1
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
---------------------
CONTACT: Xxxxxx Xxxxx or Xxxxxx X. Xxxxxxxxx
Chairman, Video Sentry Corporation CEO, KNOGO North America Inc.
000-000-0000 000-000-0000
KNOGO AND VIDEO SENTRY ANNOUNCE MERGER AGREEMENT
- TWO TECHNOLOGICAL LEADERS IN SECURITY INDUSTRY JOIN FORCES TO COMBAT
COMMERCIAL AND RETAIL THEFT -
NEW YORK, NY, October 10, 1996 -- KNOGO North America Inc. (AMEX; KNA), a
leading manufacture of Electronic Article Surveillance (EAS) systems,
headquartered in Long Island, NY, and Video Sentry Corporation (Nasdaq: VSEN),
a pioneer in traveling video security, headquartered in Minneapolis, MN, today
announced they have signed a definitive merger agreement which will result in a
new publicly traded entity to be called Sentry Technology Corporation (Sentry).
The parties intend to apply for listing for Sentry common and preferred stock
on the NASDAQ National Market.
The merger between KNOGO and Video Sentry takes advantage of the
extensive knowledge and expertise both companies have in security systems.
Together they will offer a comprehensive line of security products by combining
KNOGO's patented EAS technology and renowned customer service with Video
Sentry's patented innovative CCTV systems technology.
Xxxxxx X. Xxxxxxxxx, president and CEO of KNOGO, commented, "Since
early 1995, we have been looking for a proven proprietary CCTV product line
with broad market applications that would complement our EAS product line.
Video Sentry not only has that product in Sentry Vision(TM), but we strongly
believe the product's cost, performance and market presence can be greatly
enhanced through the utilization of KNOGO's R&D, engineering, production,
sales, installation and service infrastructure. In addition, Sentry will be
able to offer the marketplace a new integrated EAS/CCTV product line at a time
when we believe business opportunities to be at their greatest. We see
Sentry's potential as far exceeding what either company would have achieved on
its own."
The merger agreement provides for Sentry, a newly-formed Delaware
corporation, to issue 1 share of common stock for each 1 share of Video Sentry
common stock outstanding at the effective time of the merger. Sentry will
issue 1 share of common stock and 1 share of Class A Preferred Stock for each
1.2022 shares of KNOGO common stock outstanding. As contemplated by the merger
2
KNOGO/VIDEO SENTRY MERGER
Page 2
agreement, the Sentry Class A Preferred Stock will have a face value of $5.00
per share and a dividend rate of 5.0% (the first two years of which are
paid-in-kind). The preferred will be non voting and subject to a mandatory
redemption four years from the date of issuance and optional redemption by
Sentry at any time after one year from the date of issuance. The redemption
price will be equal to $5.00 per preferred share (plus accrued and unpaid
dividends as of the redemption date) plus the amount, if any, by which the
market price of Sentry's common stock at the time of redemption exceeds $6.50
per share. The preferred stock is non convertible, but the redemption price
may, in certain circumstances, be paid in common stock at the company's option.
Following consummation of the merger, it is anticipated that there will be
approximately 9.6 million shares of Sentry common stock (51% owned by owner
Video Sentry shareholders and 49% owned by former KNOGO shareholders) and 4.8
million shares of Sentry Class A Preferred Stock outstanding, all owned by
former KNOGO shareholders.
The merger agreement also provides for Sentry's Board of Directors to
consist initially of two representatives each from Video Sentry and KNOGO, as
well as one additional director to be mutually agreed upon between the parties.
Xx. Xxxxxxxxx will be the CEO of Sentry. Xxxxxx Xxxxxx, the founder and
president of Video Sentry, will be Vice President, CCTV Products. The KNOGO
and Video Sentry boards have both unanimously approved the transaction.
It is expected that special shareholder meetings of both companies
will be held during the late fall. Consummation of the merger is subject to
approval by the holders of a majority of the outstanding common stock of each
company. It is intended that the merger qualify as a tax-free reorganization.
Commenting on the proposed merger, Xx. Xxxxxx said, "We are very
excited about the opportunities created by the combination of Video Sentry and
KNOGO. The resulting business entity will enjoy the benefits of a proprietary
and dynamic CCTV product line from Video Sentry, linked to the high quality
infrastructure present in KNOGO."
Video Sentry Corporation, founded in 1990, is the industry leader in
the design, manufacture and marketing of patented traveling CCTV surveillance
systems.
KNOGO designs, manufactures, sells and services EAS and Closed Circuit
Video equipment in the United States and Canada to deter shoplifting and other
types of theft for retailers, supermarkets,
3
KNOGO/VIDEO SENTRY MERGER
Page 3
libraries and commercial enterprises. KNOGO is a spin-off of KNOGO
Corporation, founder of the EAS industry 30 years ago.
# # # # #
