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This excerpt taken from the XIDE DEF 14A filed Jul 27, 2006. Reasons
for Soliciting Shareholder Approval
Our common stock trades on the Nasdaq Global Market. Under
Nasdaq Marketplace Rules, we are required to obtain shareholder
approval of the Standby Agreement and the transactions
contemplated by such agreement, including the issuance of common
stock pursuant to the Standby Agreement. Nasdaq requires
shareholder approval in a transaction (other than a public
offering) involving the issuance or potential issuance of common
stock (or securities convertible into common stock) equal to 20%
or more of the common stock outstanding before the issuance for
less than the greater of book or market value and when our
issuance of
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common stock would result in a change of control. The
Subscription Price is less than the book value of the common
stock and depending on the number of shares purchased by
existing holders in the Rights Offering, we could issue a number
of shares of common stock pursuant to the Share Transaction that
is greater than 20% of the currently outstanding shares of
common stock. The Share Transaction could also result in a
change of control of our company as defined under Nasdaq’s
rules. Accordingly, we are seeking shareholder approval of the
Share Transaction.
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