These stabilizing transactions, may have the effect of raising or maintaining the market price of our
common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor
the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may be effected on the NASDAQ Global Select Market, in the
over-the-counter
market or otherwise and, if commenced, may be discontinued at any time.
Passive Market Making.
In connection with this offering, the underwriter and selling group members, if any, may engage in
passive market making transactions in our common stock on the NASDAQ Global Select Market in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers or sales of common stock and extending
through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market makers bid,
such bid must then be lowered when specified purchase limits are exceeded.
Lock-Up
Agreements.
Pursuant to certain
lock-up
agreements, we and the selling stockholders, have agreed, subject to certain exceptions, not to offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of or announce the intention to otherwise dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole or in part, the economic consequence of
ownership of, directly or indirectly, or make any demand or request or exercise any right with respect to the registration of, or file with the SEC a registration statement under the Securities Act relating to, any common stock or securities
convertible into or exchangeable or exercisable for any common stock held prior to the date of this offering without the prior written consent of the representatives, for a period of 90 days after the date of the pricing of the offering.
This
lock-up
provision applies to common stock and to securities convertible into or exchangeable or exercisable
for common stock. The exceptions permit us, among other things and subject to restrictions, to: (a) issue common stock or options pursuant to employee benefit plans, (b) issue common stock upon exercise of outstanding options or warrants
(c) issue securities in connection with acquisitions, joint ventures, commercial arrangements or similar transactions in an amount not to exceed 10% of the total number of shares of our common stock outstanding following the completion of any
such transaction, or (d) file registration statements on Form
S-8.
The exceptions permit parties to the
lock-up
agreements, among other things and
subject to restrictions, to: (a) make certain gifts, (b) if the party is a corporation, partnership, limited liability company or other business entity, make transfers to any shareholders, partners, members of, or owners of similar equity
interests in, the party, or to an affiliate of the party, if such transfer is not for value, (c) if the party is a corporation, partnership, limited liability company or other business entity, make transfers in connection with the sale or
transfer of all of the partys capital stock, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially all of the partys assets, in any such case not undertaken for the
purpose of avoiding the restrictions imposed by the
lock-up
agreement and (d) enter into trading plans providing for the sale of common stock which meet the requirements of Rule 10b5-1(c)
under the Exchange Act, provided that such plan does not provide for, or permit, the sale of any common stock during the term of the lock-up. In addition, the
lock-up
provision will not restrict
broker-dealers from engaging in market making and similar activities conducted in the ordinary course of their business.
The underwriter, in its
sole discretion, may release our common stock and other securities subject to the
lock-up
agreements described above in whole or in part at any time. When determining whether or not to release our common stock
and other securities from
lock-up
agreements, the underwriter will consider, among other factors, the holders reasons for requesting the release, the number of shares for which the release is being
requested and market conditions at the time of the request.
S-31