentic and correct or the party issuing
the instruction has previously agreed to other appropriate security procedures
relating thereto;
(d) the Escrow Agent undertakes to perform only such duties as are
expressly set forth in the Escrow Agreement and shall not be bound in any way by
any agreement between Ampex and Sellers (whether or not the Escrow Agent has
knowledge thereof); (e)the Escrow Agent shall not assume any responsibility or
liability for the completeness, correctness or accuracy of the Escrow or for any
transactions between Ampex and Sellers.
B. Ampex and Sellers jointly and severally agree to indemnify the Escrow
Agent, its directors, officers, agents and employees and any person who
"controls" the Escrow Agent within the meaning of Section 15 of the
Securities Act of 1933, as
amended (collectively the "Indemnified Parties") against, and hold them
harmless from, any and all loss, liability, cost, damage and expense,
including, without limitation, costs of investigation and reasonable
counsel fees and expenses, which any of the Indemnified Parties may suffer
or incur by reason of any action, Claim or proceeding brought against any
of the Indemnified Parties, arising out of or relating in any way to this
Escrow Agreement or any transaction to which this Escrow Agreement relates,
other than any action, Claim or proceeding resulting from the gross
negligence or willful misconduct of such Indemnified Party. The provisions
of this paragraph shall survive the termination of this Escrow Agreement.
C. This Escrow Agreement may be altered, amended or terminated only with the
written consent of Ampex, Sellers and the Escrow Agent. Should Ampex and
Sellers attempt to change this Escrow Agreement in a manner which, in the
Escrow Agent's sole opinion, is undesirable, the Escrow Agent may resign as
Escrow Agent upon two weeks' written notice to Ampex and Sellers;
otherwise, notwithstanding any provision hereof to the contrary, it may
resign as Escrow Agent at any time upon 60 days' written notice to Ampex
and Sellers.
In the case of the Escrow Agent's resignation, its only duty shall be to
hold and dispose of the Escrow in accordance with the original provisions
of this Escrow Agreement until a successor Escrow Agent shall be appointed
by Ampex and Sellers and a written notice of the name and address of such
successor escrow agent shall be given to the Escrow Agent by Ampex and
Sellers, whereupon the Escrow Agent's only duty shall be to turn over, in
accordance with the written instructions of Ampex and Sellers, to the
successor escrow agent the Escrow. In the event that a successor escrow
agent shall not have been appointed and the Escrow Agent shall not have
turned over to the successor escrow agent the Escrow within the time
periods specified above, of the Escrow Agent's written notice of
resignation, as the case may be, the Escrow Agent may deposit the Escrow
with the Clerk of the United States District Court for the Southern
District of New York or with the clerk or registry of any other court of
competent jurisdiction, at which time the Escrow Agent's duties hereunder
shall terminate.
D. The Escrow Agent shall be entitled to an acceptance fee of $1,500 upon
execution of this Escrow Agreement. In addition, the Escrow Agent shall
receive a fee of $3,500 per year, or part thereof (payable in advance) as
well as reasonable expenses incurred in connection with the preparation or
performance of this Escrow Agreement, including, but not limited to,
reasonable counsel fees.
E. This Escrow Agreement shall be binding upon the parties hereto and their
respective successors and assigns; provided, however, that any assignment
or
transfer by any party of its rights under this Escrow Agreement or with
respect to the Escrow shall be void as against the Escrow Agent unless:
1. written notice thereof shall be given to the Escrow Agent; and
2. the Escrow Agent shall have consented, in writing, to such assignment
or transfer.
SCHEDULE A
Upon receipt of disbursement instructions from Ampex directing the Escrow Agent
to release Shares or disburse amounts from the Escrow Funds, the Escrow Agent
will confirm the instructions set forth in such notice with one of the
authorized individual(s) listed below at an authorized telephone number
appearing opposite such individual's name:
Authorized Individual(s) Authorized Telephone
of the Ampex Numbers(s)
Edward J. Bramson 212-759-6301
Craig L. McKibben 212-759-6301
David D. Griffin 212-856-7076
SCHEDULE B
Upon receipt of disbursement instructions from the Sellers directing the Escrow
Agent to release Shares or disburse amounts from the Escrow Funds, the Escrow
Agent will confirm the instructions set forth in such notice with one of the
authorized individual(s) listed below at an authorized telephone number
appearing opposite such individual's name:
Authorized Individual(s) Authorized Telephone
of the Sellers Numbers(s)
Adam Michelin 310-829-0255
Scott Alderton, Esq. 310-443-7569
Exhibit B
FORM OF CLAIM NOTICE
To: IBJ Schroder Bank & Trust Company, as Escrow Agent pursuant to Escrow
Agreement, dated July 15, 1998, by and between Ampex Holdings Corporation,
Ampex Corporation and each of the shareholders named therein.
From: Ampex Holdings Corporation
CC: [Seller's Agent]
Re: Claim Against Escrow Fund
Amount of
Claim: $ ____________
Basis for
Claim: ______________
Additional
Description of
Circumstances
giving rise
to Claim: ______________
FF2/110754_1
Exhibit 5.1
BATTLE FOWLER LLP
PARK AVENUE TOWER
75 EAST 55TH STREET
NEW YORK, NEW YORK 10022-3205
(212) 856-7000
Writer's Direct Dial Number
(212) 856-7076
Writer's Direct Facsimile Number
(212) 856-7816
Writer's Direct E-Mail
November 4, 1998
Ampex Corporation
500 Broadway
Redwood City, CA 94063
Re: Registration of 720,000 Shares of Class A Common Stock
Ladies and Gentlemen:
We have acted as counsel for Ampex Corporation, a Delaware corporation the
"Company"), in connection with the preparation and filing of a registration
statement on Form S-3 (the "Registration Statement"), pursuant to which the
Company proposes to register for sale up to 720,000 shares of the Company's
Class A Common Stock, par value $.01 per share (the "Shares"). Capitalized terms
used and not defined herein shall have the meanings given to them in the
Registration Statement. You have requested that we furnish our opinion as to the
matters hereinafter set forth.
For the purposes of this letter, we have examined originals or copies of
the following:
1. Registration Statement,to which this opinion is an exhibit;
2. The Amended and Restated Certificate of Incorporation of the Company, as
amended to date, incorporated by reference as an exhibit to the
Registration Statement (the "Certificate of Incorporation");
3. By-Laws of the Company, as amended to date, incorporated by reference as an
exhibit to the Registration Statement (the "By-Laws");
BATTLE FOWLER LLP PAGE 2
Ampex Corporation November 4, 1998
4. A specimen certificate for the Company's Class A Common Stock, incorporated
by reference as an exhibit to the Registration Statement;
5. Records of corporate proceedings of the Company as certified to us by an
officer of the Company relative to the authorization and issuance of the
Shares;
6. Such other documents as we have deemed necessary as a basis for rendering
the opinion herein expressed.
In rendering the opinions herein expressed we have assumed the genuineness
of all signatures, the authenticity of all documents, instruments and
certificates submitted to us as originals, the conformity with the original
documents, instruments and certificates of all documents, instruments and
certificates submitted to us as copies and the legal capacity to sign of all
individuals executing such documents, instruments and certificates (the
"Documents"). In addition, we have assumed, other than with respect to those
signing on behalf of the Company, that all signatories of any Documents have
been duly authorized, pursuant to all applicable laws, regulations, corporate
charters and governing documents, to execute said Documents. As to facts
material to the Company, including without limitation, the representations and
statements made in an officers' fact certificate furnished to us in connection
with the preparation of this opinion, and upon representations made in any of
the other Documents referred to above.
We are not admitted to practice in any jurisdiction but the State of New
York and we do not express any opinion as to the laws of states or jurisdictions
other than the State of New York and matters of federal law and the Delaware
General Corporation Law. No opinion is expressed as to the effect that the laws
of any other jurisdiction may have upon the subject matter of the opinions
expressed herein under conflicts of law principles or otherwise.
On the basis of and in reliance upon the foregoing, and subject to the
foregoing limitations, qualifications and exceptions, we are of the opinion that
the Shares have been duly authorized and issued, and, assuming receipt by the
Company of the requisite consideration therefor, are fully-paid and
non-assessable.
BATTLE FOWLER LLP PAGE 3
Ampex Corporation November 4, 1998
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this opinion and to the
references to this firm under the caption "Legal Matters" in the Prospectus
forming a part of the Registration Statement. In giving this consent, we do not
admit thereby that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Commission.
Very truly yours,
/s/Battle Fowler LLP
FF2/110249_1
Exhibit 23.1
CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS
333 Market Street
San Francisco, California 94105-2119
We consent to the incorporation by reference in the registration statement of
Ampex Corporation on Form S-3 of our reports, dated February 20, 1998, on our
audits of the consolidated financial statements and financial statement schedule
of Ampex Corporation, which reports appears in the Annual Report on Form 10-K
filed by Ampex Corporation for its fiscal year ended December 31, 1997. We also
consent to the reference to our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
San Francisco, California
November 4, 1998
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Ampex Corporation
for the registration of 720,000 shares of its common stock and to the
incorporation by reference therein of our reports dated July 14, 1998 and August
24, 1998, with respect to the consolidated financial statements of MicroNet
Technology, Inc. included in Ampex Corporation's Current Report on Form 8-K/A
filed with the Securities and Exchange Commission on October 16, 1998.
/s/ Ernst & Young LLP
Orange County, California
November 3, 1998
