AUDIOVOX CORPORATION
OFFER TO PURCHASE FOR CASH
ANY OR ALL OF ITS OUTSTANDING WARRANTS,
EACH EXERCISABLE AT $7 1/8 PER SHARE OF CLASS A COMMON STOCK,
AT
$1.30 PER WARRANT
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE
OFFER IS EXTENDED.
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Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase all of its outstanding warrants (the "Warrants") at a
price, net to the seller in cash, of $1.30 per Warrant (the "Purchase
Price"), upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal (which together constitute the
"Offer"). Each Warrant entitles the holder thereof to purchase one share of
Class A Common Stock, $.01 par value per share ("Common Stock"), of the
Company at a price of $7 1/8 per share (the "Warrant Exercise Price"),
subject to adjustment, from the date of issuance until March 15, 2001,
unless sooner terminated under the circumstances described below. As of
August 7, 1998, the Company had issued and outstanding 1,668,875 Warrants.
On August 7, 1998, the closing sales price of the Common Stock on the
American Stock Exchange was $4 11/16 per share. See Section 9.
WARRANTHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
COMMON STOCK. ------------------------------------
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THIS OFFER TO PURCHASE.
------------------------------------
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
------------------------------------
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH WARRANTHOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER
MUST MAKE HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF
SO, HOW MANY WARRANTS TO TENDER.
------------------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON
THE ACCURACY OF THE ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------------------
The Dealer Manager for the Offer is:
Ladenburg Xxxxxxxx & Co. Inc.
------------------------------------
The date of this Offer to Purchase is August 10, 1998.
IMPORTANT
Any warrantholder desiring to tender all or any portion of such
holder's Warrants should (a) complete and sign the Letter of Transmittal or
a facsimile thereof in accordance with the instructions in the Letter of
Transmittal, and mail or deliver it and any other required documents
(including the certificates representing the Warrants to be tendered) to
Continental Stock Transfer & Trust Company, who will act as depositary and
escrow agent for the Offer (the "Depositary"), (b) request such holder's
broker, dealer, commercial bank, trust company or other nominee to effect
the transaction for such holder or (c) tender through The Depository Trust
Company ("DTC") pursuant to DTC's Automated Tender Offer Program. Any
warrantholder whose Warrants are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
person if such holder desires to tender Warrants. Any warrantholder who
desires to tender Warrants and whose certificates for such Warrants are not
immediately available for delivery to the Depositary should tender such
Warrants by following the procedures for guaranteed delivery set forth in
Section 5.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery or other materials relating to the Offer may be directed to
Ladenburg Xxxxxxxx & Co. Inc. (the "Dealer Manager") at the address and
telephone number set forth on the back cover of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE COMPANY AS TO WHETHER WARRANTHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING WARRANTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE
OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER
OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION
AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY.
TABLE OF CONTENTS
PAGE
----
SUMMARY......................................................... 4
INTRODUCTION.................................................... 6
SPECIAL FACTORS................................................. 7
Section 1. Background; Purpose of the Offer; Certain
Effects of the Offer; Plans of the Company
After the Offer............................... 7
Section 2. Federal Income Tax Consequences............... 8
Section 3. Certain Legal Matters; Regulatory and Foreign
Approvals; No Appraisal Rights............... 9
THE OFFER....................................................... 10
Section 4. Expiration Date; Extension of the Offer...... 10
Section 5. Procedure for Tendering of Warrants.......... 10
Proper Tender of Warrants................... 10
Signature Guarantees and Method of Delivery 11
Book-Entry Delivery of the Warrants......... 11
Federal Backup Withholding.................. 11
Guaranteed Delivery......................... 12
Determinations of Validity of Warrants;
Rejection of Warrants; Waiver of Defects;
No Obligation to Give Notice of Defects..... 12
Section 6. Withdrawal Rights.............................. 12
Section 7. Acceptance for Payment of Warrants and Payment
of Purchase Price............................. 13
Section 8. Certain Conditions of the Offer............... 14
Section 9. Price Range of Common Stock................... 16
Section 10. Certain Information Concerning the Company 16
General..................................... 16
Summary Consolidated Financial Data......... 16
Capitalization.............................. 18
Additional Information...................... 18
Section 11. Source and Amount of Funds................ 19
Section 12. Transactions and Arrangements Concerning the
Warrants...................................... 19
Section 13. Extension of the Tender Period; Termination;
Amendments.................................... 19
Section 14. Fees and Expenses............................. 20
Section 15. Miscellaneous................................. 21
SCHEDULE A. Directors and Executive Officers of
the Company................................... A-1
SUMMARY
This summary is provided solely for the convenience of the
warrantholders and is qualified in its entirety by reference to the full
text and more specific details contained in this Offer to Purchase and the
related Letter of Transmittal and any amendments hereto and thereto.
The Company Audiovox Corporation.
Warrants Each Warrant entitles the holder thereof to
purchase one share of Common Stock at a price of
$7 1/8 per share, subject to adjustment, from the
date of issuance until March 15, 2001, unless
sooner terminated under the circumstances below.
Potential Acceleration If less than 5% of the Warrants initially issued
of Warrants remain outstanding, the Company may elect, by
written notice to each holder of Warrants, that
the Warrants will expire on the 30th day after
delivery of such notice. The Company intends to
make such election if more than 95% of the
Warrants are tendered pursuant to the Offer. See
Section 1.
Number of Warrants 1,668,875 (all of the Warrants outstanding).
Purchase Price $1.30 per Warrant, net to the seller in cash, upon
the terms and conditions set forth herein and in
the Letter of Transmittal.
Expiration Date of Offer Friday, September 4, 1998, at 12:00
midnight, New York City time, unless extended.
How to Tender
Warrants See Section 5. For further information, call the
Dealer Manager or consult your broker for
assistance.
Withdrawal Rights Tendered Warrants may be withdrawn at any time
until the Expiration Date of the Offer, and may
also be withdrawn after October 5, 1998 (or such
later date may apply if the Offer is extended),
unless previously accepted for payment by the
Company. See Section 4 and Section 6.
Conditions to Offer The Offer is subject to certain conditions
described herein. See Section 8.
Background; Purpose
and Effects of Offer On May 9, 1995, the Company issued 1,668,875
Warrants in a private placement to the beneficial
holders, as of June 3, 1994, of approximately
$57,640,000 of the Company's 6 1/4% Convertible
Subordinated Debentures due 2001 (the
"Subordinated Debentures") in exchange for a
release of any claims such holders may have
against the Company, its agents, directors and
employees in connection with their investment in
the Subordinated Debentures. Each holder received
30 Warrants for each $1,000 principal amount of
Subordinated Debentures held, except for
Xxxxxxxxxxx & Co., Inc., which received 25
Warrants per $1,000 principal amount of the
Subordinated Debentures held. Simultaneous with
the issuance of the Warrants in May 1995, Xxxx X.
Xxxxxx, President, Chief Executive Officer and
Chairman of the Board of the Company, granted the
Company an option (the "Xxxxxx Option") to
purchase a number of shares of Common Stock equal
to the number of shares purchasable under the
Warrants. The purchase price per share of Common
Stock (the "Xxxxxx Option Price") upon exercise of
the Xxxxxx Option will be equal to the sum of (a)
the Warrant Exercise Price plus (b) an additional
amount (the "Tax Amount") intended to reimburse
Xx. Xxxxxx for any additional taxes per share
required to be paid by Xx. Xxxxxx as a result of
the payment of the Xxxxxx Option Price being
treated for federal, state and local income tax
purposes as the distribution to Xx. Xxxxxx of a
dividend (taxed at ordinary income rate without
consideration of Xx. Xxxxxx'x basis), rather than
as a payment to Xx. Xxxxxx for the sale of his
Common Stock to the Company (taxed at the capital
gains rate with consideration of Xx. Xxxxxx'x
basis and considering any stepped up basis to Xx.
Xxxxxx'x heirs, successors or assigns) pursuant to
the Xxxxxx Option.
The Company is tendering for the Warrants because
the Company believes that purchasing all of the
Warrants from the warrantholders would cost less
than reimbursing Xx. Xxxxxx for the Tax Amount in
the event that warrantholders exercise their
rights under the Warrants to acquire shares of the
Common Stock and the Company elects to exercise
the Xxxxxx Option.
The Company's purchase of Warrants pursuant to the
Offer will reduce the number of warrantholders and
the number of Warrants outstanding. If more than
95% of the Warrants are tendered pursuant to the
Offer, the Company intends to elect, by written
notice to each holder of the remaining Warrants,
that such Warrants will expire on the 30th day
after delivery of such notice.
Market Price of Common
Stock On August 7, 1998, the closing sales price of the
American Stock Exchange was $4 11/16 per share.
Warrantholders are urged to obtain a current
market quotation. See Section 9.
Trading Market The Warrants are quoted on the "pink sheets"
published by the National Quotation Bureau, Inc.
The Company believes that the Warrants are not
actively traded.
Brokerage Commissions Not payable by warrantholders.
Stock Transfer Tax None, except as provided in Instruction 3 of the
Letter of Transmittal and Section 7.
Payment Date As soon as practicable after the Expiration Date
of the Offer.
Further Information Any questions, requests for assistance or requests
for additional copies of this Offer to Purchase,
the Letter of Transmittal or other materials
relating to the Offer may be obtained by
contacting the Dealer Manager at the address and
telephone number set forth on the back cover of
this Offer to Purchase.
INTRODUCTION
Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase all of its outstanding warrants (the "Warrants") at a
price, net to the seller in cash, of $1.30 per Warrant (the "Purchase
Price"), upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal (which together constitute the
"Offer"). Each Warrant entitles the holder thereof to purchase one share of
Class A Common Stock, $.01 par value per share ("Common Stock"), of the
Company at a price of $7 1/8 per share (the "Warrant Exercise Price"),
subject to adjustment, from the date of issuance until March 15, 2001,
unless sooner terminated under certain circumstances. As of August 7, 1998,
the Company had issued and outstanding 1,668,875 Warrants. On August 7,
1998, the closing sales price of the Common Stock on the American Stock
Exchange was $4 11/16 per share. See Section 9. WARRANTHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON STOCK.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THIS OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH HOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER MUST MAKE
HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF SO, HOW
MANY WARRANTS TO TENDER.
Warrantholders are not under any obligation to accept the Offer or to
remit the Warrants to the Company pursuant to the Offer. Tendering
warrantholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of
Transmittal, stock transfer taxes on the purchase of Warrants by the
Company. The Company will pay all charges and expenses of the Depositary
and the Dealer Manager incurred in connection with the Offer. ANY TENDERING
WARRANTHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE
FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF
A FOREIGN INDIVIDUAL, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE
SUBJECT TO REQUIRED U.S. FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF
THE GROSS PROCEEDS PAYABLE TO SUCH WARRANTHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER.
The address of the principal executive offices of the Company is 000
Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
SPECIAL FACTORS
SECTION 1. BACKGROUND; PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE
OFFER; PLANS OF THE COMPANY AFTER THE OFFER
On May 9, 1995, the Company issued 1,668,875 Warrants in a private
placement to the beneficial holders, as of June 3, 1994, of approximately
$57,640,000 of the Company's 6 1/4% Convertible Subordinated Debentures due
2001 (the "Subordinated Debentures") in exchange for a release of any
claims such holders may have had against the Company, its agents, directors
and employees in connection with their investment in the Subordinated
Debentures. Each holder received 30 Warrants for each $1,000 principal
amount of Subordinated Debentures, except for Xxxxxxxxxxx & Co., Inc.,
which received 25 Warrants per $1,000 principal amount of the Subordinated
Debentures held. Each Warrant is exercisable for one share of Common Stock
at a price of $7 1/8 per share, subject to adjustment under certain
circumstances, at any time until 12:00 midnight, New York City time, on
March 15, 2001, unless sooner terminated under the circumstances described
below.
Simultaneously with the issuance of the Warrants in May 1995, Xxxx X.
Xxxxxx, President, Chief Executive Officer and Chairman of the Board of the
Company, granted the Company an option (the "Xxxxxx Option") to purchase a
number of shares of Common Stock equal to the number of shares purchasable
under the Warrants. The purchase price per share of Class A Common Stock
(the "Xxxxxx Option Price") upon the exercise of the Xxxxxx Option will be
equal to the sum of (a) the Warrant Exercise Price plus (b) an additional
amount (the "Tax Amount") intended to reimburse Xx. Xxxxxx for any
additional taxes per share required to be paid by Xx. Xxxxxx as a result of
the payment of the Xxxxxx Option Price being treated for federal, state and
local income tax purposes as the distribution to Xx. Xxxxxx of a dividend
(taxed at ordinary income rate without consideration of Xx. Xxxxxx'x
basis), rather than as a payment to Xx. Xxxxxx for the sale of his Common
Stock to the Company (taxed at the capital gains rate with consideration of
Xx. Xxxxxx'x basis and considering any stepped up basis to Xx. Xxxxxx'x
heirs, successors or assigns) pursuant to the Xxxxxx Option.
On August 7, 1998, there were 1,668,875 Warrants, 17,258,573 shares of
Common Stock (447,000 of which were held by the Company as treasury shares)
and 2,260,954 shares of Class B Common Stock issued and outstanding. If all
outstanding Warrants were exercised for shares of Common Stock on a
one-for-one basis, the Common Stock into which such Warrants were converted
would represent approximately 7.9% of the issued and outstanding Common
Stock and Class B Common Stock of the Company (excluding the effect of the
exercise or conversion of the Company's other outstanding options or
warrants).
The Company is tendering for the Warrants because the Company believes
that purchasing all of the Warrants from the warrantholders would cost less
than reimbursing Xx. Xxxxxx for the Tax Amount in the event that
warrantholders exercise their rights under the Warrants to acquire shares
of the Common Stock and the Company elects to exercise the Xxxxxx Option.
The Board of Directors has unanimously authorized the Offer. HOWEVER, THE
COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH HOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER MUST MAKE
HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF SO, HOW
MANY WARRANTS TO TENDER. The Company anticipates that it will fund the
purchase of Warrants pursuant to the Offer and the payment of related fees
and expenses from cash generated from operations.
Holders of the Warrants are not under any obligation to accept the
Offer or to remit their Warrants to the Company pursuant to the Offer.
Warrants that the Company acquired pursuant to the Offer will be retired
and will not be reissued.
If fewer than all of the Warrants are purchased pursuant to the Offer,
the Company may, in its sole discretion, purchase any then outstanding
Warrants through privately negotiated transactions, open market purchases,
another tender offer or otherwise, on such terms and at such prices as the
Company may determine from time to time, the terms of which could be the
same as, or more or less favorable to warrantholders than, the terms of the
Offer.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
Any possible future purchases of Warrants by the Company will depend
on many factors, including the market price (if any) of the Warrants, the
market price of the Common Stock, the Company's business and financial
position, alternative investment opportunities available, the results of
the Offer and general economic and market conditions. However, Rule 13e-4
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prohibits the Company and its affiliates from purchasing any Warrants,
other than pursuant to the Offer, until at least ten business days after
the Expiration Date.
In May 1997, the Company announced that its Board of Directors has
authorized the repurchase of up to one million shares of Common Stock.
During the pendency of the Offer, the Company will suspend any repurchase
of the Common Stock. Except as described above or pursuant to the Offer,
the Company has no present plans or proposals that would result in (a) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company, (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, or any sale
or transfer of a material amount of assets, involving the Company or any of
its subsidiaries, (c) any change in the present Board of Directors or
management of the Company including, but not limited to, any plan or
proposal to change the number or term of the directors, to fill any
existing vacancy on the Board of Directors or to change any material term
of the employment contract of any executive officer of the Company, (d) any
material change in the present dividend rate or policy or indebtedness or
capitalization of the Company, (e) any other material change in the
Company's corporate structure or business, (f) any change in the Company's
charter, bylaws or instruments corresponding thereto or any other actions
which may impede the acquisition of control of the Company by any person,
(g) any class of equity security of the Company (other than the Warrants)
being de-listed from a national securities exchange or ceasing to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, without listing on another national
securities exchange or quotation on an inter-dealer quotation system of a
registered national securities association, (h) any class of equity
securities of the Company (other than the Warrants) becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act or (i) the suspension of the Company's obligation to file reports
pursuant to Section 15(d) of the Exchange Act. See Section 10.
SECTION 2. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary of material federal income tax considerations
regarding the Offer is based on current law (except as specifically
discussed below), is for general purposes only, and is not tax advice. The
discussion contained in this summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), existing and proposed United States
Treasury regulations promulgated thereunder, rulings, administrative
pronouncements and judicial decisions, subject to change, possibly with
retroactive effect. This discussion does not purport to deal with all
aspects of taxation that may be relevant to particular warrantholders in
light of their personal investment or tax circumstances, or to certain
types of warrantholders (including insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, traders in
securities, persons who hold Warrants as part of hedging, "straddle",
"conversion" or other integrated transactions and persons who are not
United States persons as defined in Section 7701(a)(30) of the Code)
subject to special treatment under the federal income tax laws. This
discussion assumes that the Warrants are (and the Common Stock issuable
upon exercise of the Warrants, would be) held as "capital assets" within
the meaning of Section 1221 of the Code.
EACH WARRANTHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING
THE SPECIFIC U.S. FEDERAL INCOME TAX CONSEQUENCES TO SUCH WARRANTHOLDER
TENDERING WARRANTS PURSUANT TO THE OFFER, AND THE APPLICABILITY AND EFFECT
OF ANY STATE, LOCAL OR FOREIGN TAX LAWS AND RECENT OR POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
The purchase by the Company of a Warrant pursuant to the Offer will be
a taxable transaction in which a tendering warrantholder will generally
recognize taxable gain or loss in an amount equal to the difference between
the amount realized on the sale and the holder's adjusted tax basis in the
Warrants. Any gain or loss recognized on the transaction will be capital
gain or loss, which would be long-term if the Warrants have been held for
more than one year.
SECTION 3. CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS;
NO APPRAISAL RIGHTS
The Company is not aware of any license or regulatory permit that
appears to be material to its business that might be adversely affected by
its purchase of Warrants as contemplated in the Offer or of any approval or
other action by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, that would be required
for the Company's purchase of Warrants pursuant to the Offer. Should any
such approval or other action be required, the Company currently
contemplates that it will seek such approval or other action. The Company
cannot predict whether it may determine that it is required to delay the
acceptance for payment of, or payment for, Warrants tendered pursuant to
the Offer pending the outcome of any such matter. There can be no assurance
that any such approval or other action, if needed, would be obtained or
would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. In lieu of seeking such approval,
the Company may determine to terminate the Offer as described in Section 8.
The Company intends to make all required filings under the Exchange Act
with regard to the Offer. The Company's obligations under the Offer to
accept for payment, or make payment for, Warrants is subject to certain
conditions. See Section 8.
There is no stockholder or warrantholder vote required in connection
with the Offer.
There are no appraisal rights available to holders of Warrants in
connection with the Offer.
THE OFFER
SECTION 4. EXPIRATION DATE; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment (and thereby purchase) all Warrants that are
properly tendered on or before the Expiration Date (and not withdrawn in
accordance with Section 6) at the Purchase Price. The term "Expiration
Date" means 12:00 midnight, New York City time, on Friday, September 4,
1998, unless and until the Company shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended
by the Company, shall expire. See Section 8 regarding certain conditions of
the Offer.
As described in Section 13, the Company expressly reserves the right,
in its sole discretion, at any time or from time to time, to extend the
period of time during which the Offer is open by giving oral or written
notice of such extension to the Depositary and by making public
announcement thereof. See Section 13. There can be no assurance, however,
that the Company will exercise its right to extend the Offer.
If the Company increases the price to be paid for Warrants and the
Offer is scheduled to expire at any time earlier than the tenth business
day from and including the date that notice of such increase is first
published, sent or given in the manner specified in Section 13, the Offer
will be extended until the expiration of the ten business day period
immediately following the date of such notice. For purposes of the Offer,
"business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
All Warrants purchased pursuant to the Offer will be purchased at the
Purchase Price in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase. All Warrants not purchased pursuant to the
Offer, including Warrants tendered and withdrawn, will be promptly returned
to the tendering warrantholders at the Company's expense.
SECTION 5. PROCEDURE FOR TENDERING OF WARRANTS
Proper Tender of Warrants. For Warrants to be properly tendered
pursuant to the Offer:
(a) the Warrants, together with a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) with any
required signature guarantees, and any other documents required by the
Letter of Transmittal, or (in the case of a book-entry transfer) an
Agent's Message in lieu of the Letter of Transmittal must be received
before the Expiration Date by the Depositary at its address set forth
on the back cover of this Offer to Purchase; or
(b) the tendering warrantholder must comply with the guaranteed
delivery procedure set forth below.
The term "Agent's Message" means a message, transmitted by DTC and
received by the Depositary and forming a part of a book-entry confirmation
("Book-Entry Confirmation"), which states that DTC has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal and that the Company may enforce such Letter of Transmittal
against such participant. A tender of Warrants made pursuant to any method
of delivery set forth herein will constitute a binding agreement between
the tendering warrantholder and the Company upon the terms and conditions
of the Offer. LETTERS OF TRANSMITTAL AND CERTIFICATES REPRESENTING WARRANTS
SHOULD NOT BE SENT DIRECTLY TO THE COMPANY.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is
signed by the registered owner of the Warrants tendered therewith, and
payment and delivery are to be made directly to such registered owner at
such owner's address shown on the records of the Company, or if Warrants
are tendered for the account of a bank, dealer, credit union, savings
association or other entity that is a member in good standing of a
recognized Medallion Program approved by the Securities Transfer
Association (each such entity being hereinafter referred to as an "Eligible
Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction
2 of the Letter of Transmittal. If a Warrant is registered in the name of a
person other than the signer of a Letter of Transmittal, or if payment is
to be made, or Warrants not purchased or tendered are to be issued, to a
person other than the registered owner, the Warrant must be endorsed or
accompanied by an appropriate power, in either case signed exactly as the
name of the registered owner appears on the Warrant, with the signature on
the Warrant or power guaranteed by an Eligible Institution. In all cases,
payment for Warrants tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of such
Warrants, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantee, and any other
required documents.
Book-Entry Delivery of the Warrants. Within two business days after
the date of this Offer to Purchase, the Depositary will establish an
account with respect to the Warrants at DTC for purposes of the Offer. Any
financial institution that is a participant in the DTC system may make
book-entry delivery of the Warrants by causing DTC to transfer such
Warrants into the Depositary's account in accordance with DTC's procedure
for such transfer. Although delivery of Warrants may be effected through
book-entry at DTC, the Letter of Transmittal, with any required signature
guarantees, or (in the case of a book-entry transfer) an Agent's Message in
lieu of the Letter of Transmittal and any other required documents, should
be transmitted to and received by the Depositary prior to the Expiration
Date at the address set forth on the back cover of this Offer to Purchase.
Delivery of such documents to DTC does not constitute delivery to the
Depositary.
THE METHOD OF DELIVERY OF THE WARRANTS IS AT THE ELECTION AND RISK OF
THE TENDERING WARRANTHOLDER. IF DELIVERY IS TO BE MADE BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Federal Backup Withholding. Unless an exemption applies under the
applicable law and regulations concerning "backup withholding" of federal
income tax, the Depositary will be required to withhold, and will withhold,
31% of the gross proceeds otherwise payable to a warrantholder or other
payee pursuant to the Offer unless the warrantholder or other payee
provides such person's tax identification number (social security number or
employer identification number) and certifies that such number is correct.
Each tendering warrantholder, other than a non-corporate foreign
warrantholder, should complete and sign the main signature form and the
Substitute Form W-9 included as part of the Letter of Transmittal, so as to
provide the information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a
manner satisfactory to the Company and the Depositary. Non-corporate
foreign warrantholders should generally complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding.
Guaranteed Delivery. If a warrantholder desires to tender Warrants
pursuant to the Offer and such holder's Warrants are not immediately
available or time will not permit all required documents to reach the
Depositary before the Expiration Date or the procedures for book-entry
transfer cannot be completed on a timely basis, such Warrants may
nevertheless be tendered provided that all of the following conditions are
satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, or facsimile
transmission), on or prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer to
Purchase; and
(c) the tendered Warrants in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
a facsimile thereof) with any required signature guarantees, and any
other documents required by the Letter of Transmittal are received by
the Depositary within three Nasdaq trading days after the date of
execution of such Notice of Guaranteed Delivery.
Determinations of Validity of Warrants; Rejection of Warrants; Waiver
of Defects; No Obligation to Give Notice of Defects. All questions as to
the validity, form, eligibility (including time of receipt) and acceptance
for payment of any tender of Warrants will be determined by the Company, in
its sole discretion, which determination shall be final and binding on all
parties. The Company reserves the absolute right to reject any or all
tenders it determines not to be in proper form or the acceptance for
payment of which may, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the absolute right to waive any of the conditions
of the Offer and any defect or irregularity in the tender of any particular
Warrants. No tender of Warrants will be deemed to be properly made until
all defects or irregularities have been cured or waived. None of the
Company, the Depositary, the Dealer Manager or any other person is or will
be obligated to give notice of any defects or irregularities in tenders,
and none of them will incur any liability for failure to give any such
notice.
SECTION 6. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 6, a tender of Warrants
pursuant to the Offer is irrevocable. Warrants tendered pursuant to the
Offer may be withdrawn (a) at any time before the Expiration Date and (b)
unless therefore accepted for payment by the Company as described in the
first paragraph of Section 7, may also be withdrawn at any time after
October 5, 1998 (or such later date may apply if the Offer is extended). If
the Company extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Warrants or is unable to
accept for payment or pay for Warrants pursuant to the Offer for any
reason, then, without prejudice to the Company's rights under the Offer,
the Depositary may, on behalf of the Company, retain all Warrants tendered,
and such Warrants may not be withdrawn except as otherwise provided in this
Section 6, subject to Rule 13e-4(f)(5) under the Exchange Act, which
provides that the issuer making a tender offer shall either pay the
consideration offered or return the tendered securities promptly after the
termination or withdrawal of the tender offer.
For a withdrawal to be effective, the Depositary must timely receive
(at its address set forth on the back cover of this Offer to Purchase), by
written, telegraphic or facsimile transmission, a notice of withdrawal.
Such notice of withdrawal must specify the name of the person having
tendered the Warrants to be withdrawn, the number of Warrants to be
withdrawn and the name of the registered owner, if different from that of
the person who tendered such Warrants. If the Warrants have been delivered
or otherwise identified to the Depositary, then, prior to the release of
such Warrants, the tendering warrantholder must also submit the serial
numbers shown on the particular Warrants, and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (except in the
case of Warrants tendered by an Eligible Institution). If the Warrants have
been tendered pursuant to the procedures for book-entry transfer as set
forth herein, any notice of withdrawal must also specify the name and
number of the account at DTC to be credited with the withdrawn Warrants.
All questions as to the form and validity (including timely receipt)
of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
None of the Company, the Depositary, the Dealer Manager or any other person
is or will be obligated to give any notice of any defects or irregularities
in any notice of withdrawal, and none of them will incur any liability for
failure to give any such notice. A withdrawal of a tender of Warrants may
not be rescinded, and Warrants properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. Withdrawn Warrants may,
however, be re-tendered before the Expiration Date by again following the
applicable procedures described in Section 5.
SECTION 7. ACCEPTANCE FOR PAYMENT OF WARRANTS AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, promptly
after the Expiration Date, the Company will purchase and pay the Purchase
Price for all Warrants (subject to certain matters discussed in Section 4
and Section 13) as are properly tendered and not withdrawn as permitted in
Section 6. For purposes of the Offer, the Company will be deemed to have
accepted for payment (and thereby purchased) Warrants which are tendered
and not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Warrants for payment pursuant to the
Offer. See Section 8 regarding certain conditions of the Offer.
Payment for Warrants pursuant to the Offer will be made by depositing
the aggregate Purchase Price therefor with the Depositary, which will act
as agent for tendering warrantholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering warrantholders.
Notwithstanding any other provision hereof, payment for Warrants accepted
for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of the accepted Warrants, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
with any required signature guarantees and any other required documents.
Under no circumstances will interest on the Purchase Price be paid by the
Company, regardless of any delay in making such payment.
The Company will pay any stock transfer taxes with respect to the
transfer and sale of Warrants to it pursuant to the Offer. If, however, (a)
payment of the Purchase Price is to be made to any person other than the
registered holder, (b) Warrants not tendered or accepted for purchase are
to be registered in the name of any person other than the registered
holder, (c) tendered Warrants are registered in the name of any person
other than the person signing the Letter of Transmittal or (d) a transfer
tax is imposed for any reason other than the transfer or sale of the
Warrants to the Company pursuant to the Offer, then the amount of any
transfer taxes (whether imposed on the registered holder or such person)
payable on account of the transfer to such person will be deducted from the
Purchase Price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted. See Instruction 3 of the Letter of
Transmittal.
ANY TENDERING WARRANTHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY
AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR,
IN THE CASE OF A FOREIGN INDIVIDUAL, FORM W-8 OBTAINABLE FROM THE
DEPOSITARY) MAY BE SUBJECT TO REQUIRED U.S. FEDERAL INCOME TAX WITHHOLDING
OF 31% OF THE GROSS PROCEEDS PAID TO SUCH WARRANTHOLDER OR OTHER PAYEE
PURSUANT TO THE OFFER. SEE SECTION 5.
SECTION 8. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to
(and not in limitation of) the Company's right to extend or otherwise amend
the Offer at any time in its sole discretion, the Company shall not be
required to accept for payment or make payment for any Warrant tendered,
and may terminate or amend the Offer, if before acceptance for payment of
payment for any such Warrant any of the following shall have occurred or
shall have been determined to have occurred by the Company, whose
determination shall be conclusive:
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign,
which (i) challenges or seeks to challenge the making of the Offer,
the purchase of Warrants pursuant to the Offer or otherwise relates in
any manner to the Offer; or (ii) in the sole judgment of the Company,
could materially adversely affect the business, condition (financial
or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or
any of its subsidiaries or materially impair the Offer's contemplated
benefits to the Company;
(b) there shall have been any action, threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced, or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by
any court or any government or governmental, regulatory or
administrative authority, agency, tribunal, domestic or foreign, which
in the Company's sole judgment, would or might directly or indirectly,
(i) make the acceptance for payment of, or payment for, Warrants
illegal or otherwise restrict or prohibit consummation of the Offer;
(ii) delay or restrict the ability of the Company, or render the
Company unable, to accept for payment, or pay for, Warrants; (iii)
materially impair the contemplated benefits of the Offer to the
Company; or (iv) materially and adversely affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any United
States national securities exchange or in the over-the-counter market
(excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index); (ii) any significant
decline in the market prices of equity securities in the United States
or abroad; (iii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iv)
the commencement of a war, armed hostilities or other international or
national crisis directly or indirectly involving the United States;
(v) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event
which, in the sole judgment of the Company, might affect, the
extension of credit by banks or other lending institutions in the
United States; (vi) any change in the general political, market,
economic or financial conditions in the United States or abroad that
could, in the sole judgment of the Company, have a material adverse
effect on the Company's business, operations, prospects or the trading
in the Warrants; or (vii) in the case of any of the foregoing existing
at the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(d) any tender or exchange offer with respect to the Warrants
(other than the Offer) or any other class of the Company's equity
securities or any merger, acquisition, business combination or other
similar transaction with or involving the Company or any subsidiary,
shall have been proposed, announced or made by any unaffiliated person
or entity;
(e) any change shall occur or be threatened in the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, which in the sole
judgment of the Company, is or may be materially adverse to the
Company; or
(f) it shall have been publicly disclosed or the Company shall
have learned that (i) any person, entity or "group" (as that term is
used in Section 13(d)(3) of the Exchange Act) shall have acquired, or
proposed to acquire, beneficial ownership of more than 5% of the
outstanding Common Stock (other than a person, entity, or "group"
which had publicly disclosed such ownership in a Schedule 13D or 13G
(or an amendment thereto) on file with the Commission prior to August
10, 1998, (ii) any such person or group that on or prior to August 10,
1998, had filed such a Schedule with the Commission thereafter shall
have acquired or shall propose to acquire beneficial ownership of
additional shares of Common Stock representing 2% or more of the
outstanding Common Stock, (iii) any new group shall have been formed
which beneficially owns more than 5% of the outstanding Common Stock
or (iv) any person, entity or group shall have filed a Notification
and Report Form under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, or made a public announcement reflecting an intent to acquire
the Company or any of its subsidiaries or any of their respective
assets or securities;
and, in the sole judgment of the Company, in any such case and regardless
of the circumstances (including any action or inaction by the Company)
giving rise to such condition, such event makes it inadvisable or
undesirable to proceed with the Offer or with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of the Company
and may be asserted or waived by the Company regardless of the
circumstances (including any action or inaction by the Company) giving
rise to any such condition, and any such condition may be waived by
the Company, in whole or in part, at any time and from time to time in
its sole discretion, provided, however, that the Exchange Act and the
rules and regulations promulgated thereunder require that all
conditions to the Offer, other than those relating to the receipt of
certain necessary governmental approvals, must be satisfied or waived
prior to the Expiration Date. The Company's failure at any time to
exercise any of the foregoing rights shall not be deemed a waiver of
any such right or the waiver of any such right with respect to
particular facts or circumstances, and each such right shall be deemed
an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described
above and any related judgment by the Company regarding the
inadvisability of proceeding with the acceptance of payment or payment
for any tendered Warrants will be final and binding on all parties.
SECTION 9. PRICE RANGE OF COMMON STOCK
The Warrants are quoted on the "pink sheets" published by the National
Quotation Bureau, Inc. The Company believes that the Warrants are not
actively traded. The Common Stock is traded on the American Stock Exchange
under the trading symbol "VOX". The following table sets forth, for each
period shown, the high and low closing bid information for the Common Stock
as reported by the American Stock Exchange.
1997 High Low
---- ---- ---
Fourth Quarter........................... $10 3/4 $7 5/16
1998
----
First Quarter............................ $9 $5 3/4
Second Quarter........................... $7 7/16 $4 3/4
Third Quarter (through August 4, 1998)... $6 $3 11/16
On August 7, 1998, the closing sales price of the Common Stock as
reported by the American Stock Exchange was $4 11/16 per share.
WARRANTHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
COMMON STOCK.
SECTION 10. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company, together with its operating subsidiaries,
markets and supplies, under its own name or trade names, a diverse line of
aftermarket products which include wireless products, both hand-held
portables and vehicle-installed cellular telephones and accessories,
automotive sound equipment and automotive accessories, which includes
vehicle security systems, cruise controls, defoggers, remote start systems
and vehicle tracking systems, all of which are designed primarily for
installation in cars, trucks and vans after they have left the factory, and
consumer electronic products.
Schedule A hereto sets forth the name, business address and present
principal occupation or employment and any other material occupations,
positions, offices or employments during the last five years of each
director and executive officer of the Company.
Summary Consolidated Financial Data. The summary consolidated
financial data of the Company as of May 31, 1998 set forth below has been
excerpted or derived from the financial statements and notes of the
Company's Form 10-K for the years ended November 30, 1997 and November 30,
1996 and the Company's Form 10-Q for the quarter ended May 31, 1998. More
comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The summary
consolidated financial information that follows is qualified in its
entirety by reference to such reports and such other documents and all the
financial information (including any related notes) contained therein. Such
reports and other documents may be examined and copies may be obtained from
the offices of the Commission as described in "--Additional Information."
CONSOLIDATED SUMMARY FINANCIAL DATA
(amounts in thousands, except share and per share data)
For the Year Ended November 30 For the Six Months Ended
------------------------------ ------------------------
1997 1996 May 31, 1998 May 31, 1997
---- ---- ------------ ------------
STATEMENT OF
OPERATIONS DATA:(FN1)
Revenues ............................. $ 639,082 $ 597,915 $ 253,384 $ 314,809
Operating expenses ................... 85,164 80,015 40,589 43,805
Depreciation and amortization....... 1,903 3,298 1,135 924
Operating income (loss) .............. 19,695 13,075 (5,422) 8,328
Net income (loss) .................... 21,022 (26,469) (3,056) 12,557
Net income (loss) per share
applicable to common
stockholders(FN2) - Basic........... $ 1.11 $ (2.82) $ (0.16) $ 0.68
Diluted............. $ 1.09 $ (2.82) $ (0.16) $ 0.67
Weighted average number of
shares of common stock
outstanding(FN2) - Basic............ 18,948,356 9,398,352 19,183,459 18,541,023
Diluted.............. 19,508,132 9,398,352 19,183,459 19,081,884
OTHER OPERATING DATA:
Ratio of earnings (losses) to
fixed charges....................... 13.72 -0.99 -1.61 17.44
BALANCE SHEET DATA:
Cash ................................. $ 9,445 $ 12,350 $ 24,946
Current assets ....................... 239,534 220,673 228,036 209,290
Total assets ......................... 289,827 265,545 291,154 263,738
Current liabilities .................. 60,256 62,496 56,288 60,589
Long term debt ....................... 38,996 70,413 46,312 15,426
Total indebtedness ................... 99,252 132,909 102,600 76,015
Stockholders' equity ................. 187,892 131,499 185,743 185,808
Book value per common share........... $ 9.65 $ 7.91 $ 9.55 $ 9.42
--------------------------------
1 The Offer will have no impact on the pro forma income statement. See
"-Capitalization" for the pro forma capitalization of the Company.
2 Earnings per share computed based upon Statement of Financial
Accounting Standard No. 128, "Earnings Per Share," which the Company
adopted in the first quarter of fiscal 1988.
Capitalization. The following table sets forth the actual
capitalization of the Company at May 31, 1998 and the pro forma
capitalization of the Company at May 31, 1998, giving effect to the
consummation of the Offer. The following table should be read in
conjunction with the summary financial information set forth above and the
detailed information and financial statements included in reports and in
other documents filed by the Company with the Commission. The table below
is qualified in its entirety by reference to such reports and such other
documents and all financial information (including any related notes)
contained therein. Such reports and other documents may be examined and
copies may be obtained from the offices of the Commission as described in
"--Additional Information."
May 31, 1998
(in thousands)
--------------------------------
Pro Forma for
Actual the Offer
------ -------------
Cash and cash equivalents ..................................... $ 7,247 $ 5,077
Stockholders' equity:
Preferred stock ............................................ 2,500 2,500
Common stock:
Class A; 30,000,000 authorized; 17,258,573 issued........ 173 173
Class B; 10,000,000 authorized; 2,260,954 issued......... 22 22
Paid-in capital ............................................ 145,252 143,082
Retained earnings .......................................... 29,869 29,869
Cumulative foreign currency translation and adjustment..... (4,131) (4,131)
Unrealized gain on marketable securities, net............. 13,918 13,918
Gain on hedge of available-for-sale securities.............. 929 929
Treasury stock, 340,000 Class A common stock, at cost ...... (2,789) (2,789)
------ -------
Total stockholders' equity .............................. $ 185,743 $ 183,573
========= =========
Additional Information. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the Commission. The
Company is required to disclose in such proxy statements certain
information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such
persons in transactions with the Company. The Company has also filed an
Issuer Tender Offer Statement on Schedule 13E-4 with the Commission which
includes certain additional information relating to the Offer.
For further information with respect to the Company and the Offer,
reference is made to the Schedule 13E-4 and the exhibits thereto. Such
Schedule and exhibits, along with reports and other information filed with
the Commission, may be inspected without charge at the office of the
Commission at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 and at the
regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and at 000 Xxxx Xxxxxxx (Xxxxx 0000),
Xxxxxxx, Xxxxxxxx 00000. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission at 000
Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. The Commission maintains a Web
site at xxxx://xxx.xxx.xxx that contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the Commission. Statements contained in this Offer to Purchase as to
the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract or document filed with the Commission, each such statement
being qualified in all respects by such reference.
SECTION 11. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 1,668,875 outstanding Warrants
pursuant to the Offer, the total amount required by the Company to purchase
such Warrants at $1.30 per Warrant and to pay related fees and expenses
will be approximately $2.3 million. See Section 14. The Company anticipates
that it will fund the purchase of the Warrants pursuant to the Offer and
the payment of related fees and expenses from cash generated from
operations.
SECTION 12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE WARRANTS
Simultaneously with the issuance of the Warrants in May 1995, Xx.
Xxxxxx granted the Company the Xxxxxx Option to purchase a number of shares
of Common Stock equal to the number of shares purchasable under the
Warrants. The Xxxxxx Option Price upon exercise of the Xxxxxx Option will
be equal to the sum of (a) the Warrant Exercise Price plus (b) the Tax
Amount, an additional amount intended to reimburse Xx. Xxxxxx for any
additional taxes per share required to be paid by Xx. Xxxxxx as a result of
the payment of the Xxxxxx Option Price being treated for federal, state and
local income tax purposes as the distribution to Xx. Xxxxxx of a dividend
(taxed at ordinary income rates without consideration of Xx. Xxxxxx'x
basis), rather than as a payment to Xx. Xxxxxx for the sale of his Common
Stock to the Company (taxed at the capital gains rate with consideration of
Xx. Xxxxxx'x basis and considering any stepped up basis to Xx. Xxxxxx'x
heirs, successors or assigns) pursuant to the Xxxxxx Option.
Other than the transactions described in the foregoing paragraph,
neither the Company nor any of its subsidiaries has effected any
transactions in the Warrants since the issuance thereof in May 1995. No
director or executive officer of the Company listed on Schedule A hereto,
or any of its subsidiaries or any associates of any of the foregoing, owns
any of the Warrants or has effected any transactions in the Warrants since
the issuance of the Warrants in May 1995. None of the Company, any of its
directors or executive officers listed on Schedule A hereto nor any of its
subsidiaries is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer (whether or not legally enforceable) with respect to any securities
of the Company (including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies, consents or authorizations.)
SECTION 13. EXTENSION OF THE TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at
any time or from time to time and regardless of whether or not any of the
events set forth in Section 8 shall have occurred or shall be deemed by the
Company to have occurred, to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, or payment for,
any Warrants by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof. During any such
extension, all Warrants previously tendered and not purchased or withdrawn
will remain subject to the Offer, except to the extent that such Warrants
may be withdrawn as set forth in Section 6. The Company also expressly
reserves the right, in its sole discretion, to terminate the Offer, not
accept for payment and not make payment for any Warrants not theretofore
accepted for payment or paid for upon the occurrence of any of the
conditions specified in Section 8 by giving oral or written notice of such
termination to the Depositary and making a public announcement thereof.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether or not any of the
events set forth in Section 8 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect, including,
without limitation, by increasing or decreasing the consideration offered
in the Offer to owners of Warrants. Amendments to the Offer may be made at
any time or from time to time by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Any public announcement made pursuant to the
Offer will be disseminated promptly to warrantholders in a manner
reasonably designed to inform warrantholders of such change. Without
limiting the manner in which the Company may choose to make a public
announcement, except as required by applicable law, the Company shall have
no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Xxxxx News
Service.
If the Company materially changes the terms of the Offer or the
information concerning the Offer, the Company will extend the Offer to the
extent required by Rule 13e-4 promulgated under the Exchange Act. If the
Company increases the price to be paid for Warrants and the Offer is
scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from and including the date that notice of
such increase is first published, sent or given, the Offer will be extended
until the expiration of such period of ten business days.
SECTION 14. FEES AND EXPENSES
The Company has retained Continental Stock Transfer & Trust Company as
the Depositary and Ladenburg Xxxxxxxx & Co. Inc. as the Dealer Manager. The
Dealer Manager will assist warrantholders who request assistance in
connection with the Offer and may request brokers, dealers and other
nominee warrantholders to forward materials relating to the Offer to
beneficial owners. Brokers, dealers, commercial banks and trust companies
will be promptly reimbursed by the Company for customary handling and
mailing expenses incurred by them in forwarding material to their
customers.
As compensation for acting as Dealer Manager, the Company will pay the
Dealer Manager a fee of approximately $67,000 and will reimburse the Dealer
Manager for all its out-of-pocket expenses incurred in connection with the
Offer. The Company will pay the Depositary a fee of approximately $2,500
for its services in connection with the Offer, plus reimbursement for
out-of-pocket expenses. The Company has agreed to indemnify the Depositary
and the Dealer Manager against certain liabilities and expenses in
connection with the Offer, including certain liabilities under the federal
securities laws. The Depositary has not been retained to make solicitations
or recommendations in its role as Depositary.
Certain directors or executive officers of the Company may, from time
to time, contact warrantholders to provide them with information regarding
the Offer. Such directors and executive officers will not make any
recommendation to any warrantholder as to whether to tender all or any
Warrants and will not solicit the tender of any Warrants. The Company will
not compensate any director or executive officer for this service.
The Company will pay (or cause to be paid) any stock transfer taxes on
its purchase of Warrants, except as otherwise provided in Instruction 3 of
the Letter of Transmittal. See Section 7.
Assuming all outstanding Warrants are tendered pursuant to the Offer,
it is estimated that the expenses incurred by the Company in connection
with the Offer will be approximately $120,000. The Company will be
responsible for paying all such expenses.
SECTION 15. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders
from, owners of Warrants in any jurisdiction in which the Offer or its
acceptance would not be in compliance with the laws of such jurisdiction.
The Company is not aware of any jurisdiction where the making of the Offer
or the tender of Warrants would not be in compliance with applicable law.
If the Company becomes aware of any jurisdictions where the making of the
Offer or the tender of Warrants is not in compliance with any applicable
law, the Company will make a good faith effort to comply with such law. If,
after such good faith effort, the Company cannot comply with such law, the
Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Warrants residing in such jurisdiction. In any
jurisdiction in which the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed
to be made on the Company's behalf by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
AUDIOVOX CORPORATION
August 10, 1998
SCHEDULE A. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, present principal occupation
or employment and any other material occupations, positions, offices or
employments (and business addresses thereof) during the last five years of
each director and executive officer of the Company. The business address of
each of the persons listed below is c/o Audiovox Corporation, 000 Xxxxxx
Xxxx., Xxxxxxxxx, XX 00000. Each such person is a citizen of the United
States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
OTHER MATERIAL OCCUPATIONS, POSITIONS, OFFICES OR
NAME EMPLOYMENTS DURING THE LAST FIVE YEARS
-------------------------- ----------------------------------------------------
Xxxx X. Xxxxxx Xx. Xxxxxx has served as President, Chief
Executive Officer and Director of the Company
since 1987. Xx. Xxxxxx also serves as
president and a director of most of the
Company's operating subsidiaries. From 1960
to 1987, Xx. Xxxxxx was president and a
director of the Company's predecessor,
Audiovox Corp.
Xxxxxx Xxxxxxxxxxx Xx. Xxxxxxxxxxx, Executive Vice President of
the Company, has been with the Company since
1970 and has held his current position since
1983. Xx. Xxxxxxxxxxx has been a director of
the Company since 1987. Xx. Xxxxxxxxxxx is
also President of the Company's cellular
subsidiary, Audiovox Communications Corp.
Xxxx X. Xxxxxx, Xx. Xx. Xxxxxx has been a director of the Company
since 1997. Xx. Xxxxxx has been the President
and Chief Executive Officer of Lafayette
American Bank since December 1, 1997. Prior
thereto he was a Senior Vice President at
Handy HRM Corp., an executive search firm,
from June 1996 through November 1997. From
1993 through 1996, Xx. Xxxxxx was an
Executive Vice President of NatWest Bank N.A.
and prior thereto, was President of National
Westminster Bank USA.
Xxxxxx X. XxXxxxx Xx. XxXxxxx has been a director of the
Company since 1998. Xx. XxXxxxx has been
self-employed as a telecommunications
consultant since January 1, 1998. Prior
thereto he was employed by NYNEX Corp. for
over 27 years, most recently as a Senior Vice
President and Managing Director. Xx. XxXxxxx
was in this position from 1991 through
December 31, 1997.
Xxxxxxx X. Xxxxxx Xx. Xxxxxx has been Chief Financial Officer
since 1979 and was elected Senior Vice
President in 1990. Xx. Xxxxxx has been a
director of the Company since 1987. From 1979
through 1990 he was a Vice President of the
Company.
Xxxxxxx X. Xxxxxxx Xx. Xxxxxxx has been Senior Vice President of
the Automotive Electronics Division since
1996 and has been a Vice President of the
Company since 1982. Xx. Xxxxxxx has been a
director of the Company since 1993.
Xxxxx X. Xxxxxxx Xx. Xxxxxxx has been a Vice President
of the Company since 1986 and Secretary since
1980. Xx. Xxxxxxx has been employed by the
Company in various positions since 1968 and
was a director of the Company from 1987 to
1993.
Xxx X. Xxxxxxxx Xx. Xxxxxxxx has been a Vice President since
1984. Xx. Xxxxxxxx has been a director of the
Company since 1995.
Xxxxxxx Xxxxxx Xx. Xxxxxx has been a Vice President of the
Company since 1992. Prior thereto, Xx. Xxxxxx
was Assistant Vice President. Xx. Xxxxxx has
been a director of the Company since 1996.
Facsimile copies of the Letter of Transmittal, properly completed and
duly executed, will be accepted. The Letter of Transmittal, Warrants and
any other required documents should be sent or delivered by each
warrantholder of the Company or such holder's broker, dealer, commercial
bank or trust company to the Depositary at its address set forth below.
The Depositary for the Offer is:
Continental Stock Transfer & Trust Company
By Mail, Hand or
By Facsimile Transmission: Overnight Delivery: For Information:
(000) 000-0000 Continental Stock Transfer & Trust (000) 000-0000
Attn: Reorganization Company
Department 0 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any questions or requests for assistance or for additional copies of
this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery or any other materials relating to the Offer may be directed to
the Dealer Manager. Warrantholders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning
the Offer.
The Dealer Manager for the Offer is:
Ladenburg Xxxxxxxx & Co. Inc.
(000) 000-0000
