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Share Name | Share Symbol | Market | Type |
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(MM) | NASDAQ:ESYS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 17.46 | 0 | 01:00:00 |
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a‑6(e)(2)) |
T | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
☐ | No fee required. |
(1) | Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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· | A proposal to approve the merger agreement. The affirmative vote of a majority of the shares of Elecsys common stock outstanding at the close of business on December 19, 2014 is required to approve the merger agreement. |
· | A proposal to approve, on a nonbinding, advisory basis, compensation that will or may be paid to the named executive officers of Elecsys in connection with the merger, as required by the rules adopted by the Securities and Exchange Commission (the “named executive officer merger-related compensation proposal”). |
· | A proposal to approve an adjournment of the special meeting, if necessary or appropriate, to solicit additional votes for the approval of the proposal to approve the merger agreement. |
· | Such other business as may properly come before the special meeting. |
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Sincerely,
Karl Gemperli
President & Chief Executive Officer
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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DATE & TIME
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January 22, 2015 at 10:00 a.m., local time
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PLACE
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846 N. Mart-Way Court, Olathe, Kansas 66061
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ITEMS OF BUSINESS
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1. To consider and vote on a proposal to approve the Agreement and Plan of Merger, dated as of November 4, 2014 (the “merger agreement”), among Elecsys Corporation (“Elecsys”), Lindsay Corporation (“Lindsay”) and Matterhorn Merger Sub, Inc. (“Merger Sub”), pursuant to which Merger Sub will merge with and into Elecsys with Elecsys surviving as an indirect wholly owned subsidiary of Lindsay (the “merger proposal”);
2. To consider and vote on a proposal to approve, on a nonbinding, advisory basis, compensation that will or may be paid to the named executive officers of Elecsys in connection with the merger, as required by the rules adopted by the Securities and Exchange Commission (the “named executive officer merger-related compensation proposal”);
3. To consider and vote on a proposal to approve an adjournment of the special meeting of stockholders of Elecsys (the “special meeting”), if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the merger proposal (the “adjournment proposal”); and
4. To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.
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RECORD DATE
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Only stockholders of record at the close of business on December 19, 2014 (the “record date”) are entitled to notice of, and to vote at, the special meeting and at any adjournment or postponement of the special meeting.
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VOTING BY PROXY
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The Elecsys board of directors (the “Elecsys Board”) is soliciting your proxy to assure that a quorum is present and that your shares are represented and voted at the special meeting. For information on submitting your proxy please see the attached proxy statement and enclosed proxy card. If you later decide to vote in person at the special meeting, information on revoking your proxy prior to the special meeting is also provided.
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RECOMMENDATIONS
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The Elecsys Board unanimously recommends that you vote “FOR” each of the merger proposal, the named executive officer merger-related compensation proposal and the adjournment proposal.
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By Order of the Board of Directors,
Todd A. Daniels
Secretary
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· | to approve the merger agreement (the “merger proposal”); |
· | to approve, on a nonbinding, advisory basis, compensation that will or may be paid to the named executive officers of Elecsys in connection with the merger, (the “named executive officer merger-related compensation proposal”); |
· | to approve the adjournment of the special meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the merger proposal (the “adjournment proposal”); and |
· | to transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting. |
· | “FOR” the merger proposal; |
· | “FOR” the named executive officer merger−related compensation proposal; and |
· | “FOR” the adjournment proposal. |
· | the accelerated vesting of all restricted shares held by Elecsys directors and the cancellation and cashing out of all stock options, whether vested or unvested, held by the executive officers; |
· | the payment of cash bonuses at the effective time to the executive officers equal to 100% of the payment that such executive would be entitled to receive assuming performance at the FY2015 Pre-Tax/Pre-Bonus income level set forth in the Elecsys FY2015 Executive Bonus Plan, prorated for the portion of fiscal 2015 ending on the last day of the month immediately preceding the effective time and reduced by any income or employment tax required to be withheld with respect to such payment; |
· | the entitlement of certain of the executive officers to receive guaranteed compensation from the surviving corporation, with his current salary, until the first anniversary of the closing of the merger, unless such officer terminates his employment with the surviving corporation for any reason or such officer’s employment is terminated by the surviving corporation prior to the first anniversary of the closing of the merger (i) for cause (as defined in the agreement entered into by each such officer) or (ii) by reason of his death or disability; and |
· | the provision of indemnification and insurance arrangements under the merger agreement and Elecsys’ articles of incorporation and bylaws. |
· | solicit, initiate, knowingly facilitate or knowingly encourage any inquiries or the making or submission of any proposal that constitutes, or could reasonably be expected to lead to, a competing acquisition proposal; |
· | participate or engage in any discussions or negotiations with, or furnish any non-public information to, any third person relating to a competing acquisition proposal; |
· | afford access to the properties, books or records of Elecsys or any of its subsidiaries to any person that has made, or to the knowledge of Elecsys, is considering making, any competing acquisition proposal; |
· | enter into any letter of intent or agreement in principle or any agreement or understanding providing for any competing acquisition proposal; or |
· | propose publicly or agree to any of the foregoing relating to a competing acquisition proposal. |
· | Elecsys may furnish information to the person making such competing acquisition proposal pursuant to an executed confidentiality agreement on terms no less restrictive to the person making the competing acquisition proposal than the terms of the confidentiality agreement entered into between Elecsys and Lindsay prior to the negotiation of the merger agreement; provided such information is concurrently furnished to Lindsay in the same form provided to such person; |
· | Elecsys may engage in discussions or negotiations with such person with respect to the competing acquisition proposal; and |
· | the Elecsys Board may withhold, withdraw or change its recommendation to Elecsys’ stockholders regarding the transaction with Lindsay following receipt of a superior proposal, subject to complying with certain notice and other specified conditions, including giving Lindsay the opportunity to propose changes to the merger agreement in response to such superior proposal. |
· | the merger agreement is approved by Elecsys’ stockholders at the special meeting; and |
· | no statute, rule, regulation, order, or decree and no injunction has been entered, enacted, promulgated or issued by any governmental entity or court which prohibits the consummation of the transactions contemplated by the merger agreement. |
· | Elecsys’ representations and warranties in the merger agreement must be true and correct, subject to certain materiality thresholds, as of the date of the merger agreement and the date of the closing of the merger; |
· | Elecsys shall have performed or complied in all material respects with each of its obligations under the merger agreement at or prior to the closing of the merger; |
· | Elecsys shall have delivered to Lindsay a certificate, dated the effective time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that the conditions to closing set forth in the two bullet points immediately above have been satisfied; and |
· | since the date of the merger agreement, no event, change, circumstance, occurrence, effect or state of facts has occurred and is continuing that would result in a material adverse effect on Elecsys. |
· | Lindsay’s and Merger Sub’s respective representations and warranties in the merger agreement must be true and correct, subject to certain materiality thresholds, as of the date of the merger agreement and the date of the closing of the merger; |
· | Lindsay shall have performed or complied in all material respects with each of its obligations under the merger agreement at or prior to the closing of the merger; and |
· | Lindsay shall have delivered to Elecsys a certificate, dated the effective time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that these conditions have been satisfied. |
· | if the merger has not occurred on or before February 28, 2015, so long as the terminating party has not willfully breached any representation or warranty in the merger agreement or taken any action or failed to take any action that caused or resulted in the failure to consummate the merger; |
· | if any governmental entity has issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the merger agreement or prohibiting Lindsay from acquiring, holding or exercising rights of ownership of the Elecsys common stock, and such order, decree, ruling or other action shall have become final and non-appealable; or |
· | if the special meeting (including any adjournment or postponement thereof) has concluded, the Elecsys stockholders have voted on the merger proposal, and approval of the merger proposal by the Elecsys stockholders has not been obtained. |
· | if, prior to obtaining the approval of the Elecsys stockholders, the Elecsys Board, subject to complying with the terms of the merger agreement, authorizes Elecsys to enter into a binding written agreement concerning a transaction that constitutes a superior proposal (provided that, if Lindsay has proposed revisions to the terms of the merger or the merger agreement within 3 business days after receiving notice from Elecsys of such proposal, Elecsys has negotiated in good faith Lindsay to amend the terms of the merger agreement so that the merger is at least as favorable as such proposal from a financial perspective); or |
· | if (i) Lindsay or Merger Sub shall have breached any of their representations, warranties, covenants or agreements set forth in the merger agreement or (ii) if any of Lindsay’s or Merger Sub’s representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of certain conditions to the obligations of Elecsys to consummate the merger; provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 20 days after written notice thereof shall have been received by Lindsay. |
· | if prior to obtaining the approval of the Elecsys stockholders, (i) the Elecsys Board shall have effected a change of recommendation in a manner adverse to Lindsay or shall have recommended or adopted another acquisition proposal, (ii) the Elecsys Board shall have failed to affirm its recommendation of the merger within 5 days of a reasonable request to do so by Lindsay, or (iii) Elecsys or the Elecsys Board shall have resolved, or publicly announced an intention to, take any of the foregoing actions; |
· | if (i) Elecsys shall have breached any of its representations, warranties, covenants or agreements set forth in the merger agreement or (ii) any of Elecsys’ representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of certain conditions to the obligations of Lindsay and Merger Sub to consummate the merger; provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 20 days after written notice thereof shall have been received by Elecsys; |
· | if prior to obtaining the approval of Elecsys stockholders, any of Messrs. Daniels, Gegen, Taylor, Morgan, Hughes or Gemperli breaches or rescinds the Support Agreement that he executed and delivered to Lindsay concurrently with the execution and delivery of the merger agreement; or |
· | the special meeting shall not have been called or held (subject to any adjournment or postponement thereof which is reasonably necessary to facilitate the consummation of the transactions contemplated by the merger agreement and which will not, in any event, exceed 20 days) within 10 days after written notice of the failure to hold the special meeting shall have been received by Elecsys from Lindsay, or Elecsys or the Elecsys Board shall have resolved not to, or publicly announced an intention not to, call or hold the special meeting. |
· | if the merger agreement is terminated by Elecsys because the Elecsys Board authorizes, prior to obtaining the approval of the Elecsys stockholders and subject to complying with the terms of the merger agreement, Elecsys entering into a binding written agreement concerning a transaction that constitutes a superior proposal; |
· | if the merger agreement is terminated by Lindsay prior to obtaining the approval of the Elecsys stockholders because (i) the Elecsys Board shall have effected a change of recommendation in a manner adverse to Lindsay or shall have recommended or adopted another acquisition proposal, (ii) the Elecsys Board shall have failed to affirm its recommendation of the merger within 5 days of a reasonable request to do so by Lindsay, or (iii) Elecsys or the Elecsys Board shall have resolved, or publicly announced an intention to, take any of the foregoing actions; |
· | if the merger agreement is terminated by Lindsay because (i) the special meeting shall not have been called or held (subject to any adjournment or postponement thereof which is reasonably necessary to facilitate the consummation of the transactions contemplated by the merger agreement and which will not, in any event, exceed 20 days) within 10 days after written notice of the failure to hold the special meeting shall have been received by Elecsys from Lindsay, or Elecsys or the Elecsys Board shall have resolved not to, or publicly announced an intention not to, call or hold the special meeting, and (ii) within 1 year of such termination of the merger agreement, Elecsys consummates a competing acquisition proposal; |
· | if a competing acquisition proposal shall have been made known to Elecsys or shall have been made directly to Elecsys’ stockholders or any third party shall have publicly announced an intention (whether or not conditional) to make a competing acquisition proposal, and thereafter (i) the merger agreement is terminated by Elecsys or Lindsay or Merger Sub because the effective time has not occurred on or before February 28, 2015, and (ii) such competing acquisition proposal (whether or not modified after it was first made) is consummated within 1 year of such termination of the merger agreement; or |
· | if the merger agreement is terminated by Lindsay because Elecsys breached its covenants restricting its ability to solicit competing acquisition proposals, as described in the section of this proxy statement titled “The Merger Agreement – Restrictions on Solicitation of Acquisition Proposals” beginning on page 56. |
Q. | Why am I receiving these proxy materials? |
A. | On November 4, 2014, Elecsys entered into the merger agreement providing for the merger of Merger Sub with and into Elecsys, pursuant to which Elecsys will survive the merger as an indirect wholly owned subsidiary of Lindsay. You are receiving this proxy statement in connection with the solicitation by the Elecsys Board of proxies of Elecsys stockholders in favor of the merger proposal and the other matters to be voted on at the special meeting. |
Q. | What is the proposed transaction? |
A. | If the merger proposal is approved by Elecsys stockholders and the other conditions to the consummation of the merger contained in the merger agreement are satisfied or waived, Merger Sub will merge with and into Elecsys. Elecsys will be the surviving corporation of the merger and will be privately held as an indirect wholly owned subsidiary of Lindsay. |
Q. | What will I receive in the merger? |
A. | Under the terms of the merger agreement, if the merger is completed, you will be entitled to receive $17.50 in cash, without interest and less any applicable withholding taxes, for each share of Elecsys common stock you own (unless you properly perfect your appraisal rights). For example, if you own 100 shares of Elecsys common stock, you will be entitled to receive $1,750 in cash in exchange for your shares, without interest and less any applicable withholding taxes. You will not be entitled to receive shares in the surviving corporation or in Lindsay. |
Q. | Where and when is the special meeting, and who may attend? |
A. | The special meeting will be held at Elecsys’ headquarters located at 846 N. Mart-Way Court, Olathe, Kansas 66061 on January 22, 2015 at 10:00 a.m. local time. Stockholders who are entitled to vote, as well as our invited guests, may attend the meeting. |
Q. | Who can vote at the special meeting? |
A. | All Elecsys stockholders of record as of the close of business on December 19, 2014, the record date for the special meeting, are entitled to receive notice of, attend and vote at the special meeting, or any adjournment or postponement thereof. Each share of Elecsys common stock is entitled to one vote on each of the matters that come before the meeting. At the close of business on the record date, there were 3,827,658 shares of Elecsys common stock issued and outstanding. |
Q. | What matters will be voted on at the special meeting? |
A. | At the special meeting, you will be asked to consider and vote on the following proposals: |
· | the merger proposal; |
· | the named executive officer merger‑related compensation proposal; |
· | the adjournment proposal; and |
· | the transaction of such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting. |
Q. |
How does the Elecsys Board recommend that I vote on the proposals?
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A. | Elecsys’ Board unanimously recommends that you vote: |
· | “FOR” the merger proposal; |
· | “FOR” the named executive officer merger‑related compensation proposal; and |
· | “FOR” the adjournment proposal. |
Q. | What vote is required to approve the merger proposal? |
A. | The merger proposal will be approved if stockholders holding at least a majority of the shares of Elecsys common stock outstanding and entitled to vote at the close of business on the record date vote “FOR” the proposal. |
Q. | What vote is required to approve the other proposals? |
A. | The named executive officer merger‑related compensation proposal and the adjournment proposal will each be approved if a majority of the shares of Elecsys common stock present in person or represented by proxy at the special meeting and entitled to vote thereon vote “FOR” each such proposal. |
Q. | Do you expect the merger to be taxable to Elecsys stockholders? |
A. | The exchange of Elecsys common stock for cash in the merger will be a taxable transaction for U. S. federal income tax purposes and may also be taxable under state, local or other tax laws. You should read the section of this proxy statement titled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 67, and you are encouraged to consult your own tax advisors regarding the U. S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. |
Q. | What other effects will the merger have on Elecsys? |
A. | If the merger is completed, Elecsys common stock will be delisted from NASDAQ and deregistered under the Exchange Act, and Elecsys will no longer be required to file periodic reports with the Securities and Exchange Commission (the “SEC”) with respect to Elecsys common stock, in each case in accordance with applicable law. Following the completion of the merger, Elecsys common stock will no longer be publicly traded and you will no longer have any interest in Elecsys’ future earnings or growth; each share of Elecsys common stock you hold will represent only the right to receive $17.50 in cash, without interest and less any applicable withholding taxes (unless you properly perfect your appraisal rights). |
Q. | When is the merger expected to be completed? |
A. | The parties to the merger agreement expect to complete the merger during the first quarter of calendar year 2015, subject to receipt of stockholder approval of the merger proposal. However, Elecsys cannot predict the actual date on which the merger will be completed, if at all, because completion is subject to conditions beyond Elecsys’ control. See the section of this proxy statement titled “The Merger Agreement — Conditions to the Closing of the Merger” beginning on page 59. |
Q. | What happens if the merger is not completed? |
A. | If the merger proposal is not approved by Elecsys stockholders, or if the merger is not completed for any other reason, Elecsys stockholders will not receive any payment for their shares of Elecsys common stock in connection with the merger. Instead, Elecsys will remain an independent public company and shares of Elecsys common stock will continue to be listed and traded on NASDAQ. If the merger agreement is terminated under certain specified circumstances described in the section of this proxy statement titled The Merger Agreement — Termination Fees and Expenses” beginning on page 61, Elecsys will be required to pay Lindsay a termination fee of $2,680,000. In the event that the termination fee is due and payable to Lindsay, Elecsys will also be required to pay Lindsay’s documented out-of-pocket expenses in connection with the merger agreement and the merger, in an amount not to exceed $400,000. |
Q. | Why am I being asked to consider and vote on the named executive officer merger−related compensation proposal? |
A. | SEC rules require Elecsys to seek approval on a nonbinding, advisory basis with respect to payments that will or may be made to Elecsys’ named executive officers in connection with the merger. Stockholder approval of the named executive officer merger‑related compensation proposal is not required in order to complete the merger or payments to Elecsys’ named executive officers in connection with the merger. |
Q. | Who is soliciting my vote and who will bear the costs and expenses of proxy solicitation? |
A. | The Elecsys Board is soliciting your proxy, and Elecsys will bear all costs and expenses of proxy solicitation. In addition to solicitations by mail, employees and directors of Elecsys may solicit proxies in person or by telephone. Elecsys does not expect to pay any compensation for the solicitation of proxies. |
Q. | What do I need to do now? |
A. | Carefully read and consider the information contained in and incorporated by reference into this proxy statement, including the attached annexes. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting. |
Q. | How do I vote if my shares are registered directly in my name? |
A. | If your shares are registered directly in your name with our transfer agent, you are considered a “stockholder of record” and you may vote your shares at the special meeting by: |
· | Internet: To vote over the internet, go to www.investorvote.com/ESYS and follow the steps outlined on the secure website. Please have your proxy card available for reference because you will need the validation details that are located on your proxy card in order to cast your vote over the internet. If you vote over the internet, you do not have to mail in a proxy card. |
· | Telephone: To vote by telephone, call toll-free 1-800-652-VOTE (8683) within the United States any time prior to 11:59 p.m. Central Time, on January 21, 2015 on a touchtone phone. Please have your proxy card available for reference because you will need the validation details that are located on your proxy card in order to cast your vote by telephone. If you vote by telephone, you do not have to mail in a proxy card. |
· | Mail: To vote by mail, complete, sign and date a proxy card and return it promptly to the address indicated on the proxy card. If you return your signed proxy card to us before the special meeting and do not subsequently revoke your proxy, we will vote your shares as you direct. |
· | In Person: You may attend the special meeting and vote your shares in person, rather than voting your shares by mail. You will be given a ballot when you arrive. |
Q. | How do I vote if my shares are held in the name of my broker, bank or other nominee? |
A. | If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. Your bank, brokerage firm or other nominee will be unable to vote your shares of Elecsys common stock held in “street name” without instructions from you. You should instruct your bank, brokerage firm or other nominee to vote your shares of Elecsys common stock in accordance with the procedures provided by your bank, brokerage firm or other nominee. The failure to vote on the proposal to approve the merger agreement will have the same effect as a vote “AGAINST” this proposal. If you are a beneficial owner and you wish to vote in person at the special meeting, you must bring to the special meeting a legal proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. |
Q. | Can I change or revoke my proxy after it has been submitted? |
A. | Yes. You can change or revoke your proxy at any time before the final vote at the special meeting. If you are the record holder of your shares, you may change or revoke your proxy by: |
· | voting again over the internet or by telephone prior to 11:59 p.m., Central Time, on January 21, 2015; |
· | timely sending a written notice that you are revoking your proxy to Todd A. Daniels, Secretary of Elecsys; |
· | timely delivering a valid, later−dated proxy; or |
· | attending the special meeting and notifying the election officials that you wish to revoke your proxy to vote in person. Simply attending the special meeting will not, by itself, revoke your proxy. |
Q. | How many shares of Elecsys common stock must be present to constitute a quorum for the meeting? |
A. | The presence at the special meeting, in person or by proxy, of a majority of the shares of Elecsys common stock outstanding on the record date will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. However, even if a quorum does not exist, a majority of the shares of Elecsys common stock present or represented by proxy at the special meeting and entitled to vote may adjourn the special meeting to another place, date or time. Failure of a quorum to be present at the special meeting will necessitate an adjournment or postponement of the special meeting and will subject Elecsys to additional expense. As of the record date, there were 3,827,658 shares of Elecsys common stock outstanding. Accordingly, 1,913,830 shares of Elecsys common stock must be present or represented by proxy at the special meeting to constitute a quorum. |
Q. | What if I abstain from voting on any proposal? |
A. | If you attend the special meeting or submit a proxy card, but abstain from voting on any proposal, your shares will still be counted for purposes of determining whether a quorum exists, but will not be voted on any proposal. As a result, your abstention from voting will have the same effect as a vote “AGAINST” the merger proposal, but will have no effect on the outcome of the named executive officer merger‑related compensation proposal and the adjournment proposal. Note that if no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted “FOR” (i) approval of the merger proposal, (ii) approval of the named executive officer merger‑related compensation proposal and (iii) approval of the adjournment proposal |
Q. | Will my shares be voted if I do not sign and return my proxy card or vote by telephone or over the internet or in person at the special meeting? |
A. | If you are a stockholder of record and you do not sign and return your proxy card or vote by telephone or over the internet or in person, your shares will not be voted at the special meeting and will not be counted for purposes of determining whether a quorum exists. The failure to return your proxy card or otherwise vote your shares at the special meeting will have no effect on the outcome of the named executive officer merger‑related compensation proposal or the adjournment proposal. However, the vote to approve the merger proposal is based on the total number of shares of Elecsys common stock outstanding on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to return your proxy card or otherwise vote your shares at the special meeting, it will have the same effect as a vote “AGAINST” the merger proposal. If your shares of Elecsys common stock are not voted at the special meeting or otherwise, but the merger proposal is approved by the requisite vote of the stockholders and the merger is completed, you will have the right to receive the merger consideration of $17.50 per share of Elecsys common stock that you hold. |
Q. | What is a broker non-vote? |
A. | Broker non‑votes are shares held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or nominee does not have discretionary voting power on such proposal. Because, under applicable rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of Elecsys common stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present in person or by proxy at the special meeting. As a result, it is expected that there will not be any broker non‑votes in connection with any of the three proposals described in this proxy statement. The failure to issue voting instructions to your broker, bank or other nominee will have no effect on the outcome of the named executive officer merger‑related compensation proposal or the adjournment proposal. However, the vote to approve the merger proposal is based on the total number of shares of Elecsys common stock outstanding on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote “AGAINST” the merger proposal. |
Q. | Will my shares held in “street name” or another form of record ownership be combined for voting purposes with shares I hold of record? |
A. | No. For voting purposes, any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, and as a result, any shares held in “street name” will not be combined for voting purposes with shares that you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for the shares held in each such form, because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an individual retirement account must be voted under the rules governing such account. |
Q. | Am I entitled to exercise appraisal rights instead of receiving the merger consideration for my shares of Elecsys common stock? |
A. | Yes, provided that you properly perfect your appraisal rights in accordance with Section 17-6712 of the KGCC. If the merger is consummated, stockholders who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares in accordance with Section 17-6712 of the KGCC will be entitled to appraisal rights in connection with the merger. This means that such stockholders are entitled to have their shares appraised by a Kansas court and to receive payment in cash of the “fair value” of their shares of Elecsys common stock, as determined by such court, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid on such amount determined to be fair value, if any. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights. |
Q. | What happens if I sell my shares of Elecsys common stock before the completion of the merger? |
A. | If you transfer your shares of Elecsys common stock, you will have transferred your right to receive the merger consideration in connection with the merger. In order to receive the merger consideration, you must hold your shares of Elecsys common stock through the completion of the merger. |
Q. | Should I send in my stock certificates or other evidence of ownership now? |
A. | No. After the merger is completed, you will receive a letter of transmittal from the paying agent for the merger with detailed written instructions for exchanging your shares of Elecsys common stock for the merger consideration to be paid in connection with the merger. If you are the beneficial owner of shares of Elecsys common stock held in “street name,” you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of such shares. Please do not send in your stock certificates now. |
Q: | When will I receive the cash consideration for my shares? |
A: | After the merger is completed, when you properly complete and return the letter of transmittal and required documentation described in the written instructions referenced above, you will receive from the paying agent a payment of the merger consideration for your shares. |
Q. | What does it mean if I get more than one proxy card or voting instruction card? |
A. | If your shares are registered differently or are held in more than one account, you will receive more than one proxy card or voting instruction card. |
Q. | What is householding and how does it affect me? |
A. | The SEC permits companies to send a single set of proxy materials to any household at which two or more stockholders reside, unless contrary instructions have been received, but only if the company provides advance notice and follows certain procedures. In such cases, each stockholder continues to receive a separate notice of meeting and proxy card. Elecsys has not implemented these householding rules with respect to its record holders; however, certain brokerage firms may have instituted householding for beneficial owners of Elecsys common stock held through brokerage firms. If your family has multiple accounts holding Elecsys common stock, you may have already received a householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this proxy statement. The broker will arrange for delivery of a separate copy of this proxy statement promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies of proxy materials. |
Q. | When will Elecsys announce the voting results of the special meeting, and where can I find the voting results? |
A. | Elecsys intends to announce the preliminary voting results at the special meeting, and will report the final voting results of the special meeting in a Current Report on Form 8−K filed with the SEC. All reports that Elecsys files with the SEC are publicly available when they are filed. |
Q: | Who can help answer my other questions? |
A: | If you have questions about the merger, require assistance in submitting your proxy or voting your shares, or need additional copies of this proxy statement or the enclosed proxy card, please contact Todd A. Daniels, Secretary of Elecsys, at 913-647-0158. |
· | the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; |
· | the failure to receive, on a timely basis or otherwise, approval of the merger proposal by our stockholders; |
· | the failure of one or more conditions to the closing of the merger agreement to be satisfied; |
· | the amount of the costs, fees, expenses and charges related to the merger agreement or merger; |
· | risks arising from the merger’s diversion of management’s attention from our ongoing business operations; |
· | risks that our stock price may decline significantly if the merger is not completed; |
· | the ability to retain and hire key personnel and maintain relationships with customers, suppliers and other business partners pending the completion of the merger; |
· | changes in federal, state or local laws or regulations; |
· | cost and stability of energy sources; |
· | management’s ability to predict accurately the adequacy of our present liquidity to meet future financial requirements; |
· | changes in labor and employee benefit costs, such as increased health care and other insurance costs; |
· | our ability to recruit, train and retain effective employees and management; |
· | the extent and speed of successful execution of strategic initiatives; |
· |
our ability to pass along product cost increases through increased sales prices;
|
· | the outcomes of any legal proceedings arising in the normal course of our business or in connection with the merger; and |
· | other risks and uncertainties set forth in our filings with the SEC, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our annual reports on Form 10−K and quarterly reports on Form 10−Q, current reports on Form 8−K and other SEC filings. |
· | the merger proposal, which is further described in the sections titled “The Merger Proposal (Proposal 1)” and “The Merger Agreement,” beginning on pages 27 and 50, respectively; |
· | the named executive officer merger‑related compensation proposal, discussed under the section of this proxy statement titled “The Merger Proposal (Proposal 1) — Interests of Elecsys Directors and Executive Officers in the Merger” beginning on page 43; |
· | the adjournment proposal; and |
· | the transaction of such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting. |
· | To Vote in Person: If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the special meeting. |
· | To Vote Over the Internet: To vote over the internet, go to www.investorvote.com/ESYS and follow the steps outlined on the secure website. Please have your proxy card available for reference because you will need the validation details that are located on your proxy card in order to cast your vote. If you vote over the internet, you do not have to mail in a proxy card. |
· | To Vote by Telephone: To vote by telephone, call toll-free 1-800-652 VOTE (8683) within the United States any time prior to 11:59 p.m. Central Time, on January 21, 2015 on a touchtone phone. Please have your proxy card available for reference because you will need the validation details that are located on your proxy card in order to cast your vote. If you vote by telephone, you do not have to mail in a proxy card. |
· | To Vote by Mail: To vote by mail, complete, sign and date the proxy card and return it promptly to the address indicated on the proxy card. If you sign and return your proxy card without indicating how you want your shares of Elecsys common stock to be voted with regard to a particular proposal, your shares of Elecsys common stock will be voted in favor of such proposal. If you return your proxy card without a signature, your shares will not be counted as present at the special meeting and cannot be voted. |
· | voting again over the internet or by telephone prior to 11:59 p.m., Central Time, on January 21, 2015; |
· | timely sending a written notice that you are revoking your proxy to Todd A. Daniels, Secretary of Elecsys; |
· | timely delivering a valid, later‑dated proxy; or |
· | attending the special meeting and notifying the election officials that you wish to revoke your proxy to vote in person. Simply attending the special meeting will not, by itself, revoke your proxy. |
· |
Premium to the trading price of Elecsys common stock. The Elecsys Board considered the fact that the $17.50 per share in cash to be paid as merger consideration represents a premium of approximately 82.9% to the closing price of $9.57 on November 4, 2014, the day the merger was announced.
|
|
· | Merger consideration. The Elecsys Board considered the $17.50 per share in cash to be paid as merger consideration in relation to the historic trading ranges of Elecsys common stock and the possibility that it could take a significant period of time before the trading price of Elecsys common stock would trade at a level in excess of the per share merger consideration of $17.50 on a present value basis. |
· | Negotiations with Lindsay. The Elecsys Board considered the benefits that we and our advisors were able to obtain during our negotiations with Lindsay, including a $2.00 increase in Lindsay’s offer price per share from the beginning of the process to the end of the negotiations. The Elecsys Board concluded that we had obtained the highest price per share that Lindsay was willing to agree to pay, considering the negotiations between the parties. |
· | Cash consideration. The Elecsys Board considered the fact that the merger consideration would be paid solely in cash, which, compared to noncash consideration, provides certainty and immediate liquidity and value to our stockholders. |
· | Fairness opinion. The Elecsys Board considered the financial analyses presented by CCCA, as well as the oral opinion of CCCA to the effect that, as of such date and based upon and subject to the factors, procedures, assumptions, qualifications and limitations explained to the Elecsys Board, the $17.50 cash per share merger consideration to be paid to holders of Elecsys common stock pursuant to the proposed merger agreement was fair, from a financial point of view, to such stockholders. The CCCA opinion is more fully described in the subsection titled “ — Opinion of CC Capital Advisors” beginning on page 35 and the full text of the opinion is attached to this proxy statement as Annex B. |
· | Elecsys’ current condition. The Elecsys Board considered information with respect to our financial condition, results of operations, business, competitive position and business strategy, on both an historical and prospective basis, as well as current industry, economic and market conditions and trends. |
· | Elecsys’ future prospects. The Elecsys Board considered Elecsys’ future prospects if we were to remain independent, including the increasingly competitive landscape and various business, financial and execution risks, our relationships with customers and suppliers and the risks associated with continued independence discussed below. |
· | Equity Research Analysis. The Elecsys Board considered the most recent research report issued by Sidoti & Company, LLC relative to the merger consideration of $17.50. The research report indicated a price target of $19.00 per share for Elecsys common stock based on a premium P/E ratio of 20 times earnings on projected financial results for the Elecsys 2016 fiscal year. The Elecsys Board considered that those financial projections were purely mathematical estimates and were not based on any forward-looking information from Elecsys’ management. The Elecsys Board concluded that merger consideration in cash at a P/E ratio of 28.6 times current earnings enabled stockholders to realize a substantial portion of Elecsys’ potential future value while mitigating both market and execution risks. |
· | Risks associated with continued independence. The Elecsys Board considered the risks associated with going forward as an independent company, including the potential market and execution risks associated with Elecsys’ business including competing with significantly larger competitors that, as a result of scale, have better purchasing power, and an enhanced ability to lower expenses and leverage technology costs. The Elecsys Board also considered the risk that, if we did not enter into the merger agreement with Lindsay, the price that might be received by Elecsys’ stockholders selling shares in the open market, both in the short term and the long term, could be less than the merger consideration. The Elecsys Board concluded that the merger consideration enabled stockholders to realize a substantial portion of Elecsys’ potential future value without the market or execution risks associated with continued independence. |
· | Economic conditions. The Elecsys Board considered the current state of the economy and general uncertainty surrounding forecasted economic conditions both in the near term and the long term, generally and within our industry. |
· | Arms−length negotiations. The Elecsys Board considered that the merger agreement was the product of arms−length negotiations and contained customary terms and conditions. |
· | Merger agreement. The Elecsys Board considered the terms of the merger agreement, including: |
· | the representations, warranties and covenants of the parties, the conditions to the parties’ obligations to complete the merger and their ability to terminate the merger agreement; |
· | the absence of a financing condition in the merger agreement; |
· | the right of Elecsys and the Elecsys Board to respond to a competing proposal from another bidder, subject to certain restrictions and the requirement that we pay Lindsay the applicable termination fee and expenses if we terminate the merger agreement to accept a superior proposal; |
· | the belief of the Elecsys Board that, although the termination fee provisions might have the effect of discouraging competing third−party proposals or reducing the price of such proposals, such provisions are customary for transactions of this size and type, and its belief that the $2,680,000 termination fee and up to $400,000 in expenses, representing approximately 4.4% of the equity value of the transaction, was reasonable in the context of comparable transactions, particularly given the thorough process described above; |
· | the Elecsys Board’s right to change its recommendation, subject to certain restrictions, in response to a superior proposal; and |
· | the fact that the end date under the merger agreement allows for sufficient time to consummate the transaction. |
· | Lindsay’s reputation. The Elecsys Board considered the business reputation and capabilities of Lindsay and its management. |
· | Lindsay’s resources. The Elecsys Board concluded that Lindsay had the resources needed to complete the merger. |
· | Likelihood of consummation. The Elecsys Board considered the likelihood that the merger would be completed, in light of, among other things, the conditions to the merger and the absence of a financing condition, Lindsay’s representation that it will have sufficient financial resources to pay the merger consideration and consummate the merger, and the remedies available to us under the merger agreement in the event of various breaches by Lindsay. |
· | Possibility of more favorable bid. The Elecsys Board considered the possibility that a third party with the financial means could submit an unsolicited offer that could result in a superior proposal which would permit Elecsys to terminate the merger agreement and accept, if Lindsay were unwilling to match such proposal, as more fully described in “ — Background of the Merger” beginning on page 28. |
· | Stockholders’ ability to reject the merger. The Elecsys Board considered the fact that the merger is subject to approval by Elecsys’ stockholders, who would be free to reject the merger. |
· | Participation in future gains. The Elecsys Board considered the fact that we will no longer exist as an independent public company and Elecsys’ stockholders will forgo any future increase in Elecsys’ value that might result from our earnings or possible growth as an independent company. The Elecsys Board concluded that the premium reflected in the merger consideration constituted fair compensation for the loss of the potential stockholder benefits that could be realized by our strategic plan and related sensitivity analyses on a risk−adjusted basis. |
|
· | Risks associated with announcement and pendency of the merger. The Elecsys Board considered the risk that the announcement and pendency of the merger may cause substantial harm to relationships with our employees, vendors, customers and partners and may divert management and employee attention away from the day−to−day operation of our business. |
· | Risks associated with a failure to consummate the merger. The Elecsys Board considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the merger will be satisfied and, as a result, the possibility that the merger might not be completed. The Elecsys Board noted that, if the merger were not completed, (i) we will have incurred significant risk and transaction and opportunity costs, including the possibility of disruption to our operations, diversion of management and employee attention, employee attrition and a potentially negative effect on our business and customer relationships, (ii) depending on the circumstances that caused the merger not to be completed, it is likely that the price of Elecsys’ common stock will decline significantly and (iii) the market’s perception of our prospects could be adversely affected. |
· | Restrictions on the operation of our business. The Elecsys Board considered the restrictions on the conduct of our business prior to the completion of the merger, which could delay or prevent us from realizing certain business opportunities or taking certain actions with respect to our operations we would otherwise have taken absent the pending merger. |
· | Nonsolicitation provision. The Elecsys Board considered the fact that the merger agreement precludes us from actively soliciting alternative proposals. |
· | Termination fees. The Elecsys Board considered the possibility that the termination fee and expenses payable to Lindsay if the merger agreement is terminated under certain circumstances might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals. |
· | Tax treatment. The Elecsys Board considered the fact that an all cash transaction would be taxable to Elecsys stockholders that are U.S. holders for U.S. federal income tax purposes. |
· | Interests of officers and directors. The Elecsys Board considered the fact that our executive officers and directors may have interests in the transaction that are different from, or in addition to, those of our stockholders. These interests are more fully described in the subsection titled “ — Interests of Elecsys Directors and Executive Officers in the Merger” beginning on page 43. |
· | Risk factors. The Elecsys Board considered other risks and uncertainties as described above under “Cautionary Statement Regarding Forward−Looking Statements.” |
1.
|
Held discussions with Elecsys’ management and legal counsel;
|
2. | Reviewed drafts and the final executed copy of the merger agreement and other relevant documents pertaining to the transaction; |
3. | Reviewed certain public and non-public Elecsys financial and operating information for prior years and current interim periods; |
4. | Reviewed certain internal financial and operating information, including financial forecasts, analyses and projections prepared by Elecsys and provided to CCCA for its analysis; |
5. | Reviewed the financial valuation in recent similar transactions in the M2M and EMS industries; |
6. | Reviewed the financial valuation relative to similar companies in the public market place; |
7.
|
Analyzed premiums paid in relevant recent publicly disclosed transactions;
|
8. | Reviewed the prospects of Elecsys as a stand-alone entity, including industry considerations and the discounted cash flow of its projected financial results; |
9.
|
Reviewed other relevant information that CCCA deemed necessary to assess the transaction.
|
M2M Peers:
|
Acorn Energy, Inc.
|
CalAmp Corp.
|
Digi International Inc.
|
EnerNOC, Inc.
|
PCTEL, Inc.
|
Sierra Wireless Inc.
|
USA Technologies Inc.
|
|
EV/Revenue
|
EV/EBITDA
|
P/E
|
|
||||||
Median LTM Multiples
|
.8x
|
12.1x
|
16.7x
|
|
||||||
Implied Merger Multiples
|
2.3x
|
15.3x
|
28.6x
|
|
EMS Peers:
|
Benchmark Electronics Inc.
Celestica Inc.
Flextronics International Ltd.
Jabil Circuit Inc.
Plexus Corp.
Sanmina Corporation
|
EV/Revenue
|
EV/EBITDA
|
P/E
|
|
|||||||
Median LTM Multiples
|
.3x
|
6.3x
|
13.0x
|
|
||||||
Implied Merger Multiples
|
2.3x
|
15.3x
|
28.6x
|
|
Blended Peer Group Analysis Implied Price per Share
|
||||||||
Low
|
High
|
|||||||
EV/Revenue (LTM)
|
$
|
3.50
|
$
|
5.62
|
||||
EV/EBITDA (LTM)
|
$
|
8.09
|
$
|
13.27
|
||||
P/E (LTM)
|
$
|
7.07
|
$
|
11.53
|
Announced
Date
|
Target
|
Acquiror
|
|
6/10/2014
|
ViryaNet Ltd
|
Verisae, Inc.
|
|
11/11/2013
|
Aastra Technologies Ltd.
|
Mitel Networks Corporation
|
|
11/4/2013
|
Anaren, Inc.
|
Veritas Capital
|
|
9/12/2013
|
Enterasys Networks, Inc.
|
Extreme Networks Inc.
|
|
4/29/2013
|
Telular Corporation
|
Avista Capital Holdings, L.P.
|
|
5/14/2012
|
Tii Network Technologies, Inc.
|
Kelta, Inc.
|
|
6/13/2011
|
EMS Technologies, Inc.
|
Honeywell International Inc.
|
|
1/17/2011
|
Intellicom Innovation AB
|
HMS Networks AB
|
EV/Revenue
|
EV/EBITDA
|
P/E
|
|
|||||||
Median Multiples
|
1.2x
|
12.8x
|
23.9x
|
|
||||||
Implied Merger Multiples
|
2.3x
|
15.3x
|
28.6x
|
|
Date
Announced
|
Target
|
Acquiror
|
|
9/22/2014
|
Viasystems Group, Inc.
|
TTM Technologies Inc.
|
|
7/17/2014
|
Ayrshire Electronics
|
Key Tronic Corp.
|
|
6/18/2014
|
Measurement Specialties Inc.
|
TE Connectivity Ltd.
|
|
3/20/2014
|
AVID Technologies, Inc.
|
Premier Farnell plc
|
|
12/12/2013
|
Beckwood Services, Inc.
|
Sparton Corp.
|
|
10/3/2013
|
CTS Electronics Manufacturing Solutions, Inc.
|
Benchmark Electronics Inc.
|
|
9/9/2013
|
Molex Incorporated
|
Koch Industries, Inc.
|
|
12/21/2012
|
Lightworks Optics, Inc.
|
LightWorks Optical Systems Inc.
|
|
11/6/2012
|
Onyx EMS, LLC
|
Sparton Corp.
|
|
4/4/2012
|
DDI Corp.
|
Viasystems Group, Inc.
|
|
11/10/2011
|
Pinnacle Data Systems Inc.
|
Avnet Integrated Resources
|
|
9/1/2011
|
ZF Array Technology, Inc.
|
SMTC Corporation
|
|
4/8/2011
|
ComSource, Inc.
|
Globecomm Systems Inc.
|
|
4/4/2011
|
LaBarge, Inc.
|
Ducommun LaBarge Technologies, Inc.
|
EV/Revenue
|
EV/EBITDA
|
P/E
|
|
|||||||
Median Multiples
|
1.1x
|
10.3x
|
17.1x
|
|
||||||
Implied Merger Multiples
|
2.3x
|
15.3x
|
28.6x
|
|
Low
|
High
|
|||||||
EV/Revenue (LTM)
|
$
|
6.73
|
$
|
11.00
|
||||
EV/EBITDA (LTM)
|
$
|
10.06
|
$
|
16.54
|
||||
P/E (LTM)
|
$
|
9.61
|
$
|
15.77
|
Low
|
High
|
|||||
$
|
9.38
|
$
|
15.70
|
• | the merger premium to be paid to Elecsys stockholders based on shares traded one day prior to public announcement of the merger is 69% as compared to an average of 33% for the selected public companies; |
• | the merger premium to be paid to Elecsys stockholders based on shares traded one week prior to public announcement of merger is 60% as compared to an average of 34% for the selected public companies; |
• | the merger premium to be paid to Elecsys stockholders based on shares traded one month prior to public announcement of merger is 63% as compared to an average of 29% for the selected public companies; |
• | the merger premium to be paid to Elecsys stockholders based on shares traded one year prior to public announcement of merger is 118% as compared to an average of 26% for the selected public companies. |
Low
|
High
|
|||||||
Peer Group Analysis
|
||||||||
EV/Revenue (LTM)
|
$
|
3.50
|
$
|
5.62
|
||||
EV/EBITDA (LTM)
|
$
|
8.09
|
$
|
13.27
|
||||
P/E (LTM)
|
$
|
8.38
|
$
|
13.72
|
||||
Precedent Transactions Analysis
|
||||||||
EV/Revenue (LTM)
|
$
|
6.73
|
$
|
11.00
|
||||
EV/EBITDA (LTM)
|
$
|
10.06
|
$
|
16.54
|
||||
P/E (LTM)
|
$
|
9.61
|
$
|
15.77
|
||||
Discounted Cash Flow Analysis
|
$
|
9.38
|
$
|
15.70
|
($ millions)
|
Projected Fiscal Year
|
|||||||||||||||||||
2015P
|
|
2016P
|
|
2017P
|
|
2018P
|
|
2019P
|
|
|||||||||||
Revenue
|
$
|
33,204
|
$
|
36,093
|
$
|
39,490
|
$
|
43,481
|
$
|
48,167
|
||||||||||
Gross Profit
|
13,081
|
14,393
|
15,881
|
17,633
|
19,527
|
|||||||||||||||
EBITDA
|
5,206
|
5,924
|
6,549
|
7,332
|
8,238
|
· | M2M annual revenue growth of 17%; |
· | EMS annual revenue growth of 2.5%; |
· | Increased sales, general and administrative (SG&A) expenses such that SG&A expenses, including research and development costs, will increase at a slightly lower rate than revenue; |
· | Capital expenditures of $2.6 million for a plant expansion in fiscal years 2015 and 2016, and annual maintenance capital expenditures ranging from $0.5 million to $0.7 million. |
· | the cancellation and cashing out of all stock options, whether vested or unvested, held by the executive officers; |
· | the payment of cash bonuses at the effective time to such individuals equal to 100% of the payment that such executive officers would be entitled to receive assuming performance at the FY2015 Pre-Tax/Pre-Bonus income level set forth in the Elecsys FY2015 Executive Bonus Plan, prorated for the portion of fiscal 2015 ending on the last day of the month immediately preceding the effective time and reduced by any income or employment tax required to be withheld with respect to such payment; |
· | the entitlement of certain of such executive officers to receive guaranteed compensation from the surviving corporation, with his current salary, until the first anniversary of the closing of the merger, unless such executive officer terminates his employment with the surviving corporation for any reason or such officer’s employment is terminated by the surviving corporation prior to the first anniversary of the closing of the merger (i) for cause (as defined in the agreement entered into by each such officer) or (ii) by reason of his death or disability; and |
· | the provision of indemnification and insurance arrangements under the merger agreement and Elecsys’ articles of incorporation and bylaws. |
Executive Officer
|
Bonus
|
|||
Karl B. Gemperli
|
$
|
35,950
|
||
Todd A. Daniels
|
$
|
21,570
|
||
Michael D. Morgan
|
$
|
21,570
|
||
Daniel L. Hughes
|
$
|
21,570
|
||
Pete Osheim
|
$
|
21,570
|
||
Total
|
Name
|
Cash(1)
|
Equity(2)
|
Other(3)
|
Total
|
||||||||||||
Karl B. Gemperli
|
$
|
255,000
|
$
|
928,600
|
$
|
35,950
|
$
|
1,219,550
|
||||||||
Todd A. Daniels
|
$
|
160,000
|
$
|
473,200
|
$
|
21,570
|
$
|
654,770
|
||||||||
Michael D. Morgan
|
$
|
173,500
|
$
|
404,000
|
$
|
21,570
|
$
|
599,070
|
(1) | Consists of the cash payment that would be payable to the named executive officer if his employment with the surviving corporation is terminated without cause by the surviving corporation during the period lasting for 1 year after the effective time, pursuant to the terms of the offer letter that he executed with Merger Sub on November 4, 2014. |
(2) | Represents the value of all stock options to be cancelled and cashed out upon closing of the merger; calculated as the merger consideration of $17.50 per share minus the exercise price of the option, multiplied by the number of shares subject to the award. |
(3) | Consists of the cash bonus payable to the named executive officer pursuant to the terms of the merger agreement. |
Name |
Shares
Held
(#) |
Shares
Held
($)
|
Options
Held
(#)
|
Options
Held
($)
|
Restricted
Stock
Held (#)
|
Restricted
Stock
Held ($)
|
Total ($) |
|||||||||||||||||||||
Robert D. Taylor
|
242,276
|
$
|
4,239,830
|
-
|
-
|
2,678
|
$
|
46,865
|
$
|
4,286,695
|
||||||||||||||||||
Stan Gegen
|
256,293
|
$
|
4,485,128
|
-
|
-
|
2,678
|
$
|
46,865
|
$
|
4,531,993
|
||||||||||||||||||
George Semb
|
22,000
|
$
|
385,000
|
-
|
-
|
965
|
$
|
16,888
|
$
|
401,888
|
||||||||||||||||||
Laura Ozenberger
|
-
|
-
|
-
|
-
|
965
|
$
|
16,888
|
$
|
16,888
|
|||||||||||||||||||
Karl B. Gemperli
|
517,000
|
$
|
9,047,500
|
75,000
|
$
|
928,600
|
-
|
-
|
$
|
9,976,100
|
||||||||||||||||||
Todd A. Daniels
|
62,224
|
$
|
1,088,920
|
40,000
|
$
|
473,200
|
-
|
-
|
$
|
1,562,120
|
||||||||||||||||||
Michael D. Morgan
|
114,728
|
$
|
2,007,740
|
35,000
|
$
|
404,000
|
-
|
-
|
$
|
2,411,740
|
||||||||||||||||||
Dan Hughes
|
100
|
$
|
1,750
|
55,000
|
$
|
709,580
|
-
|
-
|
$
|
711,330
|
||||||||||||||||||
Pete Osheim
|
-
|
-
|
15,000
|
$
|
82,000
|
-
|
-
|
$
|
82,000
|
• | deliver to Elecsys a written demand for appraisal of such stockholder’s shares prior to the taking of the vote on the merger agreement and the merger at the special meeting of stockholders, which demand will be sufficient if it reasonably informs Elecsys of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares; and |
• | not vote the holder’s shares of common stock in favor of, or consent to, the approval and adoption of the merger or the merger agreement. A proxy which does not contain voting instructions will, unless revoked, be voted in favor of the approval and adoption of the merger and the merger agreement. Therefore, a stockholder who votes by proxy and who wishes to exercise appraisal rights must not vote in favor of or consent to the approval and adoption of the merger and the merger agreement. |
• | any such attempt to withdraw made more than 60 days after the effective date of the merger will require written approval of the surviving corporation, and |
• | no appraisal proceeding in the Kansas district court shall be dismissed as to any stockholder without the approval of the Kansas district court, and such approval may be conditioned upon such terms as the Kansas district court deems just. |
· | our and our subsidiaries’ organization, existence, good standing, qualification to do business and similar corporate matters; |
· | our and our subsidiaries’ capitalization and capital structure; |
· | our corporate power and authority to enter into and perform our obligations under the merger agreement and complete the merger, and the enforceability and due execution and delivery of the merger agreement; |
· | the absence of conflicts with our organizational documents, applicable law or certain contracts as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby; |
· | the absence of defaults or accelerations of obligations under certain contracts, or creation of liens on our assets, in each case, resulting from our entry into the merger agreement or the completion of the merger; |
· | consents, approvals, filings and registrations required from governmental entities to enter into the merger agreement and complete the merger; |
· | our financial statements and SEC filings, disclosure controls and procedures and internal control over financial reporting, and the Sarbanes−Oxley Act of 2002; |
|
· | the absence of undisclosed liabilities; |
· | the absence since April 30, 2014 of any events that have had or would reasonably be expected to have a material adverse effect on Elecsys, or certain actions by Elecsys not taken in the ordinary course of business consistent with past practice; |
· | the absence of proceedings, claims, actions or governmental or regulatory investigations or other proceedings pending or threatened against us and the absence of certain orders against us; |
· | our and our subsidiaries’ compliance with applicable laws, including, without limitation, applicable environmental, anticorruption and export laws; |
· | our and our subsidiaries’ compliance with tax laws and other tax matters; |
· | employment, labor and employee−benefit matters affecting us and our subsidiaries; |
· | our and our subsidiaries’ material contracts; |
· | our owned and leased real property and our other assets and property; |
· | intellectual property; |
· | environmental matters; |
· | our insurance policies; |
· | the absence of any rights agreement, “poison pill” or similar agreements and plans; |
· | brokers and financial advisors; |
· | the recommendation of the Elecsys Board that the Elecsys shareholders vote for the merger proposal; |
· | transactions between Elecsys and its affiliates; |
· | the validity of, and absence of default under, certain material contracts of Elecsys and its subsidiaries; |
· | our customers and vendors; and |
· | our receipt of an opinion from CC Capital Advisors regarding the fairness, from a financial point of view, of the consideration to be received by holders of Elecsys common stock. |
· | seasonal fluctuations in the business of Elecsys and its subsidiaries; |
|
· | any acts of terrorism, war, national or international calamity or any other similar event; |
· | the taking of any action required by, or the failure to take any action prohibited by, the merger agreement; |
· | the announcement or pendency of the merger agreement or the merger (including stockholder litigation in connection therewith); |
· | general economic, business, regulatory, financial or market conditions in the United States and/or elsewhere in the world (in each case, as long as Elecsys and/or its subsidiaries are not disproportionately affected thereby); |
· | conditions affecting any of the industries or industry sectors in which Elecsys or any of its subsidiaries operates (in each case, as long as Elecsys and/or its subsidiaries are not disproportionately affected thereby); or |
· | any change in any law or accounting principle, or any change in interpretation of either of the foregoing. |
· | organization, existence, good standing, qualification to do business and similar corporate matters; |
· | corporate power and authority to enter into and perform their obligations under the merger agreement and complete the merger, and the enforceability and due execution and delivery of the merger agreement; |
· | the absence of conflicts with their respective organizational documents, applicable law or certain contracts as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby; |
· | consents, approvals, filings and registrations required from governmental entities to enter into the merger agreement and complete the merger; |
· | the absence of actions, suits, inquiries, pending or threatened against Lindsay and the absence of certain orders against Lindsay; |
· | the accuracy of the information supplied by Lindsay or any of its affiliates in connection with this proxy statement; |
· | the purposes of the formation of Merger Sub and the absence of any business activities conducted by it; |
· | the availability and sufficiency of funds to pay the merger consideration and merger−related costs; |
· | ownership by Lindsay of Elecsys common stock or other securities of Elecsys; and |
· | brokers and financial advisors. |
· |
we will not, directly or indirectly, (i) amend our articles of incorporation or bylaws; or (ii) split, combine or reclassify the outstanding Elecsys common stock or any outstanding capital stock of any of our subsidiaries;
|
· | neither we nor any of our subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution with respect to its capital stock (other than dividends from any of our subsidiaries to us or any other subsidiary); (ii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to sell or acquire, any shares of capital stock of any class of ours or of our subsidiaries, other than issuances pursuant to the exercise of Elecsys stock options outstanding on the date of the merger agreement; or (iii) redeem, purchase or otherwise acquire directly or indirectly any of our capital stock; |
· | neither we nor any of our subsidiaries shall acquire, sell, lease or dispose of any material assets, stock, or other ownership interest in any of our properties or subsidiaries other than inventory in the ordinary course of business; |
· | we shall not, and shall not permit any of our subsidiaries to, acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the assets of any entity or division thereof that would be material to us and our subsidiaries, taken as a whole, or (ii) any assets, except for purchases in the ordinary course of business consistent with past practice; |
· | neither we nor any of our subsidiaries shall, except as contemplated by the merger agreement, enter into, adopt or materially amend any employee benefit plans or amend any employment or severance agreement or increase in any manner the compensation of any employees, except, in the case of any increase in compensation for non-officer employees, for increases in the ordinary course of business consistent with past practice; provided, that nothing herein will be deemed to restrict or prohibit the payment of benefits as they become due and payable; |
· | neither we nor any of our subsidiaries shall enter into any labor or collective bargaining agreement through negotiation or otherwise, or make any commitment or incur any liability to any labor organization with respect to us or any of our subsidiaries; |
· | neither we nor any of our subsidiaries shall: (i) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than our subsidiaries), except in the ordinary course of business; or (ii) make any loans, advances or capital contributions to, or investments in, any other person (other than to our subsidiaries), other than in the ordinary course of business consistent with past practice and other than routine advances to employees; |
· | neither we nor any of our subsidiaries shall change any of the accounting methods or practices used by it unless required by U.S. generally accepted accounting principles or applicable law; |
· | neither we nor any of our subsidiaries shall: (i) settle or compromise any material tax claim, audit or assessment; (ii) make or change any material tax election, change any annual tax accounting period, or adopt or change any method of tax accounting; (iii) amend any material tax returns or file claims for material tax refunds; or (iv) enter into any material closing agreement, surrender in writing any right to claim a material tax refund, offset or other reduction in tax liability or consent to any extension or waiver of the limitation period applicable any material tax claim or assessment relating to us or our subsidiaries; |
· | neither we nor any of our subsidiaries will adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of us or any of our subsidiaries; |
· | neither we nor any of our subsidiaries will settle or compromise any material claim (including arbitration) or material litigation; and |
· | neither we nor any of our subsidiaries will authorize or enter into an agreement to do any of the foregoing. |
· | solicit, initiate, knowingly facilitate or knowingly encourage any inquiries or the making or submission of any proposal that constitutes, or could reasonably be expected to lead to, a competing acquisition proposal; |
· | participate or engage in any discussions or negotiations with, or furnish any non-public information to, any third person relating to a competing acquisition proposal; |
· | afford access to the properties, books or records of Elecsys or any of its subsidiaries to any person that has made, or to the knowledge of Elecsys, is considering making, any competing acquisition proposal, |
· | entering into any letter of intent or agreement in principle or any agreement or understanding providing for any competing acquisition proposal; or |
· | proposing publicly or agree to any of the foregoing relating to a competing acquisition proposal. |
· | Elecsys may furnish information to the person making such competing acquisition proposal pursuant to an executed confidentiality agreement on terms no less restrictive to the person making the competing acquisition proposal than the terms of the confidentiality agreement entered into between Elecsys and Lindsay prior to the negotiation of the merger agreement; provided such information is concurrently furnished to Lindsay in the same form provided to such person; |
· | Elecsys may engage in discussions or negotiations with such person with respect to the competing acquisition proposal; and |
· | the Elecsys Board may withhold, withdraw or change its recommendation to Elecsys’ stockholders regarding the transaction with Lindsay following receipt of a superior proposal, subject to complying with certain notice and other specified conditions, including giving Lindsay the opportunity to propose changes to the merger agreement in response to such superior proposal. |
· | the Elecsys Board shall have determined in good faith, in response to an unsolicited superior proposal made in circumstances not otherwise constituting a breach of the merger agreement, after consultation with outside legal counsel, that the failure of the Elecsys Board to effect a change of recommendation would be reasonably likely to result in a breach of the Elecsys Board’s fiduciary duties to the Elecsys stockholders under applicable law; |
· | Elecsys provides Lindsay written notice of the material terms and conditions of such proposal and its intention to effect a change of recommendation 3 business days prior to effecting a change of recommendation; and |
· | Lindsay does not provide, within 3 business days of receiving such written notice, revisions to the terms of the merger or the merger agreement that the Elecsys Board determines in good faith, after consultation with outside legal and financial advisors, is at least as favorable as such superior proposal from a financial point of view to the Elecsys stockholders. |
· | the merger agreement is approved by Elecsys’ stockholders at the special meeting; |
· | no statute, rule, regulation, order, or decree and no injunction has been entered, enacted, promulgated or issued by any governmental entity or court which prohibits the consummation of the transactions contemplated by the merger agreement; |
· | Elecsys’ representations and warranties in the merger agreement must be true and correct, subject to certain materiality thresholds, as of the date of the merger agreement and the date of the closing of the merger; |
· | Elecsys shall have performed or complied in all material respects with each of its obligations under the merger agreement at or prior to the closing of the merger; and |
· | Elecsys shall have delivered to Lindsay a certificate, dated the effective time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that certifying to the effect that the conditions to closing set forth in the two bullet points immediately above have been satisfied; |
· | since the date of the merger agreement, no event, change, circumstance, occurrence, effect or state of facts has occurred and is continuing that would result in a material adverse effect on Elecsys. |
· | Lindsay’s and Merger Sub’s respective representations and warranties in the merger agreement must be true and correct, subject to certain materiality thresholds, as of the date of the closing of the merger; |
· | Lindsay shall have performed or complied in all material respects with each of its obligations under the merger agreement at or prior to the closing of the merger; and |
· | Lindsay shall have delivered to Elecsys a certificate, dated the effective time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that the conditions to closing set forth in the two bullet points immediately above have been satisfied. |
· | if the merger has not occurred on or before February 28, 2015, so long as the terminating party has not willfully breached any representation or warranty in the merger agreement or taken any action or failed to take any action that caused or resulted in the failure to consummate the merger; |
· | if any governmental entity has issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the merger agreement or prohibiting Lindsay from acquiring or holding or exercising rights of ownership of the Elecsys common stock, and such order, decree, ruling or other action shall have become final and non-appealable; or |
· | if the special meeting (including any adjournment or postponement thereof) has concluded, the Elecsys stockholders have voted on the merger proposal, and approval of the merger proposal by the Elecsys stockholders has not been obtained. |
· | if, prior to obtaining the approval of the Elecsys stockholders, the Elecsys Board, subject to complying with the terms of the merger agreement, authorizes Elecsys to enter into a binding written agreement concerning a transaction that constitutes a superior proposal (provided that, if Lindsay has proposed revisions to the terms of the merger or the merger agreement within 3 business days after receiving notice from Elecsys of such proposal, Elecsys has negotiated in good faith with Lindsay to amend the terms of the merger agreement so that the merger is at least as favorable as such proposal from a financial perspective); or |
· | if (i) Lindsay or Merger Sub shall have breached any of their representations, warranties, covenants or agreements set forth in the merger agreement or (ii) if any of Lindsay’s or Merger Sub’s representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of certain conditions to the obligations of Elecsys to consummate the merger; provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 20 days after written notice thereof shall have been received by Lindsay. |
· | if prior to obtaining the approval of the Elecsys stockholders, (i) the Elecsys Board shall have effected a change of recommendation in a manner adverse to Lindsay or shall have recommended or adopted another acquisition proposal, (ii) the Elecsys Board shall have failed to affirm its recommendation of the merger within 5 days of a reasonable request to do so by Lindsay, or (iii) Elecsys or the Elecsys Board shall have resolved, or publicly announced an intention to, take either of the foregoing actions; |
· | if (i) Elecsys shall have breached any of its representations, warranties, covenants or agreements set forth in the merger agreement or (ii) any of Elecsys’ representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of certain conditions to the obligations of Lindsay and Merger Sub to consummate the merger; provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 20 days after written notice thereof shall have been received by Elecsys; |
· | if prior to obtaining the approval of Elecsys stockholders, any of Messrs. Daniels, Gegen, Taylor, Morgan, Hughes or Gemperli breaches or rescinds the Support Agreement that he executed and delivered to Lindsay concurrently with the execution and delivery of the merger agreement; or |
· | the special meeting shall not have been called or held (subject to any adjournment or postponement thereof which is reasonably necessary to facilitate the consummation of the transactions contemplated by the merger agreement and which will not, in any event, exceed 20 days) within 10 days after written notice of the failure to hold the special meeting shall have been received by Elecsys from Lindsay, or Elecsys or the Elecsys Board shall have resolved not to, or publicly announced an intention not to, call or hold the special meeting. |
· | if the merger agreement is terminated by Elecsys because the Elecsys Board authorizes, prior to obtaining the approval of the Elecsys stockholders and subject to complying with the terms of the merger agreement, Elecsys to enter into a binding written agreement concerning a transaction that constitutes a superior proposal; |
· | if the merger agreement is terminated by Lindsay prior to obtaining the approval of the Elecsys stockholders because (i) the Elecsys Board shall have effected a change of recommendation in a manner adverse to Lindsay or shall have recommended or adopted another acquisition proposal, (ii) the Elecsys Board shall have failed to affirm its recommendation of the merger within 5 days of a reasonable request to do so by Lindsay, or (iii) Elecsys or the Elecsys Board shall have resolved, or publicly announced an intention to, take either of the foregoing actions; |
· | if the merger agreement is terminated by Lindsay because (i) the special meeting shall not have been called or held (subject to any adjournment or postponement thereof which is reasonably necessary to facilitate the consummation of the transactions contemplated by the merger agreement and which will not, in any event, exceed 20 days) within 10 days after written notice of the failure to hold the special meeting shall have been received by Elecsys from Lindsay, or Elecsys or the Elecsys Board shall have resolved not to, or publicly announced an intention not to, call or hold the special meeting, and (ii) within 1 year of such termination of the merger agreement, Elecsys consummates a competing acquisition proposal; |
· | if a competing acquisition proposal shall have been made known to Elecsys or shall have been made directly to Elecsys’ stockholders or any third party shall have publicly announced an intention (whether or not conditional) to make a competing acquisition proposal, and thereafter (i) the merger agreement is terminated by Elecsys or Lindsay or Merger Sub because the effective time has not occurred on or before February 28, 2015, and (ii) such competing acquisition proposal (whether or not modified after it was first made) is consummated within 1 year of such termination of the merger agreement; or |
· | if the merger agreement is terminated by Lindsay because Elecsys breached its covenants restricting its ability to solicit competing acquisition proposals, as described in the section of this proxy statement titled “The Merger Agreement – Restrictions on Solicitation of Acquisition Proposals” beginning on page 56. |
Fiscal Quarter
|
High ($)
|
Low ($)
|
||||||
Fiscal 2015
|
||||||||
First Quarter ended July 31, 2014
|
14.91
|
10.92
|
||||||
Second Quarter ended October 31, 2014
|
15.21
|
9.99
|
||||||
Fiscal 2014
|
||||||||
First Quarter ended July 31, 2013
|
7.40
|
5.56
|
||||||
Second Quarter ended October 31, 2013
|
10.50
|
5.85
|
||||||
Third Quarter ended January 31, 2014
|
15.20
|
7.91
|
||||||
Fourth Quarter ended April 30, 2014
|
15.15
|
11.80
|
||||||
Fiscal 2013
|
||||||||
First Quarter ended July 31, 2012
|
5.00
|
3.75
|
||||||
Second Quarter ended October 31, 2012
|
3.98
|
3.00
|
||||||
Third Quarter ended January 31, 2013
|
4.82
|
3.00
|
||||||
Fourth Quarter ended April 30, 2013
|
5.88
|
4.01
|
||||||
Fiscal 2012
|
||||||||
First Quarter ended July 31, 2011
|
7.15
|
4.85
|
||||||
Second Quarter ended October 31, 2011
|
6.06
|
3.55
|
||||||
Third Quarter ended January 31, 2012
|
4.70
|
4.00
|
||||||
Fourth Quarter ended April 30, 2012
|
5.37
|
4.10
|
Name and Address of Beneficial Owner (1)
|
Amount and Nature
of Beneficial
Ownership (2)
|
Percent
of Class
|
||||||||
Robert D. Taylor
|
242,276
|
6.3
|
%
|
|||||||
Stan Gegen
|
256,293
|
6.7
|
%
|
|||||||
Dr. George B. Semb
|
22,000
|
(3)
|
|
*
|
||||||
Laura L. Ozenberger
|
--
|
*
|
||||||||
Karl B. Gemperli
|
580,333
|
(4)
|
|
15.2
|
%
|
|||||
Michael D. Morgan
|
138,061
|
(5)
|
|
3.6
|
%
|
|||||
Todd A. Daniels
|
90,557
|
(6)
|
|
2.4
|
%
|
|||||
All directors and officers as a group (9 persons)
|
1,354,620
|
(7)
|
|
35.4
|
%
|
(1) | Unless otherwise noted, the address of all the named individuals is c/o Elecsys Corporation, 846 N. Mart-Way Court, Olathe, Kansas 66061. |
(2) | Pursuant to the rules of the SEC, shares of Elecsys common stock that an individual or a group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage of ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. |
(3)
|
Includes 2,500 shares of Elecsys common stock indirectly owned by Dr. Semb’s spouse.
|
(4) | The total beneficial ownership of Mr. Gemperli is made up of the following: (i) 482,000 shares of Elecsys common stock directly owned, (ii) 35,000 shares of Elecsys common stock indirectly owned by Mr. Gemperli’s children, and (iii) presently exercisable options to purchase 63,333 shares of Elecsys common stock. |
(5) | Includes presently exercisable options to purchase 23,333 shares of Elecsys common stock held by Mr. Morgan. |
(6) | Includes presently exercisable options to purchase 28,333 shares of Elecsys common stock held by Mr. Daniels. |
(7) | Includes presently exercisable options to purchase 139,999 shares of Elecsys common stock held by executive officers and directors as a group. |
· | dealers or traders subject to a mark−to−market method of tax accounting with respect to Elecsys common stock; |
· | persons holding Elecsys common stock as part of a straddle, hedging transaction, conversion transaction, integrated transaction or constructive sale transaction; |
· | holders whose functional currency is not the U.S. dollar; |
· | persons who acquired Elecsys common stock through the exercise of employee stock options or otherwise as compensation; |
· | banks and certain other financial institutions; |
· | insurance companies; |
· | regulated investment companies; |
· | real estate investment trusts; |
· | partnerships, S corporations or other pass−through entities; |
· | controlled foreign corporations and passive foreign investment companies; |
· | certain former citizens or residents of the United States; |
· | tax−exempt organizations; |
· | tax−qualified retirement plans; or |
|
· | persons subject to the United States alternative minimum tax. |
· | a citizen or resident of the United States; |
|
· | a corporation, or other entity taxable as a corporation for U. S. federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia; |
· | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
· | a trust if (i) a court within the United States can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
· | the gain, if any, on such shares is effectively connected with a trade or business of the non−U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to the non−U.S. holder’s permanent establishment in the United States); |
· | the non−U. S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange of shares of Elecsys common stock for cash pursuant to the merger and certain other conditions are met; or |
· | the non−U. S. holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of the Elecsys common stock at any time during the five−year period preceding the merger, and Elecsys is or has been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code for U.S. federal income tax purposes at any time during the shorter of the five−year period preceding the merger or the period that the non−U.S. holder held Elecsys common stock. |
· | Elecsys’ Annual Report on Form 10−K for the fiscal year ended April 30, 2014, filed July 14, 2014; |
· | Elecsys’ Quarterly Report on Form 10−Q for the period ended July 31, 2014 filed on September 8, 2014; |
· | Elecsys’ Quarterly Report on Form 10−Q for the period ended October 31, 2014 filed on December 15, 2014; and |
· | Elecsys’ Current Reports on Form 8−K filed with the SEC on November 3, 2014, November 4, 2014 and November 6, 2014. |
Page | ||
ARTICLE I THE MERGER
|
1
|
|
Section 1.1
|
The Merger
|
1
|
Section 1.2
|
Closing
|
1
|
Section 1.3
|
Effective Time
|
2
|
Section 1.4
|
Effects of the Merger
|
2
|
Section 1.5
|
Articles of Incorporation and By-Laws
|
2
|
Section 1.6
|
Directors and Officers of the Surviving Corporation
|
2
|
Section 1.7
|
Conversion of Capital Stock
|
2
|
Section 1.8
|
Exchange of Certificates
|
3
|
Section 1.9
|
Dissenting Shares
|
5
|
Section 1.10
|
Company Option Plans; Restricted Stock Awards
|
5
|
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
6
|
|
Section 2.1
|
Organization of the Company and its Subsidiaries
|
6
|
Section 2.2
|
Capitalization
|
7
|
Section 2.3
|
Authorization; Validity of Agreement; Company Action
|
8
|
Section 2.4
|
Consents and Approvals; No Violations
|
9
|
Section 2.5
|
SEC Reports and Financial Statements
|
9
|
Section 2.6
|
Internal Controls and Procedures
|
10
|
Section 2.7
|
No Undisclosed Liabilities
|
10
|
Section 2.8
|
Absence of Certain Changes
|
10
|
Section 2.9
|
Employee Benefit Plans; ERISA
|
10
|
Section 2.10
|
Litigation
|
12
|
Section 2.11
|
Compliance with Laws; Permits
|
12
|
Section 2.12
|
Environmental Matters
|
13
|
Section 2.13
|
Taxes
|
14
|
Section 2.14
|
Labor Relations
|
16
|
Section 2.15
|
Real Property
|
16
|
Section 2.16
|
Intellectual Property
|
16
|
Section 2.17
|
Brokers or Finders
|
17
|
Section 2.18
|
Opinion of Financial Advisor
|
17
|
Section 2.19
|
Board Recommendation
|
17
|
Section 2.20
|
Material Contracts
|
17
|
Section 2.21
|
Transactions with Affiliates
|
17
|
Section 2.22
|
Anti-Takeover Provisions; Absence of Rights Agreement
|
18
|
Section 2.23
|
Company Stockholder Approval
|
18
|
Section 2.24
|
Customers and Vendors
|
18
|
Section 2.25
|
Insurance
|
18
|
Section 2.26
|
Assets and Property
|
19
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
|
19
|
Page | ||
Section 3.1
|
Organization
|
19
|
Section 3.2
|
Authorization; Validity of Agreement; Necessary Action
|
19
|
Section 3.3
|
Consents and Approvals; No Violations
|
20
|
Section 3.4
|
Sufficient Funds
|
20
|
Section 3.5
|
Share Ownership
|
20
|
Section 3.6
|
Merger Sub’s Operations
|
20
|
Section 3.7
|
Brokers or Finders
|
20
|
Section 3.8
|
Litigation
|
20
|
ARTICLE IV COVENANTS
|
21
|
|
Section 4.1
|
Interim Operations of the Company
|
21
|
Section 4.2
|
Access to Information
|
22
|
Section 4.3
|
Employee Benefits
|
23
|
Section 4.4
|
No Solicitation
|
24
|
Section 4.5
|
Publicity
|
26
|
Section 4.6
|
Directors’ and Officers’ Insurance and Indemnification
|
27
|
Section 4.7
|
Stockholder Meeting; Proxy; Company Disclosure Documents
|
28
|
Section 4.8
|
Approvals and Consents; Cooperation; Notification
|
30
|
Section 4.9
|
Reasonable Efforts; Further Assurances
|
31
|
Section 4.10
|
Merger Sub
|
31
|
ARTICLE V CONDITIONS
|
31
|
|
Section 5.1
|
Conditions to Each Party’s Obligation to Effect the Merger
|
31
|
Section 5.2
|
Conditions to Obligation of the Company to Effect the Merger
|
32
|
Section 5.3
|
Condition to Obligations of Parent and Merger Sub
|
32
|
ARTICLE VI TERMINATION
|
33
|
|
Section 6.1
|
Termination
|
33
|
Section 6.2
|
Effect of Termination
|
35
|
Section 6.3
|
Termination Fee; Expenses
|
35
|
ARTICLE VII MISCELLANEOUS
|
36
|
|
Section 7.1
|
Amendment and Modification
|
36
|
Section 7.2
|
Nonsurvival of Representations and Warranties
|
36
|
Section 7.3
|
Notices
|
37
|
Section 7.4
|
Other Defined Terms; Interpretation
|
38
|
Section 7.5
|
Counterparts
|
38
|
Section 7.6
|
Entire Agreement; Third Party Beneficiaries
|
39
|
Section 7.7
|
Severability
|
39
|
Section 7.8
|
Governing Law; Jurisdiction
|
39
|
Section 7.9
|
Specific Performance
|
39
|
Section 7.10
|
Assignment
|
39
|
Section 7.11
|
Headings
|
40
|
Section 7.12
|
Waivers
|
40
|
Section 7.13
|
WAIVER OF JURY TRIAL
|
40
|
Acquisition Proposal
|
Section 4.4(e)(i)
|
Affiliate
|
Section 2.17
|
Agreement
|
Preamble
|
Benefit Plans
|
Section 2.9(a)
|
Board of Directors
|
Recitals
|
Book Entry Share
|
Section 1.7(c)
|
Cash-Based Awards
|
Section 1.8(b)
|
Certificate of Merger
|
Section 1.3
|
Certificates
|
Section 1.8(b)
|
Change of Recommendation
|
Section 4.4(c)
|
Claim
|
Section 4.6(a)
|
Closing
|
Section 1.2
|
Closing Date
|
Section 1.2
|
Code
|
Section 2.9(b)
|
Company
|
Preamble
|
Company Assets
|
Section 2.26
|
Company Board Recommendation
|
Section 4.7(b)
|
Company Common Stock
|
Section 1.7
|
Company Disclosure Documents
|
Section 4.7(e)
|
Company Disclosure Letter
|
Article II
|
Company Equity Plans
|
Section 1.10(b)
|
Company Intellectual Property
|
Section 2.16(b)
|
Company Material Adverse Effect
|
Section 2.1(a)
|
Company Permits
|
Section 2.11(b)
|
Company Preferred Stock
|
Section 2.2(a)
|
Company Restricted Stock Plans
|
Section 1.10(b)
|
Company SEC Documents
|
Section 2.5
|
Company Stockholder Approval
|
Section 4.7(a)(i)
|
Company Stock Option Plans
|
Section 1.10(a)
|
Company Stock Options
|
Section 1.10(a)
|
Confidentiality Agreement
|
Section 4.2
|
Designated Company Representations
|
Section 5.3(a)
|
D&O Insurance
|
Section 4.6(d)
|
Dissenting Shares
|
Section 1.9
|
Effective Time
|
Section 1.3
|
Employee
|
Section 4.3(a)
|
Entity
|
Section 7.4(a)(i)
|
Environmental Law
|
Section 2.12(c)(i)
|
Environmental Permit
|
Section 2.12(c)(i)
|
Export Law
|
Section 2.11(c)
|
ERISA
|
Section 2.9(a)
|
ERISA Affiliate
|
Section 2.9(a)
|
Exchange Act
|
Section 2.4
|
Executive Incentive Plan
|
Section 4.3(c)
|
Final Order
|
Section 6.1(b)(ii)
|
Foreign Company Plan
|
Section 2.9(g)
|
GAAP
|
Section 2.1(a)
|
Governmental Entity
|
Section 2.4
|
Hazardous Substance
|
Section 2.12(c)(iii)
|
Insurance Policies
|
Section 2.25
|
Indemnified Party
|
Section 4.6(a)
|
IRS
|
Section 2.13(d)
|
KGCC
|
Recitals
|
Knowledge
|
Section 7.4(a)(ii)
|
Law
|
Section 2.11(a)
|
Legal Proceeding
|
Section 4.8(b)
|
Material Contracts
|
Section 2.4
|
Merger
|
Recitals
|
Merger Consideration
|
Section 1.7(c)
|
Merger Sub
|
Preamble
|
Parent
|
Preamble
|
Parent Material Adverse Effect
|
Section 3.1
|
Paying Agent
|
Section 1.8(a)
|
Person
|
Section 7.4(a)(iii)
|
Proxy Statement
|
Section 4.7(a)(ii)
|
Release
|
Section 2.12(c)(iv)
|
Representatives
|
Section 4.4(a)
|
Restricted Stock Awards
|
Section 1.10(b)
|
SEC
|
Section 2.5
|
Section 409A
|
Section 2.9(f)
|
Securities Act
|
Section 2.5
|
Shares
|
Section 1.7
|
Special Meeting
|
Section 4.7(a)(i)
|
Subsidiary
|
Section 2.1(b)
|
Superior Proposal
|
Section 4.4(e)(ii)
|
Support Agreement
|
Recitals
|
Supporting Stockholder
|
Recitals
|
Surviving Corporation
|
Section 1.1
|
Taxes
|
Section 2.13(i)(i)
|
Tax Return
|
Section 2.13(i)(ii)
|
Termination Date
|
Section 6.1(b)(i)
|
Termination Fee
|
Section 6.3(a)
|
(a)
|
if to Parent or Merger Sub, to:
|
(b)
|
if to the Company, to:
|
ELECSYS CORPORATION
|
||
By:
|
/s/ Karl B. Gemperli
|
|
Name: Karl B. Gemperli
|
||
Title: President and Chief Executive Officer
|
||
LINDSAY CORPORATION
|
||
By:
|
/s/ Richard W. Parod
|
|
Name: Richard W. Parod
|
||
Title: President and Chief Executive Officer
|
||
MATTERHORN MERGER SUB, INC.
|
||
By:
|
/s/ Richard W. Parod
|
|
Name: Richard W. Parod
|
||
Title: President
|
[NAME OF SUPPORTING STOCKHOLDER]
|
||
LINDSAY CORPORATION
|
||
By:
|
||
Name:
|
||
Title:
|
||
MATTERHORN MERGER SUB INC.
|
||
By:
|
||
Name:
|
||
Title:
|
Name of Supporting Stockholder
|
Shares of Company Common Stock
|
[l]
|
[l]
|
TOTAL
|
[l]
|
|
Kansas City, Missouri 64105
816-360-8600¡ Fax: 816-421-0080
|
Very truly yours,
|
|
CC Capital Advisors
|
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