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Shares Eligible for Future Sale; Probable Resale of Common Stock Issued in connection with Settlement of Shareholder Class Action Litigation
Sales of shares of Common Stock into the market by Proactive, employees exercising options or recipients of shares to be distributed in settlement of the Company's shareholder class action litigation escrow could cause a decline in the price of such stock. The shares of the Common Stock owned by Proactive will be freely tradeable, subject to the resale limitations of Rule 144, as promulgated by the U.S. Securities and Exchange Commission, that are applicable to an affiliate of the Company, after a minimum of one year has elapsed from the date on which Proactive acquired such shares. In addition, if the Company purposes to register any of its securities under the Securities Act of 1933, as amended, whether for its own account, for the account of other shareholders or both, Proactive is entitled to notice of such registration and is entitled to include its shares of the Company's Common Stock in the registration.
DTM employees hold immediately exercisable options to purchase 417,000 shares of Common Stock. The Company registered the issuance and the sale of the shares of Common Stock that would be issued upon exercise of options under the stock option plans on a Form S-8 Registration Statements. As a result, the Common Stock acquired by employees of DTM upon exercise of options outstanding under the stock option plans will be freely tradeable (subject to compliance with certain provisions of Rule 144, in the case of affiliates of the Company).
The non-cash component of the settlement of the shareholder class action resulted in the issuance of 334,485 shares of the Company's Common Stock into a settlement escrow on February 4, 1999. Such shares are freely tradable. The escrow agent has advanced the Company, that the escrow agent intends to sell such shares prior to the planned May 1999 distribution to the recipients of the settlement sales of Common Stock into the market by the escrow agent or, if distributed the recipients of the settlement could cause a decline in the price of such stock. |
