SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
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FORM 8-A/A
(Amendment No. 3)
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
eLoyalty Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-4304577
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State of Incorporation or Organization) (IRS Employer Identification no.)
150 Field Drive, Suite 250,
Lake Forest, Illinois 60045
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of
pursuant to Section 12(b) of the securities pursuant to Section 12(g)
Exchange Act and is effective pursuant of the Exchange Act and is effective
to General Instruction A. (c), please pursuant to General Instruction
check the following box. [ ] A.(d), please check the following
box. [X]
Securities Act registration statement
file number to which this form relates 333-94293
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
None None
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Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value per share
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(Title of Class)
Preferred Stock Purchase Rights
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(Title of Class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
eLOYALTY CORPORATION ("eLoyalty," "us" or the "Registrant") hereby
amends Items 1 and 2 of its Registration Statement on Form 8-A, as originally
filed with the Securities and Exchange Commission ("SEC") on January 20, 2000
and as amended on March 24, 2000 and November 9, 2001, to read in their
entireties as follows:
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The following description of our common stock and Rights (as defined
below), does not purport to be complete and is qualified in its entirety by
reference to the eLoyalty certificate of incorporation and bylaws, in each case
as amended from time to time, and the Rights Agreement (as defined below),
copies of each of which are filed with the SEC and filed or incorporated by
reference as exhibits to this Registration Statement.
On December 19, 2001, eLoyalty effected a one-for-ten reverse split of
its then authorized and then issued common stock (the "Reverse Split"). After
giving effect to the Reverse Split and a related increase in eLoyalty's
authorized preferred stock, the authorized capital stock of eLoyalty consists of
50,000,000 shares of common stock, $0.01 par value, and 40,000,000 shares of
preferred stock, $0.01 par value.
COMMON STOCK
Holders of our common stock are entitled to one vote per share with
respect to each matter presented to stockholders for vote. Except as is provided
with respect to our 7% Series B convertible preferred stock, as may be provided
in connection with any eLoyalty preferred stock issued in the future, or as may
otherwise be required by law or the certificate of incorporation, the common
stock will be the only capital stock of eLoyalty entitled to vote in the
election of directors and on all other matters presented to the stockholders of
eLoyalty; provided that the holders of common stock, as such, will not be
entitled to vote on any matter that relates solely to the terms of any
outstanding series of preferred stock or the number of shares of such series and
does not affect the number of authorized shares of preferred stock or the
powers, privileges and rights pertaining to the common stock. eLoyalty's Series
B preferred stock, of which there were 4,562,240 shares outstanding as of
September 1, 2002, is convertible into shares of common stock on a one-for-one
basis (subject to adjustment in the future to give effect to certain actions) at
the option of the holder beginning June 19, 2002 and generally votes on an
as-converted basis with the company's common stock as a single class on all
matters submitted to a vote of stockholders (subject to applicable law and
specified matters as to which the Series B preferred stock is entitled to a
separate class vote). The common stock does not have cumulative voting rights,
which means that the holders of a majority of the outstanding shares of common
stock and Series B preferred stock (on an as-converted basis), voting as a
class, can elect all of the directors then standing for election.
Subject to the prior rights of holders of preferred stock, if any,
holders of common stock are entitled to receive such dividends as may be
lawfully declared from time to time by our board of directors. Upon any
liquidation, dissolution or winding up of eLoyalty, whether voluntary or
involuntary, holders of common stock will be entitled to receive the assets that
are legally available for distribution to stockholders after there shall have
been paid or set apart for payment the full amounts necessary to satisfy any
preferential or participating rights to which the holders of each outstanding
series of preferred stock are entitled by the express terms of such series. Our
outstanding Series B preferred stock accrues dividends at a rate of 7% of its
original issuance price ($5.10 per share) per annum, payable in preference to
dividends which may be paid to holders of common stock (subject to limited
exceptions). In addition, upon liquidation or winding up of eLoyalty, each
outstanding share of Series B preferred stock will entitle its holder to a
preferential payment generally equal to its original issuance price, subject to
adjustment in the future to give effect to certain actions, plus accrued and
unpaid dividends.
The common stock does not have any preemptive, subscription or
conversion rights. Additional shares of authorized common stock may be issued,
as determined by our board from time to time, without stockholder approval,
except as may be required by applicable Nasdaq requirements.
Our common stock is listed on the Nasdaq National Market under the
symbol "ELOY."
Mellon Investor Services LLC serves as the transfer agent and registrar
for our common stock.
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PREFERRED STOCK
Subject to Delaware law, our board may, without approval of the
stockholders, cause shares of preferred stock to be issued from time to time in
one or more series. The board will determine the number of shares of each series
as well as the designation, powers, privileges, preferences and rights of the
shares of that series. Among the specific matters that may be determined by the
board are:
-- the designation of each series;
-- the number of shares of each series;
-- the rate of dividends, if any;
-- whether dividends, if any, will be cumulative or
non-cumulative;
-- the terms of redemption, if any;
-- the terms of any sinking fund providing for the purchase or
redemption of shares of each series;
-- the amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
affairs of eLoyalty;
-- rights and terms of conversion or exchange, if any;
-- restrictions on the issuance of shares of the same series or
any other series, if any; and
-- voting rights, if any.
RIGHTS PLAN
Our board of directors adopted a Stockholder Rights Plan (the "Rights
Plan") on January 26, 2000. Pursuant to the Rights Plan, preferred stock
purchase rights (each, a "Right") are issued and attached to our outstanding
shares of common stock. Each Right entitles its holder, under the circumstances
described below, to purchase from eLoyalty one one-hundredth of a share of
Series A junior participating preferred stock, $0.01 par value (the "Series A
Preferred Stock"), at an exercise price per Right of $160 per Right, subject to
adjustment. The initial dividend effecting the distribution of the Rights was
payable on March 31, 2000 to the stockholders of record on that date. The
description and terms of the Rights are set forth in a Rights Agreement (as
amended, the "Rights Agreement") between eLoyalty and Mellon Investor Services
LLC, as Rights Agent. Pursuant to the terms of the Rights Agreement, after
giving effect to the Reverse Split each share of eLoyalty's outstanding common
stock has issued and attached to it ten Rights.
Initially, the Rights will be associated with the common stock and
evidenced by the common stock certificates, which will contain a notation
incorporating the Rights Agreement by reference. The Rights initially will be
transferred with and only with underlying shares of common stock. The Rights
will become exercisable and separately certificated only upon the "Distribution
Date," which will occur upon the earlier of:
-- ten days following a public announcement that a person or
group (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the
outstanding shares of common stock then outstanding
(including any shares of common stock issuable upon
conversion of our Series B preferred stock) (the date of the
announcement being the "Stock Acquisition Date"); or
-- ten business days (or later if determined by our board of
directors prior to any person becoming an Acquiring Person)
following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an
Acquiring Person.
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Until the Distribution Date, the surrender for transfer of any shares
of common stock outstanding will also constitute the transfer of the Rights
associated with such shares.
As soon as practicable after the Distribution Date, separate
certificates for the Rights will be mailed to holders of record of common stock
as of the close of business on the Distribution Date. From and after the
Distribution Date, the separate certificates alone will represent the Rights.
Except as otherwise provided in the Rights Agreement, only shares of common
stock issued prior to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date and will
expire ten years from their issuance unless earlier redeemed or exchanged by
eLoyalty as described below.
In the event (a "Flip-In Event") that a person or group becomes an
Acquiring Person, each holder of a Right (other than any Acquiring Person and
related parties, whose Rights will automatically become null and void) will have
the right to receive, upon exercise, common stock, or, in some circumstances,
cash, property or other securities of eLoyalty, with a value equal to two times
the exercise price of the Right. The Rights may not be exercised following a
Flip-In Event while we have the ability to cause the Rights to be redeemed. Our
ability to redeem the Rights is described below.
For example, at an exercise price of $100 per Right, each Right not
owned by an Acquiring Person (or by related parties) following a Flip-In Event
would entitle its holder to purchase $200 worth of common stock (or other
consideration, as noted above) for $100. Assuming that the common stock had a
per share value of $50 at that time, the holder of each valid Right would be
entitled to purchase four shares of common stock for $100.
In the event (a "Flip-Over Event") that, at any time following the
Stock Acquisition Date:
-- we are acquired in a merger or other business combination in
which eLoyalty is not the surviving entity,
-- we are acquired in a merger or other business combination in
which eLoyalty is the surviving entity and all or part of
our common stock is converted into or exchanged for
securities of another entity, cash or other property, or
-- 50% or more of our assets or earning power is sold or
transferred,
then each holder of a Right (except Rights which previously have been voided as
set forth above) will have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise price of
the Right. Flip-In Events and Flip-Over Events are collectively referred to as
"Triggering Events."
The exercise price payable, and the number of shares of Series A
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution:
-- in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Series A Preferred
Stock;
-- if holders of the Series A Preferred Stock are granted
specific rights, options or warrants to subscribe for Series
A Preferred Stock or convertible securities at less than the
current market price of the Series A Preferred Stock; or
-- upon the distribution to holders of the Series A Preferred
Stock of evidence of indebtedness or assets (excluding
regular periodic cash dividends) or of subscription rights
or warrants (other than those referred to above).
With some exceptions, no adjustment in the exercise price will be
required until cumulative adjustments amount to at least 1% of the then current
exercise price. No fractional shares of Series A Preferred Stock will be issued
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Series A Preferred Stock on the last trading day prior to the date
of exercise. We may require prior to the occurrence of a Triggering
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Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Series A Preferred Stock will be issued.
We may redeem the Rights in whole, but not in part, at a price of $0.01
per Right (subject to adjustment and payable in cash, common stock or other
consideration deemed appropriate by our board of directors) at any time until
ten days following the Stock Acquisition Date. Immediately upon the action of
our board of directors authorizing any redemption, the Rights will terminate and
the only right of the holders of Rights will be to receive the redemption price.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by that person or group of 50% or more of the
outstanding shares of common stock, eLoyalty may exchange the Rights (other than
Rights owned by that person or group which will have become void), in whole or
in part, at an exchange ratio of one share of common stock, or one one-hundredth
of a share of Series A Preferred Stock (or of a share of a class or series of
our preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
Until a Right is exercised, its holder, as such, will have no rights as
a stockholder of eLoyalty, including, without limitation, the right to vote or
to receive dividends. While the distribution of the Rights will not result in
the recognition of taxable income by our stockholders or us, stockholders may,
depending upon the circumstances, recognize taxable income after a Triggering
Event.
The terms of the Rights may be amended by our board of directors
without the consent of the holders of the Rights. The board of directors could,
among other things, lower the thresholds described above to the greater of 10%
or .001% more than the largest percentage of the outstanding shares of common
stock (including any shares of common stock issuable upon conversion of our
Series B preferred stock) then known to us to be beneficially owned by any
person or group of affiliated or associated persons. Once a person or group has
become an Acquiring Person no amendment can adversely affect the interests of
the holders of the Rights.
The Rights will have antitakeover effects. The Rights will cause
substantial dilution to any person or group who attempts to acquire a
significant interest in eLoyalty without advance approval from our board of
directors. As a result, the overall effect of the Rights may be to render more
difficult or discourage any attempt to acquire eLoyalty, even if the acquisition
would be in the interest of our stockholders. Because we can redeem the Rights,
the Rights will not interfere with a merger or other business combination
approved by our board of directors.
Effective September 24, 2001, we and the Rights Agent amended the
Rights Agreement (the "Amendment"). The Amendment was entered into in connection
with the Share Purchase Agreement, dated as of September 24, 2001 (the "Share
Purchase Agreement"), among us and several funds managed by Technology Crossover
Ventures and several funds managed by Sutter Hill Ventures (the "Investors").
Pursuant to the Share Purchase Agreement, on December 19, 2001 the Investors
purchased from us an aggregate of approximately $15.9 million of Series B
preferred stock in a private placement (the "Private Placement").
The Amendment provides, among other things, that (i) Technology
Crossover Ventures and certain related parties shall not become an "Acquiring
Person" for purposes of the Rights Agreement so long as Technology Crossover
Ventures and its related parties do not own more than 35% of eLoyalty's
outstanding common stock (determined after giving effect to the conversion of
the new Series B preferred stock), and (ii) Sutter Hill Ventures and certain
related parties shall not become an "Acquiring Person" for purposes of the
Rights Agreement so long as Sutter Hill Ventures and its related parties do not
own more than 20% of eLoyalty's outstanding common stock (determined after
giving effect to the conversion of the new Series B preferred stock).
CERTAIN ANTITAKEOVER EFFECTS
In addition to our Rights Plan, our amended certificate of
incorporation and bylaws and Delaware law contain provisions that could make the
acquisition of eLoyalty more difficult by means of a tender offer, proxy contest
or otherwise.
Classified Board of Directors. Our amended certificate of incorporation
provides that our board of directors be divided into three classes of directors,
with the classes to be as nearly equal in number as possible, and with each
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class serving a staggered three-year term (except for any directors to be
elected separately by the holders of any preferred stock voting by class or
series, to the extent provided by the terms of such preferred stock). The
classification of directors has the effect of making it more difficult for
stockholders to change the composition of the board of directors. At least two
annual meetings of stockholders, instead of one, will generally be required to
effect a change in a majority of our board. Such a delay may help ensure that
the directors, if confronted by a stockholder attempting to force a proxy
contest, a tender or exchange offer or an extraordinary corporate transaction,
would have sufficient time to review the proposal as well as any available
alternatives to the proposal and to act in what they believe to be the best
interest of eLoyalty. The classification provisions will apply to every election
of directors, however, regardless of whether a change in the composition of our
board would be beneficial to eLoyalty and our stockholders and whether a
majority of our stockholders believe that such a change would be desirable. The
classification provisions could also have the effect of discouraging a third
party from initiating a proxy contest, making a tender offer or otherwise
attempting to obtain control of eLoyalty, even though such an attempt might be
beneficial to us and our stockholders. Accordingly, the classification of our
board could increase the likelihood that incumbent directors will retain their
position.
Under Delaware law, unless otherwise provided in the certificate of
incorporation, directors serving on a classified board may only be removed by
the stockholders for cause. The amended certificate of incorporation and the
bylaws provide that our classified directors may be removed only for cause and
only upon the affirmative vote of holders of at least 80% of the voting power of
the then outstanding shares of our stock, voting together as a single class.
Other Charter and Bylaw Provisions. In addition to providing for a
classified board of directors, our amended certificate of incorporation and
bylaws contain certain other provisions that may have the effect of delaying,
deferring or discouraging another party from acquiring control of us:
o the approval of holders of at least 80% of the voting power
of our outstanding shares of stock, voting as a class, is
required to amend, among others, the provisions of our
certificate of incorporation relating to the general
prohibition on stockholder action without a meeting, the
number, election and term of directors, the removal of
directors, the issuance of rights and the adoption,
amendment or repeal of our bylaws by the board of directors
or by the affirmative vote of at least 80% of our
outstanding voting power;
o our board of directors is expressly authorized to make,
alter or repeal our bylaws and our bylaws may be amended by
the stockholders only by the affirmative vote of holders of
at least 80% of the voting power of our outstanding shares
of stock, voting as a class;
o stockholders may not call special meetings of the
stockholders or fill vacancies on the board and our
stockholders cannot act by written consent;
o our board of directors is authorized to issue preferred
stock without stockholder approval as described above under
"Preferred Stock"; and
o we have advance notice provisions that must be observed for
any stockholder to bring business or a nomination for
election as director before a meeting of stockholders.
Section 203 of Delaware General Corporation Law. We are subject to the
provisions of Section 203 of the Delaware General Corporation Law. Subject to
certain exceptions, Section 203 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 (1) the interested stockholder attained
such status with the approval of the board of directors, (2) the business
combination is approved by the corporation's board of directors prior to the
date the interested stockholder became an interested stockholder, or (3) the
interested stockholder acquired at least 85% of the voting stock of the
corporation (other than stock held by specified persons) in the transaction in
which it becomes an interested stockholder, or (4) the business combination is
approved by a majority of the board of directors and by the affirmative vote of
at least 66-2/3% of the outstanding voting stock that is not owned by the
interested stockholder voting at an annual or special meeting of stockholders.
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A "business combination" includes mergers, consolidations, certain
asset sales and certain other transactions that would increase the interested
stockholder's proportionate share ownership in the corporation. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock.
Corporations may opt out of, and therefore not be subject to, Section
203. eLoyalty has not, however, opted out of this provision.
ITEM 2. EXHIBITS.
List below all exhibits filed as a part of the registration statement:
3.1 eLoyalty's Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3.1 to eLoyalty's
Registration Statement on Form S-1 (File No. 333-94293), as
amended, as filed with the Securities and Exchange
Commission on February 8, 2000 (the "Form S-1")).
3.2 Certificate of Designation of Series A Junior Participating
Preferred Stock (see Exhibit 4.3 hereto).
3.3 Certificate of Amendment to eLoyalty's Certificate of
Incorporation, effective 7:59 a.m., eastern time, December
19, 2001 (incorporated by reference to Exhibit 3.3 to
eLoyalty's Annual Report on Form 10-K for the year ended
December 29, 2001, File No. 0-27975).
3.4 Certificate of Amendment to eLoyalty's Certificate of
Incorporation, effective 7:58 a.m., eastern time, December
19, 2001 (incorporated by reference to Exhibit 3.4 to
eLoyalty's Annual Report on Form 10-K for the year ended
December 29, 2001, File No. 0-27975).
3.5 Certificate of Increase of Series A Junior Participating
Preferred Stock of eLoyalty, filed December 19, 2001
(incorporated by reference to Exhibit 3.5 to eLoyalty's
Annual Report on Form 10-K for the year ended December 29,
2001, File No. 0-27975).
3.6 Certificate of Designation of 7% Series B Convertible
Preferred Stock of eLoyalty, filed December 19, 2001
(incorporated by reference to Exhibit 3.6 to eLoyalty's
Annual Report on Form 10-K for the year ended December 29,
2001, File No. 0-27975).
3.7 eLoyalty's Bylaws (incorporated by reference to Exhibit 3.2
to the Form S-1).
4.1 Rights Agreement dated March 17, 2000 between eLoyalty and
Mellon Investor Services LLC (formerly known as ChaseMellon
Shareholder Services, L.L.C.).*
4.2 Amendment, dated as of September 24, 2001, to the Rights
Agreement between eLoyalty and Mellon Investor Services LLC
(incorporated by reference to Exhibit 4.2 to the
Registrant's Form 8-K dated September 24, 2001, File No.
0-27975).
4.3 eLoyalty's Certificate of Designation of Series A Junior
Participating Preferred Stock.*
4.4 Certificate of Increase of Series A Junior Participating
Preferred Stock of eLoyalty, filed December 19, 2001 (see
Exhibit 3.5 hereto).
4.5 Certificate of Adjustment dated January 10, 2002
(incorporated by reference to Exhibit 4.3 to eLoyalty's
Annual Report on Form 10-K for the year ended December 29,
2001, File No. 0-27975).
* Filed previously.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
ELOYALTY CORPORATION
Dated: September 24, 2002 By: /s/ Timothy J. Cunningham
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Name: Timothy J. Cunningham
Title: Vice President and Chief
Financial Officer
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EXHIBIT INDEX
3.1 eLoyalty's Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to eLoyalty's Registration Statement on Form
S-1 (File No. 333-94293), as amended, as filed with the Securities and
Exchange Commission on February 8, 2000 (the "Form S-1")).
3.2 Certificate of Designation of Series A Junior Participating Preferred
Stock (see Exhibit 4.3 hereto).
3.3 Certificate of Amendment to eLoyalty's Certificate of Incorporation,
effective 7:59 a.m., eastern time, December 19, 2001 (incorporated by
reference to Exhibit 3.3 to eLoyalty's Annual Report on Form 10-K for
the year ended December 29, 2001, File No. 0-27975).
3.4 Certificate of Amendment to eLoyalty's Certificate of Incorporation,
effective 7:58 a.m., eastern time, December 19, 2001 (incorporated by
reference to Exhibit 3.4 to eLoyalty's Annual Report on Form 10-K for
the year ended December 29, 2001, File No. 0-27975).
3.5 Certificate of Increase of Series A Junior Participating Preferred
Stock of eLoyalty, filed December 19, 2001 (incorporated by reference
to Exhibit 3.5 to eLoyalty's Annual Report on Form 10-K for the year
ended December 29, 2001, File No. 0-27975).
3.6 Certificate of Designation of 7% Series B Convertible Preferred Stock
of eLoyalty, filed December 19, 2001 (incorporated by reference to
Exhibit 3.6 to eLoyalty's Annual Report on Form 10-K for the year
ended December 29, 2001, File No. 0-27975).
3.7 eLoyalty's Bylaws (incorporated by reference to Exhibit 3.2 to the
Form S-1).
4.1 Rights Agreement dated March 17, 2000 between eLoyalty and Mellon
Investor Services LLC (formerly known as ChaseMellon Shareholder
Services, L.L.C.).*
4.2 Amendment, dated as of September 24, 2001, to the Rights Agreement
between eLoyalty and Mellon Investor Services LLC (incorporated by
reference to Exhibit 4.2 to the Registrant's Form 8-K dated September
24, 2001, File No. 0-27975).
4.3 eLoyalty's Certificate of Designation of Series A Junior Participating
Preferred Stock.*
4.4 Certificate of Increase of Series A Junior Participating Preferred
Stock of eLoyalty, filed December 19, 2001 (see Exhibit 3.5 hereto).
4.5 Certificate of Adjustment dated January 10, 2002 (incorporated by
reference to Exhibit 4.3 to eLoyalty's Annual Report on Form 10-K for
the year ended December 29, 2001, File No. 0-27975).
* Filed previously.
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