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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gilat Satellite Networks Ltd | NASDAQ:GILT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.10 | 1.86% | 5.47 | 5.30 | 6.98 | 5.51 | 5.38 | 5.50 | 180,317 | 05:00:04 |
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Six Months Ended
January 31, |
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Fiscal Year Ended July 31,
|
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(In thousands, except per share amounts)
|
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2020
|
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2019
|
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2019
|
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2018
|
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2017
|
| |||||||||||||||
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(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |||||||||
Consolidated Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 331,921 | | | | | $ | 324,977 | | | | | $ | 671,797 | | | | | $ | 570,589 | | | | | $ | 550,368 | | |
Cost of sales
|
| | | | 207,752 | | | | | | 205,963 | | | | | | 424,357 | | | | | | 346,648 | | | | | | 332,183 | | |
Gross profit
|
| | | | 124,169 | | | | | | 119,014 | | | | | | 247,440 | | | | | | 223,941 | | | | | | 218,185 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative
|
| | | | 61,225 | | | | | | 63,834 | | | | | | 128,639 | | | | | | 113,922 | | | | | | 116,080 | | |
Research and development
|
| | | | 28,601 | | | | | | 27,193 | | | | | | 56,407 | | | | | | 53,869 | | | | | | 54,260 | | |
Amortization of intangibles
|
| | | | 10,435 | | | | | | 8,577 | | | | | | 18,320 | | | | | | 21,075 | | | | | | 22,823 | | |
Settlement of intellectual property litigation
|
| | | | — | | | | | | (3,204) | | | | | | (3,204) | | | | | | — | | | | | | (12,020) | | |
Acquisition plan expenses
|
| | | | 8,414 | | | | | | 2,908 | | | | | | 5,871 | | | | | | — | | | | | | — | | |
| | | | | 108,675 | | | | | | 99,308 | | | | | | 206,033 | | | | | | 188,866 | | | | | | 181,143 | | |
Operating income
|
| | | | 15,494 | | | | | | 19,706 | | | | | | 41,407 | | | | | | 35,075 | | | | | | 37,042 | | |
Other expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | 3,420 | | | | | | 4,936 | | | | | | 9,245 | | | | | | 10,195 | | | | | | 11,629 | | |
Write-off of deferred financing costs
|
| | | | — | | | | | | 3,217 | | | | | | 3,217 | | | | | | — | | | | | | — | | |
Interest (income) and other
|
| | | | (71) | | | | | | 15 | | | | | | 35 | | | | | | 254 | | | | | | (68) | | |
Income before provision for (benefit from) income taxes
|
| | | | 12,145 | | | | | | 11,538 | | | | | | 28,910 | | | | | | 24,626 | | | | | | 25,481 | | |
Provision for (benefit from) income taxes
|
| | | | 2,262 | | | | | | 244 | | | | | | 3,869 | | | | | | (5,143) | | | | | | 9,654 | | |
Net income
|
| | | $ | 9,883 | | | | | $ | 11,294 | | | | | $ | 25,041 | | | | | $ | 29,769 | | | | | $ | 15,827 | | |
|
| | |
Six Months Ended
January 31, |
| |
Fiscal Year Ended July 31,
|
| ||||||||||||||||||||||||
(In thousands, except per share amounts)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| |
2017
|
| |||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |||||||||
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.40 | | | | | $ | 0.47 | | | | | $ | 1.04 | | | | | | 1.25 | | | | | $ | 0.68 | | |
Diluted
|
| | | $ | 0.40 | | | | | $ | 0.47 | | | | | $ | 1.03 | | | | | | 1.24 | | | | | $ | 0.67 | | |
Weighted average number of common shares outstanding – basic
|
| | | | 24,607 | | | | | | 24,017 | | | | | | 24,124 | | | | | | 23,825 | | | | | | 23,433 | | |
Weighted average number of common and common equivalent shares outstanding – diluted
|
| | | | 24,904 | | | | | | 24,245 | | | | | | 24,302 | | | | | | 24,040 | | | | | | 23,489 | | |
Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 949,942 | | | | | $ | 843,327 | | | | | $ | 887,711 | | | | | $ | 845,157 | | | | | $ | 832,063 | | |
Working capital
|
| | | | 126,400 | | | | | | 156,072 | | | | | | 134,967 | | | | | | 114,477 | | | | | | 96,833 | | |
Debt, including finance leases and other obligations
|
| | | | 158,464 | | | | | | 176,274 | | | | | | 165,757 | | | | | | 167,899 | | | | | | 195,802 | | |
Other liabilities, non-current
|
| | | | 17,048 | | | | | | 3,456 | | | | | | 18,822 | | | | | | 4,117 | | | | | | 2,655 | | |
Stockholders’ equity
|
| | | | 551,203 | | | | | | 512,877 | | | | | | 535,082 | | | | | | 505,684 | | | | | | 480,150 | | |
| | |
Six Months Ended
June 30, |
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Fiscal Year Ended December 31,
|
| | ||||||||||||||||||||||||||
(In thousands, except share and per share amounts)
|
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2019
|
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2018
|
| |
2019
|
| |
2018
|
| |
2017
|
| | |||||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |||||||||||
Consolidated Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | $ | 121,794 | | | | | $ | 133,882 | | | | | $ | 263,492 | | | | | $ | 266,391 | | | | | $ | 282,756 | | | | ||
Cost of revenues
|
| | | | 76,239 | | | | | | 90,053 | | | | | | 167,615 | | | | | | 172,354 | | | | | | 200,261 | | | | ||
Gross profit
|
| | | | 45,555 | | | | | | 43,829 | | | | | | 95,877 | | | | | | 94,037 | | | | | | 82,495 | | | | ||
|
| | |
Six Months Ended
June 30, |
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Fiscal Year Ended December 31,
|
| | ||||||||||||||||||||||||||
(In thousands, except share and per share amounts)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| |
2017
|
| | |||||||||||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development, net
|
| | | | 15,398 | | | | | | 15,920 | | | | | | 30,184 | | | | | | 33,023 | | | | | | 28,014 | | | | ||
Selling and marketing
|
| | | | 11,288 | | | | | | 11,716 | | | | | | 21,488 | | | | | | 22,706 | | | | | | 23,759 | | | | ||
General and administrative
|
| | | | 9,527 | | | | | | 8,389 | | | | | | 18,633 | | | | | | 17,024 | | | | | | 19,861 | | | | ||
Total operating expenses
|
| | | | 36,213 | | | | | | 36,025 | | | | | | 70,305 | | | | | | 72,753 | | | | | | 71,634 | | | | ||
Operating income
|
| | | | 9,342 | | | | | | 7,804 | | | | | | 25,572 | | | | | | 21,284 | | | | | | 10,861 | | | | ||
Financial expenses, net
|
| | | | (1,400) | | | | | | (2,188) | | | | | | (2,617) | | | | | | (4,298) | | | | | | (4,307) | | | | ||
Income before taxes on income
|
| | | | 7,942 | | | | | | 5,616 | | | | | | 22,955 | | | | | | 16,986 | | | | | | 6,554 | | | | ||
Taxes on income (tax benefit)
|
| | | | 1,713 | | | | | | 1,154 | | | | | | (13,583) | | | | | | (1,423) | | | | | | (247) | | | | ||
Income | | | | $ | 6,229 | | | | | $ | 4,462 | | | | | $ | 36,538 | | | | | $ | 18,409 | | | | | $ | 6,801 | | | | ||
Income per share (basic)
|
| | | $ | 0.11 | | | | | $ | 0.08 | | | | | $ | 0.66 | | | | | $ | 0.34 | | | | | $ | 0.12 | | | | ||
Income per share (diluted)
|
| | | $ | 0.11 | | | | | $ | 0.08 | | | | | $ | 0.65 | | | | | $ | 0.33 | | | | | $ | 0.12 | | | | ||
Weighted average number of shares used in computing earnings per share:
|
| | | | | | | |||||||||||||||||||||||||||
Basic
|
| | | | 55,262,453 | | | | | | 54,811,893 | | | | | | 55,368,703 | | | | | | 54,927,272 | | | | | | 54,680,822 | | | | ||
Diluted
|
| | | | 56,014,927 | | | | | | 55,614,782 | | | | | | 56,030,976 | | | | | | 55,752,642 | | | | | | 54,851,967 | | | | ||
Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Working capital
|
| | | $ | 86,406 | | | | | $ | 101,620 | | | | | $ | 102,529 | | | | | $ | 105,765 | | | | | $ | 92,035 | | | | ||
Total assets
|
| | | | 365,533 | | | | | | 371,810 | | | | | | 391,836 | | | | | | 394,747 | | | | | | 391,556 | | | | ||
Current maturities of long term loans
|
| | | | 4,325 | | | | | | 4,466 | | | | | | 4,096 | | | | | | 4,458 | | | | | | 4,479 | | | | ||
Long term loan, net of current maturities
|
| | | | 4,000 | | | | | | 8,333 | | | | | | 4,000 | | | | | | 8,098 | | | | | | 12,582 | | | | ||
Other long-term liabilities
|
| | | | 10,759 | | | | | | 8,084 | | | | | | 13,293 | | | | | | 7,229 | | | | | | 9,007 | | | | ||
Shareholders’ equity
|
| | | | 223,156 | | | | | | 223,143 | | | | | | 253,588 | | | | | | 239,072 | | | | | | 218,322 | | | |
(In thousands, except per share amounts)
|
| |
Six Months Ended
January 31, 2020 |
| |
Fiscal Year Ended
July 31, 2019 |
| ||||||
Condensed Combined Statement of Operations Data: | | | | | | | | | | | | | |
Net sales
|
| | | $ | 472,990 | | | | | $ | 923,931 | | |
Net income
|
| | | $ | 35,006 | | | | | $ | 25,188 | | |
Net income per share: | | | | | | | | | | | | | |
Basic
|
| | | $ | 1.19 | | | | | $ | 0.87 | | |
Diluted
|
| | | $ | 1.18 | | | | | $ | 0.87 | | |
(In thousands)
|
| |
As of
January 31, 2020 |
| |||
Condensed Combined Balance Sheet Data: | | | |||||
Cash and cash equivalents
|
| | | $ | 45,000 | | |
Total assets
|
| | | $ | 1,535,517 | | |
Working capital
|
| | | $ | 152,008 | | |
Debt, including finance leases and other obligations
|
| | | $ | 512,394 | | |
Other liabilities, non-current
|
| | | $ | 17,156 | | |
Stockholders’ equity
|
| | | $ | 628,247 | | |
| | |
Six months ended
January 31, 2020 |
| |
Fiscal year ended
July 31, 2019 |
| ||||||
COMTECH HISTORICAL DATA | | | | | | | | | | | | | |
Historical per share of common stock | | | | | | | | | | | | | |
Basic net income per share
|
| | | $ | 0.40 | | | | | $ | 1.04 | | |
Diluted net income per share
|
| | | $ | 0,40 | | | | | $ | 1.03 | | |
Book value per share (at period end)
|
| | | $ | 22.30 | | | | | $ | 22.07 | | |
| | |
Six months ended
December 31, 2019 |
| |
Twelve months ended
December 31, 2018 |
| ||||||
GILAT HISTORICAL DATA | | | | | | | | | | | | | |
Historical per ordinary share | | | | | | | | | | | | | |
Basic net income per share
|
| | | $ | 0.55 | | | | | $ | 0.34 | | |
Diluted net income per share
|
| | | $ | 0.54 | | | | | $ | 0.33 | | |
Book value per share (at period end)
|
| | | $ | 4.57 | | | | | $ | 4.33 | | |
| | |
Six months ended
January 31, 2020 |
| |
Fiscal year ended
July 31, 2019 |
| ||||||
COMTECH PRO FORMA COMBINED DATA | | | | | | | | | | | | | |
Unaudited pro forma per share of common stock | | | | | | | | | | | | | |
Basic net income per share
|
| | | $ | 1.19 | | | | | $ | 0.87 | | |
Diluted net income per share
|
| | | $ | 1.18 | | | | | $ | 0.87 | | |
Book value per share (at period end)
|
| | | $ | 21.34 | | | | | $ | 21.69 | | |
| | |
Six months ended
January 31, 2020 |
| |
Fiscal year ended
July 31, 2019 |
| ||||||
GILAT PRO FORMA EQUIVALENT DATA(1) | | | | | | | | | | | | | |
Unaudited pro forma per ordinary share | | | | | | | | | | | | | |
Basic net income per share
|
| | | $ | 0.10 | | | | | $ | 0.07 | | |
Diluted net income per share
|
| | | $ | 0.10 | | | | | $ | 0.07 | | |
Book value per share (at period end)
|
| | | $ | 1.80 | | | | | $ | 1.83 | | |
| | |
Gilat Shares
|
| |
Comtech
Common Stock |
| |
Equivalent
Per-Share Value |
| |||||||||||||||||||||||||||||||||||||||||||||
Date
|
| |
High
|
| |
Low
|
| |
Close
|
| |
High
|
| |
Low
|
| |
Close
|
| |
High
|
| |
Low
|
| |
Close
|
| |||||||||||||||||||||||||||
January 17, 2020
|
| | | $ | 9.68 | | | | | $ | 9.15 | | | | | $ | 9.15 | | | | | $ | 36.89 | | | | | $ | 36.19 | | | | | $ | 36.26 | | | | | $ | 10.29 | | | | | $ | 10.23 | | | | | $ | 10.23 | | |
January 28, 2020
|
| | | $ | 10.28 | | | | | $ | 10.05 | | | | | $ | 10.11 | | | | | $ | 37.34 | | | | | $ | 36.66 | | | | | $ | 37.10 | | | | | $ | 10.33 | | | | | $ | 10.27 | | | | | $ | 10.31 | | |
March 30, 2020
|
| | | $ | 7.49 | | | | | $ | 7.13 | | | | | $ | 7.43 | | | | | $ | 15.11 | | | | | $ | 14.01 | | | | | $ | 14.38 | | | | | $ | 8.45 | | | | | $ | 8.36 | | | | | $ | 8.39 | | |
Cash dividends per share
|
| |
Six Months
Ended January 31, 2020 |
| |
Twelve Months
Ended July 31, 2019 |
| ||||||
Comtech Historical(1)
|
| | | $ | 0.20 | | | | | $ | 0.40 | | |
Gilat Historical(2)
|
| | | | — | | | | | $ | 0.45 | | |
Comtech Pro Forma Combined
|
| | | $ | 0.20 | | | | | $ | 0.40 | | |
Gilat Pro Forma Equivalent
|
| | | $ | 0.02 | | | | | $ | 0.03 | | |
|
Implied Per Share Equity Value Reference Ranges Based On:
|
| |
Implied Per Share
Merger Consideration |
| ||||||
|
Base Case and
Upside Case CY2020E Adjusted EBITDA |
| |
Base Case
CY2021E Adjusted EBITDA |
| |
Upside Case
CY2021E Adjusted EBITDA |
| | | |
|
$9.05 – $10.65
|
| |
$7.99 – $9.64
|
| |
$8.80 – $10.66
|
| |
$10.31
|
|
Announced
|
| |
Acquiror
|
| |
Target
|
|
July 2019 | | |
•
Parsons Corporation
|
| |
•
QRC, LLC
|
|
June 2019 | | |
•
Insight Enterprises, Inc.
|
| |
•
PCM, Inc.
|
|
March 2019 | | |
•
Singapore Technologies Engineering (Europe) Ltd
|
| |
•
Newtec Group NV
|
|
April 2018 | | |
•
Affiliates of Searchlight Capital Partners, L.P.
|
| |
•
Mitel Networks Corporation
|
|
December 2017 | | |
•
Mercury Systems, Inc.
|
| |
•
Themis Computer
|
|
December 2017 | | |
•
TTM Technologies, Inc.
|
| |
•
Anaren, Inc.
|
|
July 2017 | | |
•
Mitel US Holdings, Inc.
|
| |
•
ShoreTel, Inc.
|
|
July 2017 | | |
•
Speedcast International Limited
|
| |
•
UltiSat, Inc.
|
|
March 2017 | | |
•
The KEYW Corporation
|
| |
•
Sotera Defense Solutions, Inc.
|
|
December 2016 | | |
•
Teledyne Technologies Incorporated
|
| |
•
e2v technologies plc
|
|
February 2016 | | |
•
J.F. Lehman & Company
|
| |
•
API Technologies Corp.
|
|
June 2015 | | |
•
Ultra Electronics Holdings plc
|
| |
•
Kratos Defense & Security Solutions, Inc. (electronic products division)
|
|
|
Implied Per Share Equity Value Reference Range
|
| |
Implied Per Share Merger Consideration
|
|
|
$9.71 – $11.02
|
| |
$10.31
|
|
|
Implied Per Share Equity Value Reference Ranges Based On:
|
| |
Implied Per Share
Merger Consideration |
| |||||||||
|
Base Case
|
| |
Upside Case
|
| | | | ||||||
|
Without NOLs
|
| |
With NOLs
|
| |
Without NOLs
|
| |
With NOLs
|
| | | |
|
$8.53 – $10.85
|
| |
$8.76 – $11.08
|
| |
$13.77 – $18.04
|
| |
$14.01 – $18.28
|
| |
$10.31
|
|
(in millions)
|
| |
2020E
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |||||||||||||||
Revenues
|
| | | $ | 302.2 | | | | | $ | 313.7 | | | | | $ | 321.0 | | | | | $ | 320.6 | | | | | $ | 332.2 | | |
Adjusted EBITDA(1)
|
| | | $ | 46.0 | | | | | $ | 47.2 | | | | | $ | 49.2 | | | | | $ | 50.9 | | | | | $ | 52.3 | | |
Unlevered Free Cash Flow(2)
|
| | | $ | 1.6 | | | | | $ | 34.3 | | | | | $ | 21.2 | | | | | $ | 25.6 | | | | | $ | 24.3 | | |
(in millions)
|
| |
2020E
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |||||||||||||||
Revenues
|
| | | $ | 302.2 | | | | | $ | 330.4 | | | | | $ | 346.9 | | | | | $ | 362.8 | | | | | $ | 387.2 | | |
Adjusted EBITDA(1)
|
| | | $ | 46.0 | | | | | $ | 53.3 | | | | | $ | 67.9 | | | | | $ | 79.4 | | | | | $ | 88.8 | | |
Unlevered Free Cash Flow(2)
|
| | | $ | 1.6 | | | | | $ | 33.8 | | | | | $ | 36.3 | | | | | $ | 47.6 | | | | | $ | 48.3 | | |
| | |
Comtech
January 31, 2020 |
| |
Gilat
December 31, 2019 |
| |
Pro Forma
Adjustments (See Note 6) |
| | | | |
Pro Forma
Combined (See Note 7) |
| ||||||||||||
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 46,471,000 | | | | | $ | 74,778,000 | | | | | $ | (76,249,000) | | | |
(A)
|
| | | $ | 45,000,000 | | |
Restricted cash
|
| | | | — | | | | | | 27,067,000 | | | | | | — | | | | | | | | | 27,067,000 | | |
Accounts receivable, net
|
| | | | 147,983,000 | | | | | | 71,429,000 | | | | | | (195,000) | | | |
(I)
|
| | | | 219,217,000 | | |
Inventories, net
|
| | | | 74,064,000 | | | | | | 27,203,000 | | | | | | — | | | | | | | | | 101,267,000 | | |
Prepaid expenses and other current assets
|
| | | | 21,052,000 | | | | | | 23,007,000 | | | | | | — | | | | | | | | | 44,059,000 | | |
Total current assets
|
| | | | 289,570,000 | | | | | | 223,484,000 | | | | | | (76,444,000) | | | | | | | | | 436,610,000 | | |
Property, plant and equipment, net
|
| | | | 27,390,000 | | | | | | 82,584,000 | | | | | | 35,000,000 | | | |
(B)
|
| | | | 144,974,000 | | |
Operating lease right-of-use assets, net
|
| | | | 33,062,000 | | | | | | 5,211,000 | | | | | | — | | | | | | | | | 38,273,000 | | |
Goodwill
|
| | | | 328,476,000 | | | | | | 43,468,000 | | | | | | 100,561,000 | | | |
(C)
|
| | | | 472,505,000 | | |
Intangibles with finite lives, net
|
| | | | 264,255,000 | | | | | | 1,523,000 | | | | | | 144,077,000 | | | |
(B)
|
| | | | 409,855,000 | | |
Deferred financing costs, net
|
| | | | 2,759,000 | | | | | | — | | | | | | 9,000,000 | | | |
(F)
|
| | | | 11,759,000 | | |
Severance pay funds
|
| | | | — | | | | | | 6,831,000 | | | | | | — | | | | | | | | | 6,831,000 | | |
Deferred tax assets, non-current
|
| | | | — | | | | | | 18,455,000 | | | | | | (18,455,000) | | | |
(G)
|
| | | | — | | |
Other assets, net
|
| | | | 4,430,000 | | | | | | 10,280,000 | | | | | | — | | | | | | | | | 14,710,000 | | |
Total assets
|
| | | $ | 949,942,000 | | | | | $ | 391,836,000 | | | | | $ | 193,739,000 | | | | | | | | $ | 1,535,517,000 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 27,250,000 | | | | | | 20,725,000 | | | | | | (195,000) | | | |
(I)
|
| | | $ | 47,780,000 | | |
Accrued expenses and other current liabilities
|
| | | | 84,511,000 | | | | | | 66,742,000 | | | | | | 6,882,000 | | | |
(F)
|
| | | | 158,135,000 | | |
Operating lease liabilities, current
|
| | | | 9,259,000 | | | | | | 1,977,000 | | | | | | — | | | | | | | | | 11,236,000 | | |
Finance lease and other obligations,
current |
| | | | 464,000 | | | | | | — | | | | | | — | | | | | | | | | 464,000 | | |
Dividends payable
|
| | | | 2,432,000 | | | | | | — | | | | | | — | | | | | | | | | 2,432,000 | | |
Contract liabilities
|
| | | | 38,929,000 | | | | | | 27,220,000 | | | | | | (1,594,000) | | | |
(B)
|
| | | | 64,555,000 | | |
Current portion of long-term debt
|
| | | | — | | | | | | 4,096,000 | | | | | | (4,096,000) | | | |
(A)
|
| | | | — | | |
Interest payable
|
| | | | 325,000 | | | | | | 195,000 | | | | | | (520,000) | | | |
(A)
|
| | | | — | | |
Total current liabilities
|
| | | | 163,170,000 | | | | | | 120,955,000 | | | | | | 477,000 | | | | | | | | | 284,602,000 | | |
Non-current portion of long-term debt
|
| | | | 158,000,000 | | | | | | 4,000,000 | | | | | | 349,930,000 | | | |
(A)
|
| | | | 511,930,000 | | |
Operating lease liabilities, non-current
|
| | | | 26,431,000 | | | | | | 3,258,000 | | | | | | — | | | | | | | | | 29,689,000 | | |
Income taxes payable
|
| | | | 2,874,000 | | | | | | — | | | | | | — | | | | | | | | | 2,874,000 | | |
Deferred tax liability, net
|
| | | | 18,758,000 | | | | | | — | | | | | | 19,876,000 | | | |
(G)
|
| | | | 38,634,000 | | |
Accrued severance pay
|
| | | | — | | | | | | 7,061,000 | | | | | | — | | | | | | | | | 7,061,000 | | |
Long-term contract liabilities
|
| | | | 12,458,000 | | | | | | 2,866,000 | | | | | | — | | | |
|
| | | | 15,324,000 | | |
Other liabilities
|
| | | | 17,048,000 | | | | | | 108,000 | | | | | | — | | | | | | | | | 17,156,000 | | |
Total liabilities
|
| | | | 398,739,000 | | | | | | 138,248,000 | | | | | | 370,283,000 | | | | | | | | | 907,270,000 | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | — | | |
Common stock
|
| | | | 3,975,000 | | | | | | 2,643,000 | | | | | | (2,171,000) | | | |
(H)
|
| | | | 4,447,000 | | |
Additional paid-in capital
|
| | | | 563,834,000 | | | | | | 927,348,000 | | | | | | (842,482,000) | | | |
(H)
|
| | | | 648,700,000 | | |
Retained earnings (accumulated deficit)
|
| | | | 425,243,000 | | | | | | (671,355,000) | | | | | | 663,061,000 | | | |
(H)
|
| | | | 416,949,000 | | |
Accumulated other comprehensive loss
|
| | | | — | | | | | | (5,048,000) | | | | | | 5,048,000 | | | |
(H)
|
| | | | — | | |
| | | | | 993,052,000 | | | | | | 253,588,000 | | | | | | (176,544,000) | | | | | | | | | 1,070,096,000 | | |
Less: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Treasury stock, at cost
|
| | | | (441,849,000) | | | | | | — | | | | | | — | | | | | | | | | (441,849,000) | | |
Total stockholders’ equity
|
| | | | 551,203,000 | | | | | | 253,588,000 | | | | | | (176,544,000) | | | | | | | | | 628,247,000 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 949,942,000 | | | | | $ | 391,836,000 | | | | | $ | 193,739,000 | | | | | | | | $ | 1,535,517,000 | | |
|
| | |
Six months ended:
|
| |
Pro Forma
Adjustments (See Note 6) |
| | | | |
Pro Forma
Combined (See Note 7) |
| |||||||||||||||
| | |
Comtech
January 31, 2020 |
| |
Gilat
December 31, 2019 |
| |||||||||||||||||||||
Net sales
|
| | | $ | 331,921,000 | | | | | $ | 141,698,000 | | | | | $ | (629,000) | | | |
(I)
|
| | | $ | 472,990,000 | | |
Cost of sales
|
| | | | 207,752,000 | | | | | | 91,376,000 | | | | | | (601,000) | | | |
(B,I)
|
| | | | 298,527,000 | | |
Gross profit
|
| | | | 124,169,000 | | | | | | 50,322,000 | | | | | | (28,000) | | | | | | | | | 174,463,000 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative
|
| | | | 61,225,000 | | | | | | 19,188,000 | | | | | | 143,000 | | | |
(B)
|
| | | | 80,556,000 | | |
Research and development, net of grants
|
| | | | 28,601,000 | | | | | | 14,786,000 | | | | | | 53,000 | | | |
(B)
|
| | | | 43,440,000 | | |
Amortization of intangibles . .
|
| | | | 10,435,000 | | | | | | — | | | | | | 3,524,000 | | | |
(B)
|
| | | | 13,959,000 | | |
Acquisition plan expenses
|
| | | | 8,414,000 | | | | | | 118,000 | | | | | | (5,019,000) | | | |
(F)
|
| | | | 3,513,000 | | |
| | | | | 108,675,000 | | | | | | 34,092,000 | | | | | | (1,299,000) | | | | | | | | | 141,468,000 | | |
Operating income
|
| | | | 15,494,000 | | | | | | 16,230,000 | | | | | | 1,271,000 | | | | | | | | | 32,995,000 | | |
Other expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | 3,420,000 | | | | | | 1,894,000 | | | | | | 9,311,000 | | | |
(D,E)
|
| | | | 14,625,000 | | |
Interest (income) and other . .
|
| | | | (71,000) | | | | | | (677,000) | | | | | | 194,000 | | | |
(J)
|
| | | | (554,000) | | |
Income before provision for (benefit from)
income taxes |
| | | | 12,145,000 | | | | | | 15,013,000 | | | | | | (8,234,000) | | | | | | | | | 18,924,000 | | |
Provision for (benefit from) income taxes
|
| | | | 2,262,000 | | | | | | (15,296,000) | | | | | | (3,048,000) | | | |
(K)
|
| | | | (16,082,000) | | |
Net income
|
| | | $ | 9,883,000 | | | | | $ | 30,309,000 | | | | | $ | (5,186,000) | | | | | | | | $ | 35,006,000 | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 0.40 | | | | | | | | | | | | | | | | | | | | $ | 1.19 | | |
Diluted . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 0.40 | | | | | | | | | | | | | | | | | | | | $ | 1.18 | | |
Weighted average number of common shares outstanding – basic . . . . . . . . .
|
| | | | 24,607,000 | | | | | | | | | | | | 4,723,000 | | | |
(H)
|
| | | | 29,330,000 | | |
Weighted average number of common and
common equivalent shares outstanding – diluted |
| | | | 24,904,000 | | | | | | | | | | | | 4,723,000 | | | |
(H)
|
| | | | 29,627,000 | | |
| | |
Twelve months ended:
|
| |
Pro Forma
Adjustments (See Note 6) |
| | | | |
Pro Forma
Combined (See Note 7) |
| |||||||||||||||
| | |
Comtech
July 31, 2019 |
| |
Gilat
June 30, 2019 |
| |||||||||||||||||||||
Net sales
|
| | | $ | 671,797,000 | | | | | $ | 254,303,000 | | | | | $ | (2,169,000) | | | |
(B,I)
|
| | | $ | 923,931,000 | | |
Cost of sales
|
| | | | 424,357,000 | | | | | | 158,540,000 | | | | | | (2,189,000) | | | |
(B,I)
|
| | | | 580,708,000 | | |
Gross profit
|
| | | | 247,440,000 | | | | | | 95,763,000 | | | | | | 20,000 | | | | | | | | | 343,223,000 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative
|
| | | | 128,639,000 | | | | | | 40,440,000 | | | | | | 286,000 | | | |
(B)
|
| | | | 169,365,000 | | |
Research and development, net of grants
|
| | | | 56,407,000 | | | | | | 32,501,000 | | | | | | 105,000 | | | |
(B)
|
| | | | 89,013,000 | | |
Amortization of intangibles
|
| | | | 18,320,000 | | | | | | — | | | | | | 7,047,000 | | | |
(B)
|
| | | | 25,367,000 | | |
Settlement of intellectual property litigation
|
| | | | (3,204,000) | | | | | | — | | | | | | — | | | | | | | | | (3,204,000) | | |
Acquisition plan expenses
|
| | | | 5,871,000 | | | | | | — | | | | | | — | | | | | | | | | 5,871,000 | | |
| | | | | 206,033,000 | | | | | | 72,941,000 | | | | | | 7,438,000 | | | | | | | | | 286,412,000 | | |
Operating income
|
| | | | 41,407,000 | | | | | | 22,822,000 | | | | | | (7,418,000) | | | | | | | | | 56,811,000 | | |
Other expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | 9,245,000 | | | | | | 4,224,000 | | | | | | 17,949,000 | | | |
(D,E)
|
| | | | 31,418,000 | | |
Write-off of deferred financing costs
|
| | | | 3,217,000 | | | | | | — | | | | | | — | | | | | | | | | 3,217,000 | | |
Interest (income) and other
|
| | | | 35,000 | | | | | | (714,000) | | | | | | 645,000 | | | |
(J)
|
| | | | (34,000) | | |
Income before provision for (benefit from) income taxes . . . . . . . . . . . .
|
| | | | 28,910,000 | | | | | | 19,312,000 | | | | | | (26,012,000) | | | | | | | | | 22,210,000 | | |
Provision for (benefit from) income taxes
|
| | | | 3,869,000 | | | | | | (864,000) | | | | | | (5,983,000) | | | |
(K)
|
| | | | (2,978,000) | | |
Net income
|
| | | $ | 25,041,000 | | | | | $ | 20,176,000 | | | | | $ | (20,029,000) | | | | | | | | $ | 25,188,000 | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 1.04 | | | | | | | | | | | | | | | | | | | | $ | 0.87 | | |
Diluted
|
| | | $ | 1.03 | | | | | | | | | | | | | | | | | | | | $ | 0.87 | | |
Weighted average number of common shares outstanding – basic
|
| | | | 24,124,000 | | | | | | | | | | | | 4,723,000 | | | |
(H)
|
| | | | 28,847,000 | | |
Weighted average number of common and common equivalent shares outstanding – diluted
|
| | | | 24,302,000 | | | | | | | | | | | | 4,723,000 | | | |
(H)
|
| | | | 29,025,000 | | |
| | |
Gilat Shares
|
| |
Preliminary Aggregate
Purchase Price |
| ||||||
Common stock outstanding
|
| | | | 55,493,000 | | | | | $ | 482,791,000 | | |
Net settlement of vested stock-based awards
|
| | | | 650,000 | | | | | | 5,657,000 | | |
Total
|
| | | | | | | | | $ | 488,448,000 | | |
Total cash consideration
|
| | | | | | | | | $ | 403,110,000 | | |
Total stock consideration
|
| | | | | | | | | | 85,338,000 | | |
| | | | | | | | | | $ | 488,448,000 | | |
Change in Stock Price
|
| |
Stock Price
|
| |
Estimated $ Value of the
Merger Consideration |
| |
Goodwill
|
| |||||||||
Increase of 25.0%
|
| | | $ | 22.59 | | | | | $ | 510,140,000 | | | | | $ | 156,327,000 | | |
Increase of 10.0%
|
| | | $ | 19.88 | | | | | $ | 497,010,000 | | | | | $ | 148,895,000 | | |
Decrease of 10.0%
|
| | | $ | 16.26 | | | | | $ | 479,885,000 | | | | | $ | 139,316,000 | | |
Decrease of 25.0%
|
| | | $ | 13.55 | | | | | $ | 466,755,000 | | | | | $ | 131,961,000 | | |
|
Total net book value of net assets at December 31, 2019
|
| | | $ | 253,588,000 | | | | ||
| Elimination of Gilat’s pre-existing goodwill and intangibles: | | | | | | | | | | |
|
Goodwill
|
| | | | (43,468,000) | | | | | |
|
Acquired intangibles, net
|
| | | | (1,523,000) | | | |
|
|
|
Net book value of net tangible assets at December 31, 2019
|
| | | | 208,597,000 | | | | | |
| | | | | | | | |
Estimated
Useful Life |
|
Preliminary estimated fair value adjustments to net book value of net tangible assets:
|
| | | | | | | | | |
Plant, property and equipment increase – Buildings
|
| | | | 24,500,000 | | | |
35 years
|
|
Plant, property and equipment increase – Land
|
| | | | 10,500,000 | | | |
Indefinite
|
|
Contract liability decrease
|
| | | | 1,594,000 | | | | | |
Accrued expenses and other current liabilities increase (see Note 6(F))
|
| | | | (6,882,000) | | | | | |
Deferred tax liabilities, net related to above adjustments
|
| | | | (6,002,000) | | | | | |
Preliminary estimated fair value of net tangible assets at December 31, 2019
|
| | | | 232,307,000 | | | | | |
Preliminary estimated fair value of identifiable intangibles: | | | | | | | | | | |
Intangible assets
|
| | | | 145,600,000 | | | |
22 years
|
|
Deferred tax liabilities related to newly acquired intangibles
|
| | | | (33,488,000) | | | | | |
Total estimated fair value of identifiable net assets at December 31, 2019
|
| | | | 344,419,000 | | | | | |
Goodwill
|
| | | | 144,029,000 | | | |
Indefinite
|
|
Total preliminary aggregate purchase price for accounting purposes
|
| | | $ | 488,448,000 | | | | | |
| | |
Gilat’s
Historical Values, Net |
| |
Preliminary
Estimated Fair Values |
| |
Pro Forma
Balance Sheet – Increase (Decrease) |
| |
Pro Forma
Six Month Income Statement – Incremental Benefit (Expense) |
| |
Pro Forma
Annual Income Statement – Incremental Benefit (Expense) |
| |||||||||||||||
Intangibles: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired intangibles
|
| | | $ | 1,523,000 | | | | | $ | 145,600,000 | | | | | $ | 144,077,000 | | | | | $ | (3,398,000) | | | | | $ | (5,912,000) | | |
Total
|
| | | $ | 1,523,000 | | | | | $ | 145,600,000 | | | | | $ | 144,077,000 | | | | | $ | (3,398,000) | | | | | $ | (5,912,000) | | |
Other: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Property, plant and equipment
|
| | | $ | 82,584,000 | | | | | $ | 117,584,000 | | | | | $ | 35,000,000 | | | | | $ | (350,000) | | | | | $ | (700,000) | | |
Contract liabilities
|
| | | | (30,086,000) | | | | | | (28,492,000) | | | | | | 1,594,000 | | | | | | — | | | | | | (806,000) | | |
Total
|
| | | $ | 52,498,000 | | | | | $ | 89,092,000 | | | | | $ | 36,594,000 | | | | | $ | (350,000) | | | | | $ | (1,506,000) | | |
Incremental expense
|
| | | | | | | | | | | | | | | | | | | | | $ | (3,748,000) | | | | | $ | (7,418,000) | | |
| Comtech: | | | | | | | |
|
Gilat Acquisition Related Credit Facility debt issuance costs
|
| | | $ | 9,000,000 | | |
|
Merger related retention bonuses and stock-based awards
|
| | | | 5,750,000 | | |
|
Other Merger related costs
|
| | | | 13,354,000 | | |
| | | | | $ | 28,104,000 | | |
| Gilat: | | | |||||
|
Other Merger related costs
|
| | | $ | 7,000,000 | | |
| | | | | $ | 7,000,000 | | |
|
Less merger related costs previously recorded by Comtech and Gilat as of January 31, 2020
|
| | | | (5,019,000) | | |
| | | | | $ | 30,085,000 | | |
| | |
Preliminary
Estimated Fair Value Adjustment |
| |
Deferred Tax
Asset (Liability), Non-Current |
| ||||||
Pro forma adjustments related to: | | | | | | | | | | | | | |
Gilat’s pre-existing goodwill
|
| | | $ | (43,468,000) | | | | | $ | — | | |
Gilat’s pre-existing intangibles
|
| | | | (1,523,000) | | | | | | — | | |
Fair value decrease to contract liabilities
|
| | | | 1,594,000 | | | | | | (367,000) | | |
Fair value of newly acquired goodwill
|
| | | | 144,029,000 | | | | | | — | | |
Fair value of newly acquired intangibles
|
| | | | 145,600,000 | | | | | | (33,488,000) | | |
Fair value of property, plant and equipment (buildings)
|
| | | | 24,500,000 | | | | | | (5,635,000) | | |
Fair value of property, plant and equipment (land)
|
| | | | 10,500,000 | | | | | | — | | |
Estimated merger related costs
|
| | | | 35,104,000 | | | | | | 1,159,000 | | |
Reclassification of Gilat’s deferred tax asset, non-current
|
| | | | — | | | | | | 18,455,000 | | |
Total | | | | | | | | | | $ | (19,876,000) | | |
|
Elimination of Gilat’s ordinary shares at December 31, 2019 . . . . . . . . . . . . . .
|
| | | $ | (2,643,000) | | |
|
Add: assumed issuance of 4,723,000 shares of Comtech’s common stock in connection with Gilat acquisition (par value $0.10 per share)
|
| | | | 472,000 | | |
|
Total net decrease to common stock
|
| | | $ | (2,171,000) | | |
|
Elimination of Gilat’s historical additional paid-in capital at December 31, 2019 .
|
| | | $ | (927,348,000) | | |
|
Add: increase in Comtech’s additional paid-in capital related to issuance of Comtech’s common stock
|
| | | | 84,866,000 | | |
|
Total net decrease to additional paid-in capital
|
| | | $ | (842,482,000) | | |
|
Elimination of Gilat’s historical accumulated deficit at December 31, 2019
|
| | | $ | 671,355,000 | | |
|
Less: Certain Comtech Merger related costs, net of tax (see Note 6(F))
|
| | | | (8,294,000) | | |
|
Total net increase to retained earnings
|
| | | $ | 663,061,000 | | |
|
Elimination of Gilat’s historical accumulated other comprehensive loss at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 5,048,000 | | |
Name
|
| |
Number of Shares
|
| |
Percent
|
| ||||||
FIMI Funds(1)
|
| | | | 18,801,865 | | | | | | 33.9% | | |
Mivtach Shamir Holdings Ltd.(2)
|
| | | | 5,375,647 | | | | | | 9.7% | | |
Renaissance Technologies LLC(3)
|
| | | | 2,957,417 | | | | | | 5.3% | | |
All directors and executive officers as a group (16 persons)(4)
|
| | | | 2,145,728 | | | | | | 3.8% | | |
| | |
High
|
| |
Low
|
| |
Dividend
Paid (per share) |
| |||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |||||||||
Quarter ended April 30, 2017
|
| | | | 15.25 | | | | | | 10.53 | | | | | | 0.10 | | |
Quarter ended July 31, 2017
|
| | | | 19.80 | | | | | | 13.75 | | | | | | 0.10 | | |
Quarter ended October 31, 2017
|
| | | | 22.90 | | | | | | 17.11 | | | | | | 0.10 | | |
Quarter ended January 31, 2018
|
| | | | 23.90 | | | | | | 19.30 | | | | | | 0.10 | | |
Quarter ended April 30, 2018
|
| | | | 32.94 | | | | | | 20.62 | | | | | | 0.10 | | |
Quarter ended July 31, 2018
|
| | | | 35.38 | | | | | | 29.36 | | | | | | 0.10 | | |
Quarter ended October 31, 2018
|
| | | | 36.94 | | | | | | 27.15 | | | | | | 0.10 | | |
Quarter ended January 31, 2019
|
| | | | 30.43 | | | | | | 22.80 | | | | | | 0.10 | | |
Quarter ended April 30, 2019
|
| | | | 27.50 | | | | | | 20.94 | | | | | | 0.10 | | |
Quarter ended July 31, 2019
|
| | | | 30.29 | | | | | | 20.98 | | | | | | 0.10 | | |
Quarter ended October 31, 2019
|
| | | | 36.61 | | | | | | 26.27 | | | | | | 0.10 | | |
Quarter ended January 31, 2020
|
| | | | 38.00 | | | | | | 28.50 | | | | | | 0.10 | | |
Quarter ended April 30, 2020 (through March 30, 2020)
|
| | | | 35.35 | | | | | | 12.45 | | | | | | 0.10 | | |
| | |
Nasdaq
|
| |
TASE
|
| | |||||||||||||||||||||||
| | |
High
|
| |
Low
|
| |
High
|
| |
Low
|
| |
Dividend
Paid (per share) |
| |||||||||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |||||||||||||||
Quarter ended June 30, 2017
|
| | | | 5.47 | | | | | | 4.12 | | | | | | 5.43 | | | | | | 4.09 | | | | | | — | | |
Quarter ended September 30, 2017
|
| | | | 6.20 | | | | | | 5.22 | | | | | | 6.24 | | | | | | 5.03 | | | | | | — | | |
Quarter ended December 31, 2017
|
| | | | 7.90 | | | | | | 5.99 | | | | | | 8.04 | | | | | | 5.87 | | | | | | — | | |
Quarter ended March 31, 2018
|
| | | | 9.22 | | | | | | 7.36 | | | | | | 9.34 | | | | | | 7.37 | | | | | | — | | |
Quarter ended June 30, 2018
|
| | | | 9.30 | | | | | | 7.54 | | | | | | 9.29 | | | | | | 7.49 | | | | | | — | | |
Quarter ended September 30, 2018
|
| | | | 9.34 | | | | | | 8.26 | | | | | | 9.34 | | | | | | 8.13 | | | | | | — | | |
Quarter ended December 31, 2018
|
| | | | 10.74 | | | | | | 7.94 | | | | | | 10.82 | | | | | | 7.86 | | | | | | — | | |
Quarter ended March 31, 2019
|
| | | | 9.87 | | | | | | 8.05 | | | | | | 9.98 | | | | | | 8.13 | | | | | | — | | |
Quarter ended June 30, 2019
|
| | | | 9.10 | | | | | | 8.05 | | | | | | 9.27 | | | | | | 7.92 | | | | | | 0.45 | | |
Quarter ended September 30, 2019
|
| | | | 8.95 | | | | | | 7.60 | | | | | | 8.98 | | | | | | 7.49 | | | | | | — | | |
Quarter ended December 31, 2019
|
| | | | 8.75 | | | | | | 7.32 | | | | | | 8.72 | | | | | | 7.31 | | | | | | — | | |
Quarter ended March 31, 2020 (through March 30, 2020)
|
| | | | 10.76 | | | | | | 4.70 | | | | | | 10.42 | | | | | | 4.66 | | | | | | — | | |
| | |
Gilat
Closing Price |
| |
Comtech
Closing Price |
| |
Estimated
Value of the Merger Consideration Per Share |
| |||||||||
January 28, 2020
|
| | | $ | 10.11 | | | | | $ | 37.10 | | | | | $ | 10.31 | | |
March 30, 2020
|
| | | $ | 7.43 | | | | | $ | 14.38 | | | | | $ | 8.39 | | |
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
Outstanding Capital Stock
|
| | Gilat has outstanding one class of share capital — ordinary shares, NIS 0.20 par value per share Holders of Gilat Shares are entitled to all the rights and obligations provided to ordinary shareholders under the ICL and Gilat’s Articles of Association. | | | Comtech has outstanding one class of common stock, $0.10 par value per share. Holders of Comtech Common Stock are entitled to all the rights and obligations provided to common stockholders under the DGCL, the Comtech Charter Documents and the Comtech Bylaws. | |
Authorized Capital
|
| | Gilat’s authorized share capital consists of NIS 18,000,000 divided into 90,000,000 ordinary shares, nominal value NIS 0.20 per share. | | |
The Comtech Charter authorizes 100,000,000 shares of Comtech Common Stock, and 2,000,000 shares of preferred stock, $0.10 per value per share.
Comtech has designated 200,000 shares of Comtech’s preferred stock as Series A Junior Participating Cumulative Preferred Stock, none of which are outstanding.
As of the date of this proxy statement/prospectus, Comtech does not have outstanding any shares of preferred stock.
|
|
Preferred Stock
|
| | Gilat may, from time to time, if approved by the holders of a majority of the voting power represented at the general meeting of the Gilat shareholders in person or by proxy and voting thereon, provide for shares with such preferred or deferred rights or rights of redemption or other special rights and/or such restrictions, whether in regard to dividends, voting, repayment of share capital or otherwise. However, pursuant to the TASE rules, Gilat is generally not permitted to issue any preferred shares, other than, subject to certain conditions, preferred shares which confer certain preferred rights in regard to dividends, so long as the Gilat Shares are listed on the TASE. | | | Under the Comtech Charter, the Comtech Board has the authority, without stockholder approval, to designate one or more series of preferred stock, to issue shares of preferred stock in such series up to the maximum number of shares of the relevant series of preferred stock authorized, and to determine the preferences, rights, privileges, qualifications, restrictions and limitations of any such series, including the number of shares constituting any such series and the designation of such series, dividend rights, voting rights, the rights and terms of conversion, the rights and terms of redemption, the terms of any sinking fund, retirement fund or purchase fund to be provided with such series and liquidation preferences. Acting under this authority, the Comtech Board could designate and issue a series of preferred stock with preferences, rights, privileges, qualifications, restrictions or limitations, and adopt a stockholder rights plan, having the effect of discriminating against an existing or prospective holder of securities as a result of such stockholder beneficially owning or commencing a tender offer for a substantial | |
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
| | | | | |
amount of Comtech Common Stock. One of the effects of authorized but unissued and unreserved shares of capital stock may be to render more difficult or discourage an attempt by a potential acquirer to obtain control of Comtech by means
of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of Comtech’s management. The issuance of such shares of capital stock may have the effect of delaying, deferring or preventing a change in control of
Comtech without any further action by Comtech’s stockholders. Comtech has no present intention to adopt a stockholder rights plan, but could do so without stockholder approval at any future time.
If Comtech lists its Common Stock on the TASE, it will generally not be permitted to issue any shares of Preferred Stock, other than, subject to certain conditions, Preferred Stock which confer certain preferred
rights in regard to dividends, for so long as the Comtech Common Stock is listed on the TASE.
|
|
Voting Rights
|
| |
Holders of Gilat Shares have one vote for each Gilat Share held on all matters submitted to a vote of shareholders.
Holders of Gilat Shares do not have cumulative voting rights.
|
| |
The Comtech Charter provides that each stockholder of record of Comtech Common Stock is entitled to one vote for each share held by the stockholders on all matters voted upon by the stockholders.
Holders of Comtech Common Stock do not have cumulative voting rights.
|
|
Stock Transfer Restrictions Applicable to Stockholders
|
| |
None.
|
| |
None.
|
|
Dividends
|
| |
Generally, pursuant to the ICL, the decision to distribute dividends and the amount to be distributed, whether interim or final, is made by the board of directors. Accordingly, pursuant to Gilat’s Articles of Association, the Gilat Board
has the authority to determine the amount and time for payment of interim dividends and final dividends.
Under the ICL, dividends may be paid only out of a company’s net profits for the two years preceding the distribution of the dividends, or from accumulated retained earnings, calculated in the manner prescribed in
the ICL. Pursuant to the ICL in any distribution of dividends, the Gilat Board is required to determine that there is no reasonable concern that the distribution of dividends will prevent Gilat from meeting its existing and foreseeable
|
| | Under Delaware law, the Comtech Board may declare and pay dividends out of (1) surplus of Comtech which is defined as net assets less statutory capital or (2) if no surplus exists, out of the net profits of Comtech for the year in which the dividend is declared and/or the preceding year; provided, however, that if the capital of Comtech has been diminished to an amount less than the aggregate amount of capital represented by the issued and outstanding stock of all classes having preference upon the distribution of assets, the Comtech Board may not declare and pay dividends out of Comtech’s net profits until the deficiency in the capital has been repaired. | |
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
| | |
obligations as they become due. Gilat’s Articles of Association provide that no dividends shall be paid otherwise than out of Gilat’s profits and that any such dividend shall carry no interest. In addition, upon the recommendation of the
Gilat Board, approved by the shareholders, Gilat may cause dividends to be paid in kind.
The Gilat shareholders have the right to share in the profits distributed as a dividend and any other permitted distribution, if any.
|
| | | |
Number of Directors
|
| |
Under Gilat’s Articles of Association, the Gilat Board shall consist of not less than five and not more than nine directors as shall be determined from time to time by a majority vote at the general meeting of the Gilat shareholders.
The Gilat shareholders have resolved that the Gilat Board shall consist of a total of eight directors, including two external directors.
|
| |
The Comtech Charter provides that the number of directors which constitute the entire Comtech Board may be not less than three, the exact number to be fixed from time to time exclusively by the Comtech Board pursuant to a resolution duly
adopted by a majority of the entire Comtech Board.
There are currently six directors serving on the Comtech Board divided into three classes, with each class holding office for staggered three-year terms.
|
|
Election of Directors
|
| |
Gilat’s Articles of Association provide that each beneficial owner of 14% or more of the issued and outstanding Gilat Shares shall be entitled to appoint, at each annual general meeting of the Gilat shareholders, one member to the Gilat
Board referred to as an “Appointed Director”, provided that a total of not more than four Appointed Directors are so appointed. In the event more than four such qualifying beneficial owners notify us that they desire to appoint an Appointed
Director, only the four shareholders beneficially owning the greatest number of shares shall each be entitled to appoint an Appointed Director.
Under Gilat’s Articles of Association, so long as the Gilat Shares are listed for trading on Nasdaq, Gilat may require that any Appointed Director qualify as an “independent director” as provided for in the Nasdaq
rules then in effect. In addition, in no event may a person become an Appointed Director unless such person does not, at the time of appointment, and did not, within two years prior thereto, engage, directly or indirectly, in any activity
which competes with Gilat, whether as a director, officer, employee, contractor, consultant, partner or otherwise.
Under Gilat’s Articles of Association, the annual general meeting of the Gilat shareholders, by the vote of the holders of a
|
| |
The Comtech Bylaws provide that a nominee for director shall be elected to the Comtech Board if the votes cast for the nominee’s election exceed the votes cast against the nominee’s election (with “abstentions” and “broker non-votes” not
counted as a vote cast either “for” or “against” that director’s election); provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for which (i) the Secretary of Comtech receives a
notice that a stockholder has nominated a person for election to the Comtech Board in compliance with the advance notice requirements for stockholder nominees for director set forth in the Comtech Bylaws and (ii) the nomination has not been
withdrawn by the stockholder on or before the tenth day before Comtech first mails its notice of meeting for the meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders shall not be
permitted to vote against a nominee.
Pursuant to the Comtech Charter, the Comtech Board is divided into three classes, each to be as nearly equal in number as possible. Members of the Comtech Board are elected for three-year terms, with the term of
office of one class expiring at each annual meeting of Comtech’s stockholders.
|
|
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
| | |
majority of the voting power represented at such meeting in person or by proxy, will elect the remaining members of the Gilat Board (other than External Directors). At any annual general meeting at which Appointed Directors are appointed
as set forth above, the calculation of the vote of any beneficial owner who appointed a director pursuant to the preceding paragraph shall not take into consideration, for the purpose of electing the remaining directors, ordinary shares
constituting 14% of the issued and outstanding Gilat Shares held by such appointing beneficial owner.
Currently, no shareholder beneficially holding 14% or more of the issued and outstanding Gilat Shares has exercised its right to appoint an Appointed Director.
In accordance with the ICL and the relevant regulations, Gilat must also have at least two External Directors who meet the statutory requirements of independence. An External Director serves for a term of
three years, which may be extended for additional three-year terms. An External Director can be removed from office only under very limited circumstances. All of the External Directors must serve on our Audit Committee and Compensation
Committee (including one External Director serving as the chair of such committees), and at least one External Director must serve on each committee of the Gilat Board.
|
| | A director shall hold office until the annual stockholders’ meeting for the year in which the director’s term expires and until the director’s successor is elected and qualified. | |
Removal of Directors
|
| | Gilat’s Articles of Association further provide that the affirmative vote of a majority of the shares then represented at a general meeting of shareholders shall be entitled to remove director(s) other than Appointed Directors from office (unless pursuant to circumstances or events prescribed under the ICL), to elect directors instead of directors so removed or to fill any vacancy, however created, in the Gilat Board. Subject to the foregoing and to early resignation or ipso facto termination of office as provided in Gilat’s Articles of Association, each director shall serve until the adjournment of the annual general meeting following the general meeting at which such director was elected. | | | The Comtech Charter provides that any or all of the directors may be removed for cause by the stockholders or by the Comtech Board. | |
Vacancies of the Board of Directors
|
| | The Gilat directors may, at any time and from time to time, appoint a director to temporarily fill a vacancy on the Gilat Board or in their body (subject to the maximum number of directors in the Gilat Board as set forth above), except that if the | | | The Comtech Charter provides that in case of any increase in the number of directors or any vacancy in any class or classes the additional directorships or vacancies may be filled by a majority of the directors then in office, though less than a quorum, and | |
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
| | | number of directors then in office constitutes less than a majority of the number of directors set by the shareholders, as mentioned above, they may only act in an emergency, or to fill the vacancy up to the minimum number required to effect corporate action or in order to call a general meeting for the purpose of electing directors. | | | any director so elected shall hold office until the next annual meeting of stockholders, and until his successor shall have been elected and qualified. | |
Action by Written Consent
|
| | The ICL prohibits shareholder action of a public company by written consent | | | The Comtech Charter prohibits stockholder action by written consent. | |
Advance Notice Requirements for Stockholder Nominations and Other Proposals
|
| | Pursuant to the ICL and the regulations thereunder, the holder(s) of at least 1% of Gilat’s voting rights may propose any matter appropriate for deliberation at a Gilat shareholder meeting to be included on the agenda of a Gilat shareholder meeting, including nomination of candidates for directors, generally by submitting a proposal within seven days of publicizing the convening of a Gilat shareholder meeting, or, if Gilat publishes a preliminary notice at least 21 days prior to publicizing the convening of a Gilat shareholder meeting stating its intention to convene such meeting and the agenda thereof, within 14 days of such preliminary notice. Any such proposal must further comply with the information requirements under applicable law. | | |
Annual Meetings
The Comtech Bylaws provide that nominations of persons for election to the Comtech Board may be made at an annual meeting of stockholders (a) pursuant to Comtech’s notice of meeting (or any supplement thereto),
(b) by or at the direction of the Comtech Board or (c) by or on behalf of a stockholder of Comtech, or a duly authorized proxy for such stockholder, who is a stockholder of record at the time of giving of notice, who is entitled to vote for
the election of directors at the meeting and who complies with the notice procedures set forth in the Comtech Bylaws. For any nominations to be properly brought before an annual meeting by a stockholder, the stockholder must have given
timely notice in writing to the Secretary of Comtech. To be timely, a stockholder’s notice must be delivered or mailed to and received at the principal executive offices of Comtech not fewer than 90 days nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event the annual meeting with respect to which such notice is to be tendered is not held within 30 days before or after such
anniversary date, notice by the stockholder to be timely must be received not earlier than 90 days prior to such annual meeting and not later than 60 days prior to the annual meeting. The stockholder’s notice must set forth:
(a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including the person’s written consent to being named in the proxy statement as a
|
|
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
Notice of Stockholder Meeting
|
| | Pursuant to the ICL and the regulations thereunder, Gilat shareholder meetings generally require prior notice of not less than 21 days and, for certain matters specified in the ICL, not less than 35 days. | | | Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws or under other portions of Delaware law, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than 10 nor more than 60 days before the date of the meeting and must specify the place, if any, date, hour, means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes of the meeting. | |
Amendments to Charter Documents
|
| | Gilat’s Articles of Association provide that all Gilat shareholder resolutions generally require only a simple majority of the votes cast, other than certain matters that by law require a different majority. | | |
Under Delaware law, Comtech may amend the Comtech Charter, from time to time, in any and as many respects as may be desired, so long as the Comtech Charter as amended would contain only such provisions as it would be lawful and proper to
insert in an original certificate of incorporation filed at the time of the filing of the amendment; and, if a change in stock or the rights of stockholders, or an exchange, reclassification, subdivision, combination or cancellation of
stock or rights of stockholders is to be made, such provisions as may be necessary to effect such change, exchange, reclassification, subdivision, combination or cancellation.
The Comtech Bylaws provide that the Comtech Board has the power to adopt, alter and repeal the Comtech Bylaws at any regular or special meeting of the Comtech Board, subject to the power of the stockholders to
alter or repeal any Bylaw adopted or altered by the Comtech Board.
The Comtech Bylaws may also be adopted, altered or repealed by the stockholders by the vote of the holders of a majority of the outstanding shares entitled to vote thereon provided that notice of the proposed
adoption, alteration or repeal shall have been given in the notice of such meeting of stockholders.
|
|
| | |
GILAT SATELLITE NETWORKS LTD.
|
| |
COMTECH
TELECOMMUNICATIONS CORP. |
|
Special Meeting of Stockholders
|
| | The ICL provides that a special meeting of shareholders must be called by the board of directors upon the written request of (i) two directors, (ii) one-fourth of the serving directors, (iii) one or more shareholders who hold(s) at least five percent of the issued share capital and at least one percent of the voting power of Gilat, or (iv) one or more shareholders who have at least five percent of the voting power of Gilat. Within 21 days of receipt of such request, the board of directors is required to convene the special meeting for a time no later than 35 days after notice is given to the shareholders. Gilat’s Articles of Association provide that the Gilat Board may call a special meeting of the shareholders at any time and shall be obligated to call a special meeting as specified above. | | |
The Comtech Bylaws provide that special meetings may be called only by the Comtech Board, the Chairman of the Comtech Board or by any officer instructed by the Comtech Board to call the meetings.
Business transacted at special meetings are confined to the purpose or purposes stated in the notice of the meeting.
|
|
Quorum
|
| | Under Gilat’s Articles of Association, the required quorum for any general meeting of shareholders and for any class meeting is two or more shareholders present in person or by proxy and holding at least twenty- five percent (25%) of the issued shares (or of the issued shares of such class in the event of a class meeting). The required quorum in a meeting that was adjourned because a quorum was not present, shall be two shareholders present in person or by proxy. Under Gilat’s Articles of Association, if the original meeting was called as a special meeting, the quorum in the adjourned meeting shall be one or more shareholders, present in person or by proxy and holding the number of shares required to call such a meeting. | | | The Comtech Bylaws provide that the holders of a majority of the issued and outstanding shares of Comtech’s capital stock entitled to vote at the meeting, present in person or represented by proxy, constitute a quorum. | |
Repurchases / Redemptions of Shares
|
| |
Under the ICL, the repurchase of shares is required to comply with the applicable requirements that apply to dividends.
Israeli law limits the distribution of dividends to the greater of retained earnings or earnings generated over the two most recent years, in either case provided that Gilat reasonably believes that the dividend
will not render it unable to meet its current or foreseeable obligations when due Notwithstanding the foregoing, dividends may be paid with the approval of a court, provided that there is no reasonable concern that such dividend
distribution will prevent Gilat from satisfying its current and foreseeable obligations, as they become due.
|
| |
Under Delaware law, Comtech may purchase, redeem and dispose of its own shares, except that it may not purchase or redeem its shares if the capital of Comtech is impaired or would become impaired as a result of the redemption.
However, at any time, Comtech may purchase or redeem any of its shares that are entitled upon any distribution of assets to a preference over another class of its stock or, if no shares entitled to such a
preference are outstanding, any of its own shares, if these shares will be retired upon acquisition or redemption, thereby reducing the capital of Comtech.
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GILAT SATELLITE NETWORKS LTD.
|
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COMTECH
TELECOMMUNICATIONS CORP. |
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Exemption and Limitation of Personal Liability of Directors and Officers
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| |
Under the ICL, a company may not exempt an office holder from liability with respect to a breach of his or her fiduciary duty, but may exempt in advance an office holder from his or liability to the company, in whole or in part, with
respect to a breach of his duty of care. However, a company may not exculpate in advance a director from his or her liability to the company with respect to a breach of his duty of care in connection with distributions (as defined in the
ICL). Gilat’s Articles of Association allow it to exempt any office holder to the maximum extent permitted by law, before or after the occurrence giving rise to such exemption.
Gilat has provided its directors and officers with letters providing them with exemption to the fullest extent permitted under Israeli law (except that Gilat is not required to exempt its directors and officers
from liability for damages caused as a result of a breach of the office holder’s duty of care in transactions in which a controlling shareholder or an office holder has a personal interest).
|
| | The Comtech Charter provides that no Comtech director may be personally liable to Comtech or its stockholders for monetary damages for breach of fiduciary duty as a director, except that, directors may be liable (i) for any breach of the director’s duty of loyalty to Comtech or stockholders, (ii) for acts or omissions of the director not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. | |
Indemnification of Directors and Officers
|
| | Pursuant to the ICL, a company may indemnify an office holder against: (i) a financial obligation imposed on him in favor of another person by a court judgment, including a compromise judgment or an arbitrator’s award approved by court; (ii) reasonable litigation expenses, including attorney’s fees, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent; and (iii) expenses, including reasonable litigation expenses and legal fees, incurred by an office holder as a result of a proceeding instituted against such office holder in relation to (A) infringements that may impose financial sanction pursuant to the provisions of Chapter H’3 under the Securities Law, or (B) administrative infringements pursuant to the provisions of Chapter H’4 under the Securities Law, or | | |
As permitted by Delaware law, the Comtech Charter contains a provision that eliminates the personal liability of the directors to Comtech and Comtech’s stockholders for monetary damages for breaches of fiduciary duties as directors,
except that such provision does not apply to any breach that involves:
•
a breach of a director’s duty of loyalty to Comtech;
•
any act or omission not in good faith or which involves intentional misconduct or a knowing violation of law;
•
a transaction from which the director derives an improper personal benefit; or
•
the payment of dividends or the approval of stock repurchases or redemptions that are unlawful under the DGCL.
The Comtech Bylaws provide that Comtech shall indemnify (a) any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the right of Comtech) by reason of the fact
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GILAT SATELLITE NETWORKS LTD.
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| |
COMTECH
TELECOMMUNICATIONS CORP. |
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(C) infringements pursuant to the provisions of Chapter I’1 under the Securities Law.
The indemnification of an office holder must be expressly permitted in the articles of association, under which the company may (i) undertake in advance to indemnify its office holders with respect to certain
types of events that can be foreseen at the time of giving such undertaking and up to an amount determined by the board of directors to be reasonable under the circumstances, or (ii) provide indemnification retroactively in amounts deemed
to be reasonable by the board of directors.
A company may also procure insurance for an office holder’s liability in consequence of an act performed in the scope of his office, in the following cases: (i) a breach of the duty of care of such office holder,
(ii) a breach of fiduciary duty, only if the office holder acted in good faith and had reasonable grounds to believe that such act would not be detrimental to the company, or (iii) a monetary obligation imposed on the office holder for the
benefit of another person. Subject to the provisions of the ICL and the Securities Law, a company may also enter into a contract for procurement of insurance for an office holder for (a) expenses, including reasonable litigation expenses
and legal fees, incurred by the office holder as a result of a proceeding instituted against such office holder in relation to (A) infringements that may impose financial sanction pursuant to the provisions of Chapter H’3 under the
Securities Law or (B) administrative infringements pursuant to the provisions of Chapter H’4 under the Securities Law or (C) infringements pursuant to the provisions of Chapter I’1 under the Securities Law and (b) payments made to the
injured parties of such infringement under Section 52ND(a)(1)(a) of the Securities Law.
A company may not indemnify an office holder against, nor enter into an insurance contract which would provide coverage for, any monetary liability incurred as a result of any of the following: (a) a breach by the
office holder of his fiduciary duty unless the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; (b) a
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| |
that the person is or was one of Comtech’s directors, officers or employees, or is or was serving at Comtech’s request as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with such action, suit or proceeding, provided such person acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, Comtech’s best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was illegal, and (b) any person
who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by Comtech or in Comtech’s name to procure a judgment in its favor by reason of the fact that the person is or was one of
Comtech’s directors, officers or employees, or is or was serving at Comtech’s request as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’
fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, Comtech’s
best interests and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to
Comtech unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the issuer pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the SEC such indemnification is against public
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GILAT SATELLITE NETWORKS LTD.
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COMTECH
TELECOMMUNICATIONS CORP. |
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| | |
breach by the office holder of his duty of care if such breach was performed intentionally or recklessly; (c) any act or omission carried out with the intent to derive an illegal personal gain; or (d) any fine or penalty levied against
the office holder as a result of a criminal offense.
Gilat’s Articles of Association provides that it may indemnify any office holder, to the maximum extent permitted by law, against any liabilities he or she may incur in such capacity, limited with respect (i) to
the categories of events that can be foreseen in advance by the Gilat Board when authorizing such undertaking and (ii) to the amount of such indemnification as determined retroactively by the Gilat Board to be reasonable in the particular
circumstances. Similarly, Gilat may also agree to indemnify an office holder for past occurrences, whether or not we are obligated under any agreement to provide such indemnification. Gilat’s Articles of Association also allow it to procure
insurance covering any past or present officer holder against any liability which he or she may incur in such capacity, to the maximum extent permitted by law. Such insurance may also cover the company for indemnifying such office holder.
Gilat has obtained directors’ and officers’ liability insurance covering its officers and directors and those of its subsidiaries for claims. In addition, Gilat has provided its directors and officers with letters providing them with
indemnification to the fullest extent permitted under Israeli law.
|
| | policy as expressed in the Securities Act and is, therefore, unenforceable. | |
Certain Business Combination Restrictions
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| |
The ICL provides that an acquisition of shares in a public company, such as ours, must be made by means of a tender offer, if, as a result of the acquisition, the purchaser would become a holder of 25% or more of the voting rights in the
company. This rule does not apply if there is already another holder of 25% percent of the voting rights. Similarly, the ICL provides that an acquisition of the shares must be made by means of a tender offer, if, as a result of the
acquisition, a person would become a holder of 45% of the voting rights in the company, unless there is another person holding at that time more than 45% of the voting rights of the company.
The ICL provides for mergers between Israeli companies, if each party to the transaction obtains the appropriate
|
| | Comtech is subject to the provisions of Section 203 of the DGCL, an anti-takeover law. In general, this statute provides that, except in certain limited circumstances, a corporation shall not engage in any “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, for purposes of Section 203 of the DGCL, an “interested stockholder” is a person who, together with affiliates, owns, or within three years did own, 15% or more | |
| | |
GILAT SATELLITE NETWORKS LTD.
|
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COMTECH
TELECOMMUNICATIONS CORP. |
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approval of its board of directors and shareholders. For purposes of the shareholder vote of each merging entity, unless a court rules otherwise, the merger requires the approval of a majority of the shares of that entity that are not
held by the other entity or are not held by any person who holds 25% or more of the shares or the right to appoint 25% or more of the directors of the other entity. Gilat’s Articles of Association provide that a merger requires the approval
of the holders of a majority of the shares voting thereon.
Upon the request of a creditor of either party to the proposed merger, a court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger, the surviving
company will be unable to satisfy the obligations of any of the parties of the merger to their creditors.
A merger may not be completed unless at least 50 days have passed from the date that a proposal of the merger was filed with the Israeli Companies Registrar by each merging company and 30 days from the date that
shareholder approval of both merging companies was obtained. The merger proposal may be filed once a shareholder meeting has been called to approve the merger.
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| | of the corporation’s voting stock. This provision could have the effect of delaying or preventing a change in control of Comtech. | |
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Term
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| |
Section Reference
|
|
102 Amounts | | | 2.8(d)(i) | |
104H Tax Ruling | | | 6.18(c) | |
Acceptable Confidentiality Agreement | | | 6.01(b) | |
Agreement | | | Preamble | |
Alternative Acquisition Agreement | | | 6.01(b) | |
Anti-Bribery Laws | | | 3.24 | |
Approval | | | 6.7(a) | |
Assumed RSU | | | 6.14(a) | |
Bankruptcy and Equity Exceptions | | | 3.3(a) | |
Cancelled Option | | | 6.14(b)(i) | |
Cash Merger Consideration | | | Recitals | |
Certificate of Merger | | | 2.2 | |
Certificates | | | 2.8(c)(i) | |
Charter Documents | | | 3.1 | |
Closing | | | 2.3 | |
Closing Date | | | 2.3 | |
Collective Bargaining Agreements | | | 3.18(a) | |
Commitment Letter | | | 4.8(b) | |
Companies Registrar | | | 2.2 | |
Company | | | Preamble | |
Company 102 Compensatory Awards | | | 2.8(d)(i) | |
Company 102 Shares | | | 2.8(b) | |
Company 401(k) Plan | | | 6.15(e) | |
Company Board | | | Recitals | |
Company Board Recommendation | | | Recitals | |
Company Financial Advisors | | | 3.28 | |
Company Financial Statements | | | 3.7(a) | |
Company Form 20-F | | | Article III | |
Company SEC Reports | | | 3.6(a) | |
Company Securities | | | 3.4(d) | |
Company Share | | | Recitals | |
Company Shareholders’ Meeting | | | 6.3 | |
Confidentiality Agreement | | | 6.12 | |
Consent | | | 3.5(b) | |
Converted Option | | | 6.14(a)(ii) | |
Term
|
| |
Section Reference
|
|
Covered Persons | | | 6.16(a) | |
Customer Contracts | | | 3.10(a)(ix) | |
D&O Insurance | | | 6.16(c) | |
Debt Financing | | | 4.8(b) | |
Debt Letters | | | 4.8(b) | |
Definitive Financing Agreement | | | 6.11(h) | |
DPAS | | | 3.26(h) | |
Dual Listing | | | 6.6(a) | |
Effective Time | | | 2.2 | |
Electing Holder | | | 6.19(c) | |
Electronic Delivery | | | 9.12 | |
Exchange Fund | | | 2.8(b) | |
Exchange Fund Agent | | | 2.8(b) | |
Existing Indemnification Agreements | | | 6.16(a) | |
Financing Deliverables | | | 6.11(h) | |
Financing Information | | | 6.11(h) | |
Financing Sources | | | 6.11(h) | |
Funded International Employee Plan | | | 3.17(b) | |
Governmental Plan | | | 3.17(j) | |
ICL | | | Recitals | |
Independent Contractor | | | 3.10(a)(iii) | |
Information Agent | | | 2.8(a) | |
Insurance Matter | | | 6.3 | |
Interim Option Tax Ruling | | | 6.18(a) | |
ISA Exemption | | | 6.6(b) | |
Israeli Employees | | | 3.18(c) | |
Israeli Prospectus | | | 6.6(c) | |
Israeli Offering Exemption | | | 6.6(a) | |
Israeli Options Exemptions | | | 6.6(b) | |
ITA | | | 2.13(a) | |
Labor Organization | | | 3.18(a) | |
Leased Real Property | | | 3.19(b) | |
Leases | | | 3.19(b) | |
Letter of Transmittal | | | 2.8(c)(i) | |
Material Contract | | | 3.10(a) | |
Merger | | | Recitals | |
Merger Consideration | | | Recitals | |
Merger Proposal | | | 6.4(a)(i) | |
Merger Proposal Submission Date | | | 6.4(a)(iii) | |
Merger Sub | | | Preamble | |
Option Consideration | | | 6.14(b)(i) | |
Option Tax Ruling | | | 6.18(a) | |
Outbound Lease | | | 3.19(b) | |
Term
|
| |
Section Reference
|
|
Outbound Leased Property | | | 3.19(b) | |
Owned Real Property | | | 3.19(a) | |
Parent | | | Preamble | |
Parent Charter Documents | | | 4.1 | |
Parent SEC Reports | | | 4.6(a) | |
Parent Securities | | | 4.5(b) | |
Parties | | | Preamble | |
Paying Agent | | | 2.8(a) | |
Payor | | | 2.13(a) | |
Permits | | | 3.12 | |
Privacy Requirements | | | 3.21(l) | |
Proxy Statement | | | 6.5(a) | |
Real Property | | | 3.19(c) | |
Redacted Fee Letter | | | 4.8(b) | |
Regulatory Approvals | | | 7.1(b) | |
Replacement RSU | | | 6.14(a)(ii) | |
Requisite Shareholder Approval | | | 3.3(c) | |
Section 14 Arrangement | | | 3.18(c) | |
Significant Customer | | | 3.14(a) | |
Significant Supplier | | | 3.14(b) | |
Specified Auditor Assistance | | | 6.11(h) | |
Stock Merger Consideration | | | Recitals | |
Subsidiary Securities | | | 3.2(c) | |
Substantial Creditors | | | 6.4(a)(iii)(D) | |
Superior Proposal Notice Period | | | 6.2(c) | |
Surviving Company | | | 2.1 | |
Takeover Law | | | 3.29(a) | |
Termination Date | | | 8.1(d) | |
Uncertificated Shares | | | 2.8(c)(i) | |
Voting Agreement | | | Recitals | |
Withholding Drop Date | | | 2.13(b) | |
Withholding Tax Ruling | | | 6.18(b) | |
| | | | COMTECH TELECOMMUNICATIONS CORP. | | |||
| | | | By: | | |
/s/ Michael D. Porcelain
Name: Michael D. Porcelain
Title: President and Chief Operating Officer |
|
| | | | CONVOY LTD. | | |||
| | | | By: | | |
/s/ Michael D. Porcelain
Name: Michael D. Porcelain
Title: Director |
|
| | | | GILAT SATELLITE NETWORKS LTD. | | |||
| | | | By: | | |
/s/ Yona Ovadia
Name: Yona Ovadia
Title: CEO |
|
| | | | By: | | |
/s/ Dov Baharav
Name: Dov Baharav
Title: Chairman |
|
1 Year Gilat Satellite Networks Chart |
1 Month Gilat Satellite Networks Chart |
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