ANTP Phazar Corp (MM)

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held On [____________, 2013]

 

To the Stockholders of PHAZAR CORP:

A special meeting of the stockholders of PHAZAR CORP, a Delaware corporation (“ PHAZAR ,” “ Company ,” “ we ,” “ us ” or “ our ”), will be held at the National Depository Office, located at 405 W. Loop 820 South, Suite 100, Fort Worth, Texas, on [__________________, 2013] , at 10:00 a.m., Central Time, for the following purposes:

1.

to consider and vote on a proposal to adopt the Agreement and Plan of Merger (the “ Merger Agreement ”), dated as of March 13, 2013, by and among PHAZAR, QAR Industries, Inc., a Texas corporation (“ Parent ”), and Antenna Products Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”), pursuant to which Merger Sub will merge with and into PHAZAR (the “ Merger ”), with PHAZAR surviving as a private company wholly-owned by Parent;

2.	to consider and vote on a proposal to adjourn the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the Merger Agreement; and

3.	to consider and vote on such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

A copy of the Merger Agreement is attached as Annex A to the accompanying Proxy Statement. Pursuant to the terms of the Merger Agreement, each share of PHAZAR common stock, par value $0.01 per share (the “ Common Stock ”), issued and outstanding immediately prior to the effective time of the Merger other than shares held by Robert E. Fitzgerald and Concorde Equity II, LLC, a Delaware limited liability company wholly-owned by Mr. Fitzgerald and his minor children (the “ Fitzgerald Parties ”), and shares held by persons who have properly made and not withdrawn a demand for appraisal rights under Delaware law, will be converted into the right to receive $1.25 in cash. Such payment will be without interest and less any applicable withholding taxes.  Pursuant to an agreement between the Fitzgerald Parties and Parent, immediately prior to the effective time of the Merger, the Fitzgerald Parties will contribute the shares of Common Stock they own in exchange for stock of Parent.

Only holders of Common Stock of record as of the close of business on [____________, 2013] are entitled to notice of and to vote at the special meeting and any adjournment or postponement thereof. As of the record date, there were [ _______________ ] shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote on each matter properly brought before the special meeting.

Under Delaware law, holders of Common Stock who comply with certain procedural requirements will be entitled to appraisal rights with respect to the Merger. Such appraisal rights are addressed in detail in the section entitled “Rights of Appraisal” in the Proxy Statement.

The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock. Abstentions or failures to vote will have the same effect as votes cast in opposition to adoption of the Merger Agreement.  If you hold your shares in “street name” with a broker, your broker will not be able to vote your shares without receiving voting instructions from you.  Accordingly, if you fail to provide voting instructions to your broker, this will have the same effect as a vote cast in opposition to adoption of the Merger Agreement.

 

 

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Meeting costs, including the costs of preparing and mailing the Proxy Statement and proxy, will be borne by the Company. The Company will also request banks, brokers, and others who hold shares of the Company in nominee names to distribute annual reports and proxy soliciting materials to beneficial owners, and will reimburse such banks and brokers for reasonable out-of-pocket expenses which they may incur in so doing.

Any adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies must be adopted by the affirmative vote of holders of a majority of the shares of our Common Stock present in person or by proxy and voting at the special meeting. Properly executed proxy cards with no instructions indicated on the proxy card will be voted “FOR” the adoption of the Merger Agreement and “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies.

Your vote is important and we urge you to complete, sign, date and return your proxy card as promptly as possible by mail in the accompanying reply envelope, whether or not you expect to attend the special meeting. If you are unable to attend in person and you return your proxy card, your shares will be voted at the special meeting in accordance with your proxy. You may also submit your proxy by telephone or via the internet by following the instructions included with your proxy card. If your shares are held in “street name” by your broker or other nominee, only that holder can vote your shares unless you obtain a valid legal proxy from such broker or nominee. You should follow the directions provided by your broker or nominee regarding how to instruct such broker or nominee to vote your shares. Your prompt attention is greatly appreciated.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying Proxy Statement.

We urge you to read the accompanying Proxy Statement carefully as it sets forth details of the proposed merger and other important information related to the Merger.

By: Order of the Board of Directors
Deborah Inzer
Secretary
Mineral Wells, Texas
__________________, 2013

 

 

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TABLE OF CONTENTS
SUMMARY TERM SHEET	1
The Parties to the Merger Agreement	1
The Merger Proposal	1
Rollover Agreement	2
The Special Meeting	2
Record Date and Quorum	2
Required Vote; Voting Agreement	2
No Golden Parachute Payments	3
Loan	3
Conditions to the Merger	3
When the Merger Will be Completed	4
Recommendation of the Board of Directors; Fairness of the Merger	4
Opinion of ValueScope, Inc.	4
Purpose and Reasons for the Merger	5
Interests of PHAZAR's Directors and Executive Officers in the Merger	5
Purchases	5
Financing	6
Material United States Federal Income Tax Considerations	6
Anticipated Accounting Treatment of the Merger	6
Rights of Appraisal (Annex B)	6
No Solicitation; Changes in Board Recommendation	7
Termination	7
Changes from Term Sheet to Merger Agreement	8
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER	10
What is the Merger?	10
What will I be entitled to receive in the Merger?	10
Where and when is the special meeting?	10
What matters will be voted on at the special meeting?	10
What vote of our stockholders is required to adopt the Merger Agreement?	10
What vote of our stockholders is required to approve the Adjournment Proposal?	11
How does the Board recommend that I vote?	11

 

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What effects will the Merger have on PHAZAR?	11
What happens if the Merger is not consummated?	11
What do I need to do now?	12
Should I send in my stock certificates or other evidence of ownership now?	12
Can I revoke my proxy?	12
What does it mean if I get more than one proxy card or voting instruction card?	13
Who will count the votes?	13
Who can help answer my other questions?	13
SPECIAL FACTORS	14
Background to the Merger	14
Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger	21
Valuation of Common Stock by ValueScope, Inc.	27
Parent's Purpose and Reasons for the Merger	38
Parent's, Merger Sub's, and the Fitzgerald Parties' Position as to Fairness of the Merger	38
Purposes and Reasons for, and Plans for the Company after, the Merger	41
Certain Effects of the Merger	42
Financing	45
Interests of PHAZAR's Directors and Executive Officers in the Merger	45
No Golden Parachute Payments	46
Material United States Federal Income Tax Considerations	47
Regulatory Approvals	48
Anticipated Accounting Treatment of the Merger	48
Fees and Expenses	48
Litigation	49
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION	49
THE PARTIES TO THE MERGER	51
Company	51
Parent	51
Merger Sub	51
THE SPECIAL MEETING	52
Date, Time and Place	52
Record Date and Quorum	52

 

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Required Vote	52
Voting; Proxies; Revocation	53
Abstentions	55
Adjournments and Postponements	55
Solicitation of Proxies	55
THE MERGER AGREEMENT	56
Structure of the Merger	56
When the Merger Becomes Effective	56
Effect of Merger on the Common Stock	56
Treatment of Stock Options	56
Payment of the Common Stock in the Merger	57
Representations and Warranties	57
Conduct of Business Pending the Merger	59
Other Covenants and Agreements	61
Conditions to the Merger	62
Termination of the Merger Agreement	63
Specific Performance; Amendments and Waivers	65
AGREEMENTS INVOLVING COMMON STOCK; TRANSACTIONS BETWEENPARENT AND THE COMPANY AND MR. FITZGERALD AND THE COMPANY	66
Agreements Involving Common Stock	66
Transactions between Parent and the Company	66
Transactions between Mr. Fitzgerald and the Company	67
PROVISIONS FOR UNAFFILIATED STOCKHOLDERS	68
IMPORTANT INFORMATION CONCERNING PHAZAR	68
Company Background	68
Directors and Executive Officers	68
Additional Business and Financial Information Regarding the Company	70
Book Value Per Share	70
Market Information for the Common Stock	70
Holders of Record	70
Dividends	70
Security Ownership of Certain Beneficial Owners and Management	71

 

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Transactions in Common Stock	72
RIGHTS OF APPRAISAL	73
Filing Written Demand	73
Notice by the Surviving Corporation	75
Filing a Petition for Appraisal	75
Determination of Fair Value	75
MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS	77
SUBMISSION OF STOCKHOLDER PROPOSALS	77
WHERE YOU CAN FIND ADDITIONAL INFORMATION	77

 

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SUMMARY TERM SHEET

This Summary Term Sheet discusses the material information contained in this Proxy Statement including, with respect to the Merger Agreement and the Merger, each as defined below. We encourage you to read carefully this entire Proxy Statement, including its annexes.  The items in this Summary Term Sheet include section references (by section heading and sub-heading, as appropriate) directing you to a more complete description of that topic in this Proxy Statement.

 

The Parties to the Merger Agreement

PHAZAR CORP

101 S.E. 25 th Avenue

Mineral Wells, Texas 76067

Tel: (940) 325-3301

PHAZAR CORP, a Delaware corporation (“ PHAZAR ,” the “ Company ,” “ we ,” “ our ,” or “ us ”), operates as a holding company with Antenna Products Corporation (“ APC ”), PHAZAR Antenna Corp. (“ PAC ”) and Thirco, Inc. (“ Thirco ,” and together with APC and PAC, the “ Subsidiaries ”) as its wholly-owned subsidiaries. PHAZAR has no other business activity. For a more detailed discussion of PHAZAR’s business activities, see “ Important Information Concerning PHAZAR—Company Background”.

QAR Industries, Inc.

2204 Vaquero Estates Boulevard

Westlake, Texas 76262

Tel: (940) 445-2325

QAR Industries, Inc., a Texas corporation (“ Parent ”), is wholly-owned by Robert E. Fitzgerald, President, Chief Executive Officer, and a Director of the Company (“ Mr. Fitzgerald ”), and Concorde Equity II, LLC, a Delaware limited liability company owned by Mr. Fitzgerald and his minor children (“ Concorde ,” and together with Mr. Fitzgerald, the “ Fitzgerald Parties ”). Pursuant to the terms of a Rollover Agreement with Parent (the “ Rollover Agreement ”), the Fitzgerald Parties will contribute all of their outstanding shares of the Company’s common stock (the “ Common Stock ”) that they beneficially own to Parent immediately before the time that the Merger (as defined below) becomes effective (the “ Effective Time ”) in exchange for stock of Parent. Parent has not engaged in any business other than in connection with the Merger and other related transactions. For further discussion as to PHAZAR’s business activities, s ee “ The Parties to the Merger—Parent .”

Antenna Products Acquisition Corp.

2204 Vaquero Estates Boulevard

Westlake, Texas 76262

Tel: (940) 445-2325

Antenna Products Acquisition Corp. , a Delaware corporation (“ Merger Sub ”), is a wholly-owned subsidiary of Parent and was formed solely for the purpose of engaging in the Merger. For further discussion as to Merger Sub, s ee “ The Parties to the Merger—Merger Sub .”

 

The Merger Proposal

At the special meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger (as amended, the “ Merger Agreement ”), dated as of March 13, 2013, by and among the Company, Parent, and Merger Sub. The Merger Agreement provides that, subject to the conditions set forth therein, Merger Sub will be merged with and into the Company (the “ Merger ”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent, and each outstanding share of the Company’s common stock, par value $0.01 per share (the “ Common Stock ”), other than shares owned by the Fitzgerald Parties and shares owned by holders who have properly made and not withdrawn a demand for appraisal rights, will be converted into the right to receive $1.25 in cash. Such payment will be without interest and less any required withholding taxes.  Following the completion of the Merger, the Common Stock will no longer be publicly traded, and you will cease to have any ownership interest in the Company. For further discussion, see “Special Factors—Certain Effects of the Merger.”

 

 

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Rollover Agreement

In connection with the Merger, the Fitzgerald Parties have entered into an agreement (the (“ Rollover Agreement ”) with Parent, pursuant to which the Fitzgerald Parties committed to contribute, immediately prior to the Merger, all of the shares of Common Stock owned by them to Parent in exchange for stock in Parent.  The purpose of the Rollover Agreement is to enable the Fitzgerald Parties to exchange their Common Stock for stock of Parent in a non-taxable transaction.  Through their post-Merger ownership of the stock of Parent, which will own 100% of the stock of the Company upon completion of the Merger, the Fitzgerald Parties will benefit from the rewards, and bear the risks of the sole ownership of the Company following the Merger.   See “ Agreements Involving Common Stock; Transactions Between Parent and the Company and Mr. Fitzgerald and the Company—Agreements Involving Common Stock—Rollover Agreement .”

 

The Special Meeting

The special meeting will be held at the National Depository Office, 405 W. Loop 820 South, Suite 100, Fort Worth, Texas on [__________________, 2013] , at 10:00 a.m., Central Time.

 

Record Date and Quorum

Holders of record of the Common Stock as of the close of business on [____________, 2013] are entitled to receive notice of and to vote at the special meeting.

The presence at the special meeting, in person or by proxy, of the holders of a majority of shares of Common Stock outstanding on the record date will constitute a quorum, permitting the Company to conduct its business at the special meeting.

 

Required Vote; Voting Agreement

For the Company to complete the Merger, under Delaware law, holders of a majority of the shares of the Common Stock outstanding at the close of business on the record date must vote FOR the adoption of the Merger Agreement. A failure to vote your shares of Common Stock or an abstention from voting will have the same effect as a vote against the Merger Agreement.

As of the record date, there were [_____________] shares of Common Stock outstanding, of which approximately [_____________] shares, or 6.7%, are owned by Gary W. Havener (“ Havener ”), Chairman of PHAZAR’s Board of Directors (the “ Board ”), and Sinan Corp., a Nevada corporation (“ Sinan ”), which is wholly-owned by Havener and his children (together, collectively with Sinan, the “ Havener Parties”) . The Havener Parties have entered into a voting agreement with Parent (the “ Voting Agreement ”), dated as of March 13, 2013, pursuant to which they have agreed, among other things, to vote all of the shares of Common Stock owned by them in favor of the adoption of the Merger Agreement.  The purpose of the Voting Agreement was to serve as an inducement to Parent to enter into the Merger Agreement, as the effect of the Voting Agreement is to assure Parent that at least 6.7% of the outstanding shares of Common Stock not held by the Fitzgerald Parties will be voted in favor of the Merger Agreement.   See “ Agreements Involving Common Stock; Transactions Between Parent and the Company and Mr. Fitzgerald and the Company—Agreements Involving Common Stock—Voting Agreement .” As of the record date, the Fitzgerald Parties collectively owned 275,227 shares, or approximately 11.8% of the total number of shares of Common Stock outstanding as of the record date.  It is expected that all of the shares owned by the Fitzgerald Parties will be voted in favor of the adoption of the Merger Agreement.

 

 

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Except in their capacities as members of the Board, no officer or director of the Company has made any recommendation either in support of or in opposition to the Merger or the Merger Agreement.

 

No Golden Parachute Payments

None of PHAZAR’s executive officers are receiving any compensation contingent upon the closing of the Merger. Consequently, there is no stockholder approval of executive compensation under Section 14A of the Exchange Act required.

 

Loan

In connection with the execution of the Merger Agreement, Parent made a loan to the Company   (the “ Loan ”).  The Loan has a principal amount of $500,000, bears interest at a rate of 4.25% per annum, is secured by real property owned by the Company’s wholly-owned subsidiaries, Antenna Products Corporation and Thirco, Inc., and matures on the earlier of the date of any termination of the Merger Agreement and July 31, 2013.   The purpose of the Loan was to address the Company’s immediate short-term financing needs.  Prior to the execution of the Merger Agreement, the Company was relying on contractual prepayments to meet its liquidity needs, which was an unsustainable path due to the highly uncertain nature of the amount and timing of these prepayments and because the Company will have partially offsetting expenses in connection with fulfilling the terms of the contracts associated with the prepayments. Accordingly, the independent directors and Parent believed that absent the Loan, the Company would not have sufficient cash to fund operations through the Merger completion date.

 

Conditions to the Merger

Each party’s obligation to complete the Merger is subject to the satisfaction of the following conditions:

●	the Merger Agreement must be approved by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock; and

 

●	no court or governmental order or other law preventing the Merger shall be in effect.

 

The obligation of the Company to complete the Merger is subject to the satisfaction or waiver of the following conditions:

●	accuracy in all material respects of the representations and warranties of Parent and Merger Sub set forth in the Merger Agreement; and

 

●	performance in all material respects by Parent and Merger Sub of their obligations under the Merger Agreement.

 

 

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The respective obligations of Parent and Merger Sub to complete the Merger are subject to the satisfaction or waiver of the following conditions:

●	accuracy in all material respects of the representations and warranties of the Company set forth in the Merger Agreement;

 

●	performance in all material respects by the Company of its obligations under the Merger Agreement;

 

●	absence of any material adverse effect on the Company;

 

●	receipt of all required third party consents or approvals unless the failure to obtain any such consent or approval is not reasonably likely to materially and adversely impact the value of the Company to Parent; and

 

●	the Company shall not be in default of the repayment terms of the Loan.

 

See further discussion at “The Merger Agreement—Conditions to the Merger ”.

 

When the Merger Will be Completed

We anticipate completing the Merger by July 31, 2013, subject to approval of the Merger Agreement by the Company’s stockholders and the satisfaction of the other closing conditions. There can be no assurances that the Merger will be completed at all, or if completed, by July 31, 2013.

 

Recommendation of the Board of Directors; Fairness of the Merger

The Board acted without the involvement of Mr. Fitzgerald, who abstained and recused himself from all discussions relating to the Merger and the Merger Agreement. The four other members of the Board—Gary W. Havener (who is also Chairman of the Board), James Kenney, Michael Young, and Thomas Reynolds—are independent directors as defined by NASDAQ Marketplace Rule 5605(a)(2) and Securities and Exchange Commission (“ SEC ”) Rule 10A-3(b)(1). The Board, acting through its four independent members, unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the Merger Agreement. Because of the ability to act through its four independent members, the Board did not find it necessary to appoint a special committee of the Board to consider the Merger Agreement and the Merger. For a description of the reasons considered by the Board, see Special Factors—Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merge r .

 

Opinion of ValueScope, Inc.

ValueScope, Inc. (“ ValueScope ”) delivered a written valuation analysis of the  Common Stock as of March 11, 2013, (the “ Valuation Opinion ”) to the Board, which concluded that, as of March 11, 2013 (the “ Valuation Date ”), and based upon and subject to the procedures followed, assumptions made, qualifications and limitations on its review undertaken and other matters considered by ValueScope, the fair value of the Common Stock is $1.19 per share. ValueScope delivered the Valuation Opinion to the Board for the benefit and use of the Board in connection with and for purposes of its evaluation of the Merger consideration from a financial point of view. The Valuation Opinion did not address any other aspect of the Merger.  The Board expressly adopted the analysis and discussion in the Valuation Opinion as its own. For further discussion of the Valuation Opinion, including the definition of “fair value” ValueScope used for purposes of its opinion, see “Special Factors—Valuation of Common Stock by ValueScope, Inc.”

 

 

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Purpose and Reasons for the Merger

The purpose of the Merger is to enable Parent and the Fitzgerald Parties to acquire 100% control of the Company in a transaction in which the Company’s stockholders, other than the Fitzgerald Parties, will be cashed out in exchange for $1.25 per share, so that Parent and the Fitzgerald Parties will benefit from the rewards, and bear the risks, of sole ownership of the Company after the Merger, including any future earnings and growth of the Company as a result of improvements to the Company’s operations or acquisitions of other businesses, which could increase the value of the Company, as well as the possibility that the Company’s losses will continue, and that its operations will fail to improve, following the Merger, which could further reduce the value of the Company.  In addition, the Merger will enable the Company’s stockholders other than the Fitzgerald Parties to realize the value of their investment in the Company through their receipt of the per share Merger consideration of $1.25 in cash, representing a premium over the per share value of the Common Stock on February 15, 2013, at $1.18, the last trading day before the signing of the term sheet which was the basis for the Merger Agreement, as well as a premium over the per-share fair value calculated by ValueScope of $1.19.  For additional information regarding the term sheet, see “Summary Term Sheet—Changes from Term Sheet to Merger Agreement.”

Further, by the Company entering into the Merger Agreement, Parent agreed to provide the Company with the Loan, which was necessary, in the judgment of the Board (other than Mr. Fitzgerald, who abstained and recused himself from all discussions relating to the Loan), to the continuation of the Company’s day-to-day operations.  In calendar year 2012 and the first calendar quarter of 2013, the Company’s cash flow steadily depleted to such an extent that the Company’s ability to continue operations was jeopardized. In the fourth calendar quarter of 2012 and the beginning of the first calendar quarter of 2013, the Board considered and pursued numerous alternative approaches to alleviate the Company’s cash flow problems, but none of those alternatives proved to be viable. Faced with the prospect of either ceasing operations or seeking protection under the U.S. Bankruptcy Code, either of which would most likely have resulted in all stockholders suffering a substantial or complete loss on their investment, the Board considered the Merger Agreement to be the best alternative. For further discussion, see “Special Factors—Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger” and for additional information concerning liquidity, see “Important Information Concerning PHAZAR—Additional Business and Financial Information Regarding the Company—Liquidity Update.”

 

Interests of PHAZAR’s Directors and Executive Officers in the Merger

In considering the Merger and the Merger Agreement, you should be aware that, other than the possibility that some executive officers will continue to be employed by the Company following the Merger, none of the Company’s directors and executive officers (other than Mr. Fitzgerald) have interests in the Merger other than their interests as stockholders generally, as described in the section “ Special Factors—Interests of PHAZAR’s Directors and Executive Officers in the Merger—Payments of Merger Consideration to Directors and Executive Officers ”.

 

Purchases

The shares of Common Stock owned by the directors and officers of the Company other than Mr. Fitzgerald (_____ shares in the aggregate) will be acquired in the Merger in the same manner, and at the same price of $1.25 per share in cash, as the shares of Common Stock held by all other stockholders of the Company generally.  For information regarding the specific number of shares currently held by each director and officer of the Company and the aggregate Merger consideration that will be paid for such shares, see “Special Factors—Interests of PHAZAR’s Directors and Executive Officers in the Merger.”

 

 

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Financing

The funds required for the Merger consideration will be provided by Parent. The Merger is not contingent on Parent receiving financing.  The total amount of funds necessary to complete the Merger, including the payment of the Merger consideration to the Company’s stockholders other than the Fitzgerald Parties pursuant to the Merger Agreement, the funding of the Loan and the payment of legal and other expenses incurred by Parent and the Fitzgerald Parties, is expected to be approximately [$3,169,000].  This includes [$2,569,000] for the aggregate Merger consideration, based on the [________] outstanding shares held by stockholders other than the Fitzgerald Parties as of the voting record date for the special meeting and the Merger consideration of $1.25 per share, the previously-funded Loan amount of $500,000 and estimated expenses of $100,000.

 

Material United States Federal Income Tax Considerations

If you are a U.S. holder of the Common Stock, the receipt of cash in the Merger will generally be a taxable transaction for U.S. federal income tax purposes. For U.S. federal income tax purposes, your receipt of cash in exchange for your shares of Common Stock will generally cause you to recognize a gain or loss in an amount equal to the difference, if any, between the cash you receive in the Merger and your adjusted basis in your shares. If you are a non-U.S. holder of the Common Stock, you generally will not be subject to United States federal income tax unless you have certain connections to the United States. You should consult your tax advisor for a full understanding of the tax consequences of the Merger in your particular circumstances.   For further discussion, see “Special Factors—Material United States Federal Income Tax Considerations.”

 

Anticipated Accounting Treatment of the Merger

PHAZAR, as the surviving corporation, will account for the Merger as a business combination using the purchase method of accounting for financial accounting purposes, whereby the estimated purchase price will be allocated to the assets and liabilities of PHAZAR based on their relative fair values following FASB Accounting Standards Codification Topic 805, Business Combinations .

 

Rights of Appraisal ( Annex B )

Under Delaware law, holders of Common Stock who do not vote in favor of the adoption of the Merger Agreement, who properly demand appraisal of their shares of Common Stock and who otherwise comply with the requirements of Section 262 of the General Corporation Law of the State of Delaware (the “ DGCL ”), will be entitled to seek appraisal for, and obtain payment in cash for the judicially determined fair value of, their shares of Common Stock in lieu of receiving the Merger consideration if the Merger is completed, but only if they comply with all applicable requirements of Delaware law . This value could be more than, the same as, or less than the Merger consideration. Any holder of Common Stock intending to exercise appraisal rights, among other things, must submit a written demand for appraisal to us prior to the vote on the proposal to adopt the Merger Agreement, must not vote in favor of adoption  of the Merger Agreement and must otherwise strictly comply with all of the procedures required by Delaware law.   These procedures are described in greater detail under “Rights of Appraisal” and the relevant provisions of the DGCL are included as Annex B to this Proxy Statement. You are encouraged to read these provisions carefully and in their entirety. Moreover, due to the complexity of the procedures for exercising the right to seek appraisal, stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with these provisions will result in loss of the right of appraisal.

 

 

No Solicitation; Changes in Board Recommendation

Cash Flow Projections March 2013-May 2013 (in thousands of dollars)
	March	April	May
Backlog
Beginning Backlog	2,686	2,636	2,728
Bookings	600	600	600
Shipments	(650)	(508)	(675)
End Backlog	2,636	2,728	2,653
Accounts Receivable	584	452	753
Cash Receipts – Goods Shipped	496	650	508
Cash Disbursements
Antenna Products
Inventory/Cost of Goods Sold	(195)	(152)	(203)
All Other Expenses	(335)	(310)	(310)
Material Thales Tilt Order	0	(75)	(75)
Ad Valorem Taxes	0	0	0
Mesh Disc Ops Liab	0	0	(114)
	(530)	(537)	(702)
Phazar Corp.
Corporation Business	(26)	(26)	(26)
Tracciare	0	0	0
Total Disbursements	(556)	(563)	(728)
Net Cash Movement	(60)	87	(220)
Beginning Cash	322	262	349
Ending Cash	262	349	129

Method	Indicated Value (Per Share)
Discounted Cash Flow Method	$1.10
Guideline Public Company Method	$1.35
Merger and Acquisition Method	$1.21
Stock Price	$1.22
Term Sheet Offer	$1.25

Guideline Public Company Method

 

The first step in the Guideline Public Company Method was the identification and selection of comparable companies. To be included in the sample, such companies needed to be engaged in the same or similar line of business and face similar industry and economic risks as the Company at the Valuation Date. ValueScope identified ten companies to use in its analysis. Those companies and their respective enterprise values are presented in the table below :

Company (Ticker)	Enterprise Value
Anaren, Inc. (ANEN)	$235,848,280
Aviat Networks, Inc. (AVNW)	$138,392,966
Comtech Telecommunications Corp. (CMTL)	$280,550,170
Conolog Corp. (CNLG)	$1,213,950
Microwave Filter Co. Inc. (MFCO)	$1,078,150
PCTEL, Inc. (PCTI)	$73,137,454
Powerwave Technologies Inc. (PWAV.Q)	$275,357,840
RELM Wireless Corp. (RWC)	$18,495,250
TESSCO Technologies Inc. (TESS)	$180,661,390
Ubiquiti Networks, Inc. (UBNT)	$1,094,743,570

	Ticker	EV/Sales	EV/EBITDA	EV/EBIT
1	Anaren, Inc.	1.57	9.85	16.38
2	Aviat Networks, Inc.	0.29	10.48	21.62
3	Comtech Telecom Corp.	0.74	4.48	6.00
4	Conolog Corp.	1.19	NMF	NMF
5	Microwaver Filter Co. Inc.	0.28	NMF	NMF
6	PC Tel Inc.	0.88	15.04	NMF
7	Powerwave Technologies, Inc.	1.47	NMF	NMF
8	RELM Wireless Corp.	0.67	4.35	6.39
9	TESSCO Technologies, Inc.	0.23	5.39	5.99
10	Ubquiti Networks, Inc.	3.39	10.56	10.68
	Mean	1.07	8.60	11.18
	Median	0.81	9.85	8.54
	Range	0.23 - 3.39	4.35 – 21.62	5.55 – 21.62

Date	Target	Acquirer	Transaction Size ($mm)	EV/ Sales	EV/ EBITDA	EV/ EBIT
10/31/12	Pro Brand International, Inc.	Sandmartin International Holdings Limited	29.4	0.17	NA	NA
08/09/12	Sabre Industries, Inc.	Kohlberg & Company, L.L.C.; Kohlberg Investors	295.0	0.80	NA	NA
05/15/12	ANTONE Wireless Corporation	Westell Technologies, Inc.	6.0	3.00	NA	NA
11/29/11	Commercial Microwave Technology, Inc.	API Technologies Corp.	8.2	1.03	3.28	NA
06/12/11	EMS Technologies, Inc.	Honeywell International Inc.	565.5	1.38	12.71	25.32
02/04/11	Endwave Corporation	GigOptix, Inc.	24.9	0.08	NA	NA
11/24/10	CPI International, Inc.	Veritas Capital; Veritas Capital Fund IV, L.P.	569.6	1.46	9.00	11.09
05/15/10	EF Johnson Technologies, Inc.	Francisco Partners Management, LLC; Francisco Pa	55.6	0.42	NA	NA
05/03/10	Trimax Wireless, Inc.	Infrax Systems, Inc.	10.0	8.30	NA	NA
04/16/09	M/A-COM Private Radio Systems, Inc.	RF Communications, Inc.	664.3	1.43	7.72	9.91
08/14/08	PCTEL Antenna Products Group, Inc.	Sigma Wireless Technology Limited	0.7	0.46	NA	NA
			Mean	1.69	8.18	15.44
			Median	1.03	8.36	11.09
			Range	0.08-8.30	3.28-12.71	9.91-25.32

Valuation Method	Indicated Value	Shares Out (000s)	Per Share Indicated Value	Weight
Income Approach
Discounted Cash Flow Method	$2,559	2,325	$1.10	30%
Market Approach
Guideline Public Company Method	$3,130	2,325	$1.35	10%
Merger and Acquisition Method	$2,823	2,325	$1.21	10%
Stock Price	$2,836	2,325	$1.22	20%
Term Sheet Offer	$2,906	2,325	$1.25	10%
Cost Approach
Orderly Liquidation Value	$2,694	2,325	$1.16	20%
Equity Value – Control, Marketable	$2,759		$1.19	100%
Share Price – Control, Marketable			$1.19

Name and Title	Number of Shares	Aggregate Merger Consideration
Gary W. Havener, Chairman	156,950	$196,187.50
James Kenney, Director	15,600	$19,500
Thomas Reynolds, Director	9,900	$12,375
Michael F. Young, Director	2,200	$2,750
Deborah A. Inzer, Chief Financial Officer	3,000	$3,750

Compensation of the Independent Directors

For their service as independent Directors of the Board for purposes of the Merger, Mr. Havener, Mr. Reynolds, Mr. Kenney, and Mr. Young received no compensation other than the regular compensation paid to Directors for attending meetings of the Board of Directors. Mr. Havener received no additional compensation for his service as “Chairman” of the independent directors.

 

No Golden Parachute Payments

None of PHAZAR’s executive officers are receiving any compensation contingent upon the closing of the merger. Consequently, there is no stockholder approval of executive compensation under Section 14A of the Exchange Act required.

 

Material United States Federal Income Tax Considerations

The following is a general discussion of the material U.S. federal income tax consequences of the Merger to U.S. holders (as defined below) of Common Stock whose shares are converted into the right to receive the Merger consideration. This discussion does not address U.S. federal income tax consequences with respect to non-U.S. holders. We base this summary on the provisions of the Internal Revenue Code of 1986, as amended (the “ Code ”), applicable U.S. Treasury Regulations, judicial authority, and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis. This discussion is not binding on the Internal Revenue Service or the courts and, therefore, could be subject to challenge, which could be sustained. No ruling is intended to be sought from the Internal Revenue Service with respect to the Merger.

For purposes of this discussion, we use the term “ U.S. holder ” to mean a beneficial owner of Common Stock that is:

●	a citizen or individual resident of the U.S. for U.S. federal income tax purposes;

●	a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S. or any state or the District of Columbia;

●	a trust if it (1) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

●	an estate the income of which is subject to U.S. federal income tax regardless of its source.

This discussion assumes that a U.S. holder holds the shares of Common Stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income tax that may be relevant to a U.S. holder in light of its particular circumstances, or that may apply to a U.S. holder that is subject to special treatment under the U.S. federal income tax laws (including, for example, insurance companies, dealers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting for their securities, U.S. holders subject to the alternative minimum tax, persons that have a functional currency other than the U.S. dollar, tax-exempt organizations, financial institutions, mutual funds, certain expatriates, corporations that accumulate earnings to avoid U.S. federal income tax, U.S. holders who hold shares of Common Stock as part of a hedge, straddle, constructive sale or conversion transaction, U.S. holders who will hold, directly, indirectly or constructively, an equity interest in the surviving corporation or U.S. holders who acquired their shares of Common Stock through the exercise of employee stock options or other compensation arrangements). In addition, the discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010 (which is generally effective for taxable years beginning after December 31, 2012), nor does it address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax that may apply to U.S. holders. U.S. holders are urged to consult their own tax advisors to determine the tax consequences in their particular circumstances, including the application and effect of any state, local or foreign income and other tax laws, of the receipt of cash in exchange for Common Stock pursuant to the Merger.

 

 

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If a partnership holds Common Stock, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. If you are a partner of a partnership holding Common Stock, you should consult your tax advisor.

The receipt of cash in the Merger by U.S. holders of Common Stock will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder of Common Stock will recognize gain or loss in an amount equal to the difference between:

●	the amount of cash received in exchange for the Common Stock; and

●	the U.S. holder’s adjusted tax basis in the Common Stock.

If the holding period in Common Stock surrendered in the Merger is greater than one year as of the date of the Merger, the gain or loss will be long-term capital gain or loss. Long term capital gains of non-corporate holders, including individuals, are eligible for reduced rates of taxation. The deductibility of a capital loss recognized on the exchange is subject to limitations. If a U.S. holder acquired different blocks of Common Stock at different times and different prices, such holder must determine its adjusted tax basis and holding period separately with respect to each block of Common Stock.

Under the Code, a U.S. holder of Common Stock may be subject, under certain circumstances, to information reporting on the cash received in the Merger unless such U.S. holder is a corporation or other exempt recipient. Backup withholding will also apply (currently at a rate of 28%) with respect to the amount of cash received, unless a U.S. holder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. holder’s U.S. federal income tax liability, if any, provided that such U.S. holder furnishes the required information to the Internal Revenue Service in a timely manner.

 

Regulatory Approvals

There are no regulatory approval requirements with respect to the Merger.

 

Anticipated Accounting Treatment of the Merger

PHAZAR, as surviving corporation, will account for the Merger as a business combination using the purchase method of accounting for financial accounting purposes, whereby the estimated purchase price would be allocated to the assets and liabilities of PHAZAR based on their relative fair values following FASB Accounting Standards Codification Topic 805, Business Combinations.

 

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Fees and Expenses

The estimated fees and expenses incurred or expected to be incurred in connection with the Merger are as follows:

Description		Amount
Valuation opinion fees		$	24,250
Legal fees and expenses		$	[$95,294	]
Proxy solicitation expenses		$	[2,600	]
SEC filing fees		$	351
Printing and mailing costs		$	[8,000	]
Paying agent fees		$	[15,023	]
Total		$	[145,518	]

In addition, it is expected that Parent will incur approximately $100,000 of expenses, including legal fees and expenses.

Except as provided in the Merger Agreement, all costs and expenses incurred in connection with the Merger, the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring or required to incur such expenses.

 

Litigation

At the time of this Proxy Statement, the Company knows of no lawsuits filed against it or its Directors in connection with its operations or the Merger.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This Proxy Statement includes “forward-looking statements” that reflect our current views as to future events and financial performance with respect to our operations, the expected completion and timing of and other information relating to the Merger. These statements do not relate strictly to historical or current facts. There are forward-looking statements throughout this Proxy Statement, including, among others, under the headings “ Summary Term Sheet ,” “ Questions and Answers About the Special Meeting and the Merger ,” “ The Special Meeting ,” “ Special Factors ,” and “ Important Information Concerning PHAZAR ,” and in statements containing the words “aim,” “anticipate,” “are confident,” “estimate,” “expect,” “will be,” “will continue,” “will likely result,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning while describing future operating or financial performance or other future events. You should be aware that forward-looking statements involve known and unknown risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that the actual results or developments we anticipate will be realized, or even if realized, that they will have the expected effects on the business or operations of the Company. These forward-looking statements speak only as of the date on which the statements were made and we undertake no obligation to update or revise any forward-looking statements made in this Proxy Statement as a result of new information, future events or otherwise, except as required by law. In addition to other factors and matters contained in this document, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

 

 

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●	the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

●	the outcome of any legal proceedings that may be instituted against the Company and others relating to the Merger Agreement;

●	the inability to complete the Merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to consummation of the Merger;

●	the failure of the Merger to close for any other reason;

●	the risk that the pendency of the Merger disrupts current plans and operations and the potential difficulties in employee retention as a result of the pendency of the Merger;

●	the effect of the announcement of the Merger on our business relationships, operating results and business generally;

●	the amount of the costs, fees, expenses and charges related to the Merger; and

●

and other risks associated with our business, including but not limited to: our ability to develop and implement new products and sell our existing products and services; the level of demand for our products and services; customer concentrations, including the fact that the Company’s largest customer is the United States government and that fiscal issues affecting the U.S government could negatively impact orders placed with the Company; our ability to remain competitive; our ability to address our cash flow challenges; and fluctuations in general economic conditions.  Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We cannot guarantee any future results, levels of activity, performance or achievements.

 

 

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THE PARTIES TO THE MERGER

The parties to the Merger Agreement are the Company, Parent and Merger Sub .

 

Company

For information regarding PHAZAR, see “ Important Information Concerning PHAZAR — Company Background.”

 

Parent

QAR Industries, Inc., a Texas corporation, is wholly-owned by Mr. Fitzgerald, President, Chief Executive Officer, and a director of the Company, and Concorde Equity II, LLC, a Delaware limited liability company owned by Mr. Fitzgerald and his minor children. Pursuant to the terms of the Rollover Agreement, the Fitzgerald Parties will contribute all of their outstanding shares of the Company’s Common Stock that they beneficially own to Parent immediately before the Effective Time. Parent has not engaged in any business other than in connection with the Merger and other related transactions, including the Loan.

 

Merger Sub

Antenna Products Acquisition Corp., a Delaware corporation, is a wholly-owned subsidiary of Parent and was formed solely for the purpose of engaging in the Merger.

 

 

Submit a Proxy Card

  If you complete, sign, date and return the enclosed proxy card by mail so that it is received before the special meeting, your shares will be voted in the manner directed by you on your proxy card.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the Merger Agreement and the Adjournment Proposal, if necessary or appropriate. If you fail to return your proxy card, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting (unless you are a record holder as of the record date and attend the special meeting in person) and will have the same effect as a vote against the adoption of the Merger Agreement, but will not affect the vote on the Adjournment Proposal, if necessary or appropriate.

 

If your shares are held by a bank, broker or other nominee on your behalf in “street name,” your bank, broker or other nominee will send you instructions as to how to provide voting instructions for your shares by proxy. Many banks and brokerage firms have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by proxy card.

Banks, brokers and other nominees who hold shares of Common Stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the adoption of the Merger Agreement. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owner of such shares they may not vote such shares with respect to the adoption of the Merger Agreement.  Any such unvoted shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement, but will have no effect on the Adjournment Proposal, if necessary or appropriate. For shares of Common Stock held in “street name,” only shares of Common Stock affirmatively voted “FOR” adoption of the Merger Agreement and “FOR” the Adjournment Proposal, if necessary or appropriate, will be counted as a favorable vote for such proposals .

 

 

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Revocation of Proxies

Your proxy is revocable. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

submitting a new proxy with a later date, by using the telephone or Internet proxy submission procedures described above, or by completing, signing, dating and returning a new proxy card by mail to the Company;

attending the special meeting and voting in person; or

sending written notice of revocation to the Corporate Secretary of PHAZAR at PHAZAR  CORP, Attn: Deborah Inzer, 101 S.E. 25th Avenue, Mineral Wells, Texas 76067.

Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the day of the special meeting.

If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee in order to revoke your proxy or submit new voting instructions.

 

Abstentions

Abstentions will be included in the calculation of the number of shares of Common Stock represented at the special meeting for purposes of determining whether a quorum has been achieved. Abstaining from voting will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement and “AGAINST” the Adjournment Proposal.

 

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies. In the event that there is present, in person or by proxy, sufficient favorable voting power to secure the vote of the stockholders of the Company necessary to adopt the Merger Agreement, the Company does not anticipate that it will adjourn the special meeting unless it is advised by counsel that failure to do so could reasonably be expected to result in a violation of applicable law. Any signed proxies received by the Company in which no voting instructions are provided on such matter will be voted in favor of an adjournment in these circumstances. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

 

Solicitation of Proxies

We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding Common Stock. We may solicit proxies by mail, personal interview, e-mail, telephone, or via the Internet, which may be done by directors, officers and employees of the Company and its subsidiaries without additional compensation.  Parent and the Fitzgerald Parties may also solicit proxies.  The Company has retained Computershare Investor Services, a proxy solicitation firm, to assist it in the solicitation of proxies for the special meeting and will pay a customary fee of $3,000, plus reimbursement of out-of-pocket expenses.

 

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THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger Agreement, a copy of which is attached to this proxy statement as Annex A , and which we incorporate by reference into this Proxy Statement. This summary may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read carefully the Merger Agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this Proxy Statement .

 

Structure of the Merger

At the Effective Time (as defined below) of the Merger, Merger Sub will merge with and into the Company and the separate corporate existence of Merger Sub will cease. The Company will survive the Merger as a wholly-owned subsidiary of Parent and will remain a Delaware corporation. At the Effective Time, the certificate of incorporation and bylaws of the Company will be amended and restated in their entirety (except for the name of the Company, which will remain the same unless determined otherwise by Parent) to read in the forms of the certificate of incorporation and bylaws, respectively, of Merger Sub in effect immediately prior to the Effective Time.   The directors and officers of Merger Sub immediately prior to the Effective Time will become the directors and officers of the Company at the Effective Time.

 

When the Merger Becomes Effective

The Merger will close on a date no later than the fifth business day after the satisfaction or waiver of the closing conditions stated in the Merger Agreement or at such other time as the parties may mutually agree. The Merger will become effective at the time, which we refer to as the “Effective Time” of the Merger, when the Company files a certificate of merger with the Secretary of State of the State of Delaware or at such later date or time as the parties agree to specify in the certificate of merger.

 

Effect of Merger on the Common Stock

At the effective time of the Merger, each issued and outstanding share of the Common Stock outstanding immediately prior to the effective time of the Merger, except for any “Cancelled Shares,” and any “Dissenting Shares” (as those terms are described below) will be converted automatically into and will represent the right to receive $1.25 in cash.

Each share that is held by the Company, Parent, Merger Sub or the Fitzgerald Parties immediately prior to the effective time of the Merger (the “ Cancelled Shares ”) will, by virtue of the Merger and without any action on the part of the holder of such shares, be cancelled and will cease to exist, and no consideration will be delivered in exchange for such cancellation.  Each share of Common Stock that is owned by a stockholder who does not vote in favor of the Merger Agreement but perfects appraisal rights under Section 262 of the DGCL (the “ Dissenting Shares ”) will by virtue of the Merger and without any action on the part of the holder of such shares, be cancelled and cease to exist, and consideration for such shares will be defined by Section 262 of the DGCL.

At the Effective Time, each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time (all of which are owned by Parent) will be converted into and become one share of the common stock of the Company, as the surviving corporation in the Merger.

 

Treatment of Stock Options

Each Company stock option granted under the Company’s stock plans that is outstanding immediately prior to the Effective Time, other than any such options held by Mr. Fitzgerald, will, as of the Effective Time, be converted into the right to receive an amount equal to the product of (a) the total number of shares of Common Stock subject to such option and (b) the excess, if any, of the Merger consideration over the exercise price per share of Common Stock subject to such option (or if there is not any such excess, zero) less such amounts as are required to be withheld or deducted under applicable tax provisions. Since the exercise price of all such options is greater than the $1.25 per share Merger consideration, no amounts will be paid for such options, all of which will be cancelled as of the Effective Time.  Each stock option held by Mr. Fitzgerald immediately prior to the Effective Time will automatically be cancelled as of the Effective Time, with no consideration payable for such cancellation.

 

 

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Payment of the Common Stock in the Merger

As promptly as practicable after the Effective Time of the Merger, Parent will deposit, or cause to be deposited, with an entity selected by Parent, and reasonably acceptable to the Company, to act as paying agent, sufficient cash to pay to the holders of the Common Stock the Merger consideration of $1.25 per share. As soon as reasonably practicable following the Effective Time, the paying agent is required to mail to each record holder of shares of Common Stock that were converted into the Merger consideration a letter of transmittal and instructions for use in effecting the surrender of certificates that formerly represented shares of the Common Stock or non-certificated shares represented by book-entry in exchange for the Merger consideration.   Do not send in your stock certificates until you have received the letter of transmittal and follow the instructions on where to send your certificates.

 

Representations and Warranties

The Merger Agreement contains representations and warranties of each of the Company and of Parent and Merger Sub as to, among other things:

●	corporate organization, existence and good standing, including, as to the Company, with respect to its subsidiaries;

●	corporate power and authority to enter into the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement;

●	absence of any required regulatory filings and authorizations, consents or approvals of governmental entities; and

●	the absence of certain violations, defaults or consent requirements under certain contracts, organizational documents and law, in each case arising out of the execution and delivery of, and consummation of the transactions contemplated by, the Merger Agreement.

The Merger Agreement also contains representations and warranties of the Company as to, among other things:

●

the capitalization of the Company and the absence of certain rights to purchase or acquire equity securities of the Company of any of its subsidiaries other than options granted under the Company’s stock plans and the absence of any bonds or other obligations allowing holders the right to vote with stockholders of the Company;

●	the accuracy and compliance of the Company’s filings with the SEC and of financial statements included in the SEC filings;

●	the absence of certain undisclosed liabilities for the Company and its subsidiaries;

 

 

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●	compliance with laws and possession of necessary permits and authorizations by the Company and its subsidiaries;

●	environmental matters and compliance with environmental laws by the Company and its subsidiaries;

●	the Company’s employee benefit plans and other agreements with its employees;

●	the absence of a Company Material Adverse Effect (as defined below) since June 30, 2012 and no incurrence of material liabilities or obligations for borrowed funds since December 31, 2012 other than the Loan;

●	the absence of certain litigation, orders and judgments and governmental proceedings and investigations related to the Company and its subsidiaries;

●	the payment of taxes, the filing of tax returns and other tax matters related to the Company and its subsidiaries;

●	labor matters related to the Company and its subsidiaries;

●	good title to property owned by the Company and its subsidiaries and validity of leases;

●	intellectual property owned or licensed sufficient for the conduct of the Company’s and its subsidiaries’ businesses;

●	insurance policies of the Company and its subsidiaries;

●	the receipt by the Board of a valuation opinion of ValueScope, Inc.;

●	the vote of stockholders required to adopt the Merger Agreement;

●	material contracts of the Company and its subsidiaries;

●	the absence of events or occurrences giving rise to indemnity claims;

●	state takeover statutes and charter provisions; and

●	the absence of any fees owed to investment bankers or brokers in connection with the Merger, other than ValueScope, Inc..

The Merger Agreement also contains representations and warranties of Parent and Merger Sub as to, among other things:

●	Parent’s ownership of Merger Sub and the absence of any conduct of business by Merger Sub other than in connection with the transactions contemplated by the Merger Agreement; and

●	Parent having as of the closing date of the Merger sufficient funds available to pay the Merger consideration.

 

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Some of the representations and warranties in the Merger Agreement are subject to materiality qualifications or, in the case of the Company’s representations and warranties, a “Company Material Adverse Effect” clause. For purposes of the Merger Agreement, a “Company Material Adverse Effect” means, with respect to the Company, a material adverse effect on (i) the business, assets, results of operations, properties, condition (financial or otherwise) or prospects of the Company and its subsidiaries taken as a whole ( provided , however, that, with respect to this clause (i), a “Company Material Adverse Effect” shall not be deemed to include effects arising out of, relating to or resulting from (A) changes in generally accepted accounting principles (GAAP), (B) changes in laws, rules or regulations of general applicability to companies in the industries in which the Company and its subsidiaries operate, (C) changes in global, national or regional political conditions or general economic or market conditions (including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets) affecting other companies in the industries in which the Company and its subsidiaries operate, (D) changes in the credit markets, any downgrades in the credit markets, or adverse credit events resulting in deterioration in the credit markets generally or in respect of the customers of the Company and its subsidiaries, (E) failure to meet earnings projections or internal financial forecasts, but not including any underlying causes thereof, (F) the public disclosure of the Merger Agreement or the Merger or the consummation of the transactions contemplated by the Merger Agreement, (G) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism or (H) actions or omissions taken with the prior written consent of Parent or expressly required or permitted by the Merger Agreement except, with respect to clauses (A), (B) and (C), to the extent that the effects of such change are disproportionately adverse to the business, assets, results of operations, properties, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole, as compared to other companies in the industry in which the Company and its subsidiaries operate) or (ii) the ability of the Company to timely consummate the Merger.

The representations and warranties of the Company have been made solely for the benefit of Parent and Merger Sub, and vice versa, and these representations and warranties should not be relied on by any other person. In addition, these representations and warranties:

●	have been qualified by information set forth in confidential disclosure schedules in connection with signing the Merger Agreement—the information contained in these schedules modifies, qualifies and creates exceptions to the representations and warranties in the Merger Agreement;

●	will not survive consummation of the Merger;

●	may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the Merger Agreement if those statements turn out to be inaccurate;

●	are in some cases subject to the materiality qualifications described above and set forth in the Merger Agreement which may differ from what may be viewed as material by you; and

●	were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement.

 

Conduct of Business Pending the Merger

The Merger Agreement provides that, except as expressly contemplated or permitted by the Merger Agreement or as required by applicable law or governmental entity, or with the prior written consent of Parent, during the period from the date of the Merger Agreement to the Effective Time, the Company shall, and shall cause each of its subsidiaries to, (a) conduct its business in the ordinary course consistent with past practice in all material respects, (b) use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships, and (c) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of the parties to consummate the Merger.

 

 

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The Merger Agreement further provides that, without the prior written consent of Parent, the Company may not, and may not permit any of its subsidiaries to:

●

issue or sell, or authorize the creation of, any additional shares of its capital stock, other ownership interests or any rights to acquire stock or voting debt securities, except for issuances of shares of Common Stock to directors of the Company for attendance and board and board committee meetings consistent with past practice;

●	except for the Loan, issue any other capital securities, voting debt securities or other debt securities or otherwise incur any indebtedness;

●	pay any dividends or other distributions on its capital stock, other than dividends from wholly owned subsidiaries to the Company or to another wholly owned subsidiary of the Company;

●

(i) enter into, modify, renew or terminate any employment, consulting, severance or similar agreement or arrangement with any director, officer or employee, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments) other than (A) at will agreements, (B) normal increases in salary to rank and file employees, (C) severance in accordance with past practice and (D) changes that are required by applicable law; (ii) hire any new officers; or (iii) promote any employee to a rank of vice president or higher;

●	except as required by law, establish, modify, renew or terminate any employee benefit plan or accelerate the vesting of benefits under any employee benefit plan;

●	sell, transfer or encumber any of its assets, except in the ordinary course of business consistent with past practice, and in the case of a sale or transfer, at fair value;

●

enter into, modify or renew any service provider agreement or any lease,  license or maintenance agreement relating to real or personal property or intellectual property except in the ordinary course of business consistent with past practice and other than any annual renewal of an agreement that is necessary to operate its business in the ordinary course consistent with past practice, or to permit to lapse its rights in any material intellectual property;

●	merge or consolidate with any other person or acquire the assets or equity of any other person, excluding goods purchased in the ordinary course of business consistent with past practice;

●	adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;

●	amend its organizational documents or similar governing documents;

●	materially change its accounting principles, practices or methods, except as may be required by GAAP;

 

 

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●	enter into, materially modify, terminate or renew any material contract;

●	settle any legal claims involving an amount in excess of $10,000, excluding amounts paid or reimbursed under any insurance policy;

●	make capital expenditures outside the limits specified in the Merger Agreement;

●	invest in any new or existing joint venture or any new real estate development or construction activity;

●	accelerate or delay the payment of any material accounts payable or extend or agree to extend the payment terms of any accounts receivable;

●	revalue in any material respects any of its assets, including writing down the value of inventory or writing down notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as may be consistent with GAAP;

●	make any charitable or similar contributions;

●	develop, market or implement any new line of business; or

●	make, change or revoke any material tax election (other than in a manner consistent with prior elections), materially amend any tax return, enter into any material tax closing agreement, or settle any material liability with respect to disputed taxes

 

Other Covenants and Agreements

Access and Information

The Merger Agreement provides that the Company generally will provide Parent, from time to time prior to the Effective Time, such information as Parent shall reasonably request with respect to the Company and its subsidiaries and their respective businesses, financial conditions and operations and such access to the properties, books and records and personnel of the Company and its subsidiaries as Parent shall reasonably request.

No Solicitation; Changes in Board Recommendation

Pursuant to the Merger Agreement, neither the Company nor any of its subsidiaries may solicit any third party “acquisition proposal,” which is defined in the Merger Agreement to mean any tender or exchange offer, proposal for a merger, consolidation or other business combination, or any proposal or offer to acquire in any manner more than 20% of the voting power in, or more than 20% of the fair market value of the business or assets of the Company or any of its subsidiaries.  If the Company receives an unsolicited acquisition proposal (including any communication expressing an interest in possibly making such a proposal) from a third party and the Board (excluding Mr. Fitzgerald, who must abstain and recuse himself from any such discussions) determines in good faith that the proposal may result in a “superior proposal,” the Company may, after obtaining a confidentiality agreement adequate to protect the Company’s interests:

●	provide to such third party nonpublic information sufficient to allow it to conduct a due diligence investigation, including access to the Company’s books and records and the opportunity to visit the Company’s plant and property; and

 

 

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●	participate in negotiations or other discussions with the third party;

in each case to the extent that the Board (excluding Mr. Fitzgerald) concludes in good faith, and based on the advice of counsel, that the failure to do so would be reasonably likely to violate the Board’s fiduciary duty to the Company’s stockholders.  A “superior proposal” is defined in the Merger Agreement to mean a written acquisition proposal that the Board (excluding Mr. Fitzgerald, who must abstain and recuse himself from any such discussions) concludes in good faith to be more favorable than the Merger from a financial point of view to the Company’s stockholders other than the Fitzgerald Parties, after receiving the advice of its financial advisor, after taking into account the likelihood of consummation of the proposed transaction and after taking into account all legal, financial (including the financing terms of the proposal), regulatory and other aspects of the proposal and any other relevant factors permitted under applicable law, provided that the references to “more than 20%” in the definition of “acquisition proposal” are deemed to be references to “more than a majority.”

The Company will update Parent as to the status any such discussions and disclose the terms of any potential transaction arising from such discussions.

The Merger Agreement generally prohibits the Board from withdrawing or modifying its recommendation that the Company’s stockholders adopt the Merger Agreement and from making a public announcement of its intention to do so.  The Board may withdraw or modify its recommendation if the Board (excluding Mr. Fitzgerald, who must abstain and recuse himself from any such discussions) determines in good faith based on the advice of counsel that because of special circumstances, including receipt of a third party proposal that the Board concludes in good faith is a superior proposal, it would be reasonably likely to violate its fiduciary duty to the Company’s stockholders to continue to recommend the Merger Agreement.  Before the Board can withdraw or modify its recommendation or terminate the Merger Agreement to enter into an agreement for a superior proposal (see “The Merger Agreement—Termination of the Merger Agreement”) , (i) the Company must give Parent at least five business days to respond to any such special circumstances, including any superior proposal, and (ii) the Board must consider Parent’s response.

Employee Matters

Parent will not be obligated to honor the Company’s benefit plans in accordance with their terms as in effect immediately before the Effective Time, and nothing in the Merger Agreement will be construed to amend or terminate such plans or limit the right of the Company or Parent from amending or terminating such plans in accordance with their terms. Further, nothing in the Merger Agreement will be construed as requiring Parent or the surviving corporation to continue (or resume) the employment of any employee at any time or prohibiting Parent or the Company, as the surviving corporation of the Merger, from terminating the employment of any employee at any time.

 

Conditions to the Merger

Each party’s obligation to complete the Merger is subject to the satisfaction of the following conditions:

●	the Merger Agreement must have been adopted by the affirmative vote of holders of a majority of the outstanding shares of Common Stock; and

 

 

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●	no order, injunction or decree issued by any court of competent jurisdiction or governmental entity or other law preventing or making illegal the consummation of the Merger shall be in effect.

The obligation of the Company to complete the Merger is subject to the satisfaction or waiver of the following conditions:

●	the representations and warranties of Parent and Merger Sub set forth in the Merger Agreement shall be true and correct in all material respects as of the date of the Merger Agreement and as of the Effective Time as though made on and as of the Effective Time;

 

●	Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Time; and

●	The Company shall have received a certificate signed on behalf of Parent and Merger Sub by an officer of Parent and Merger Sub that the conditions set forth above have been satisfied.

The respective obligations of Parent and Merger Sub to complete the Merger are subject to the satisfaction or waiver of the following conditions:

●	The representations and warranties of the Company set forth in the Merger Agreement shall be true and correct in all material respects as of the date of the Merger Agreement and as of the Effective Time as though made on and as of the Effective Time;

 

●	The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time;

 

●

from the period beginning on the date of the Merger Agreement, there shall not have been any, or been any worsening of any pre-existing, state of facts, event, change, effect, development, condition or occurrence  that, individually or in the aggregate, has had or could reasonably be expected to have a Company Material Adverse Effect;

●

all consents or approvals of all persons required for or in connection with the execution, delivery and performance of the Merger Agreement, the accuracy of the representations and warranties thereunder and the consummation of the Merger shall have been obtained and shall be in full force and effect, unless the failure to obtain any such consent or approval is not reasonably likely to materially and adversely impact the value of the Company to Parent;

 

●	the Company shall not be in default of the repayment terms of the Loan; and

 

●	the Company shall have delivered to Parent a certificate signed on behalf of the Company by the Chief Financial Officer of Company that the conditions set forth above have been satisfied.

 

Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the Effective Time, whether before or after the Merger Agreement is adopted by the Company’s stockholders, by:

●	mutual consent of the Company and Parent in a written instrument authorized by the Board (excluding Mr. Fitzgerald, who must abstain and recuse himself from such discussions) and the board of directors of Parent;

 

 

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●	either the Company or Parent if the Merger is prohibited by ruling of a court or governmental authority; provided, however, that a party may not terminate the Merger Agreement for this reason if such a ruling is a result of that party’s failure to perform any covenant in the Merger Agreement;

●	either the Company or Parent if the Merger has not been completed by July 31, 2013, and the terminating party has not caused the failure to consummate the Merger on or before that date;

●

either the Company or Parent, provided that the terminating party is not then in material breach of any term in the Merger Agreement, if there shall have been a breach of any term of the Merger Agreement on the part of the non-terminating party, which breach would result in a failure to satisfy the conditions of the terminating party to complete the Merger, and such breach is not or cannot be cured within twenty days following written notice; or

●

either the Company or Parent if the Merger Agreement has been submitted to our stockholders for approval and the required vote has not been obtained, provided that Parent is not entitled to terminate the Merger Agreement due to the Board’s failure to maintain its recommendation that the Company’s stockholders adopt the Merger Agreement or due to a material breach by the Company of the non-solicitation provision, as described below.  If the Merger Agreement is terminated due to the failure to obtain stockholder approval and prior to termination a third party acquisition proposal has been publicly announced, then if within 270 days after termination the Company either enters into a definitive agreement for the proposal or consummates the proposal, the Company must pay Parent a termination fee equal to three percent of the aggregate transaction value of the proposal, plus the expenses incurred in connection with the Merger Agreement by Parent and the Fitzgerald Parties up to $100,000. For purposes of this termination fee provision, the references to 20% in the definition of “acquisition proposal” are deemed to be 50%.

Parent may also terminate the Merger Agreement if:

●	the Board fails to recommend the Merger Agreement to the stockholders or changes its recommendation in a manner adverse to Parent; or

●	the Company materially breaches the non-solicitation provision in the Merger Agreement. ( S ee “The Merger Agreement—Other Covenants and Agreements ”.)

If Parent terminates the Merger Agreement under these circumstances, the Company must pay Parent a termination fee of $100,000.

The Company may also terminate the Merger Agreement prior to the adoption of the Merger Agreement by the Company’s stockholders in order to enter into an agreement for a superior proposal, provided that the Company has not materially breached the non-solicitation provision in the Merger Agreement and has first given Parent at least five business days to respond to the superior proposal.  If the Company terminates the Merger Agreement under this circumstance, it must pay Parent a termination fee equal to three percent of the aggregate transaction value of the superior proposal, plus the expenses incurred in connection with the Merger Agreement by Parent and the Fitzgerald Parties up to $100,000.

 

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Specific Performance; Amendments and Waivers

The Merger Agreement provides that the parties are entitled to seek specific performance and any other remedy at law or equity to enforce the terms of the Merger Agreement.

The Merger Agreement may be amended by the parties, by action taken or authorized by their respective boards of directors (excluding Mr. Fitzgerald, in the case of the Company’s Board), at any time before or after adoption of the Merger Agreement by the stockholders of the Company; provided , however, that after adoption of the Merger Agreement by the stockholders of the Company, there may not be, without further approval of such stockholders, any amendment of this Agreement that requires further approval under applicable law. The Merger Agreement may not be amended except by an instrument signed on behalf of each of the parties.

At any time prior to the Effective Time, the parties, by action taken or authorized by their respective Board of Directors (excluding Mr. Fitzgerald, in the case of the Company’s Board), may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties contained in the Merger Agreement or (c) waive compliance with any of the agreements or conditions contained in the Merger Agreement.

 

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AGREEMENTS INVOLVING COMMON STOCK; TRANSACTIONS BETWEEN PARENT AND

THE COMPANY AND MR. FITZGERALD AND THE COMPANY

 

Agreements Involving Common Stock

Rollover Agreement between Fitzgerald Parties and Parent

In connection with the Merger, the Fitzgerald Parties entered into an agreement (the (“ Rollover Agreement ”) with Parent, dated as of March 13, 2013, pursuant to which the Fitzgerald Parties committed, subject to certain conditions, including the satisfaction or waiver of all conditions to consummation of the Merger set forth in the Merger Agreement, to contribute, immediately prior to the Effective Time, 275,277   shares of Common Stock, which represents all of the shares of Common Stock owned by them as of the date of the Rollover Agreement, to Parent in exchange for stock in Parent. In the event the Merger Agreement is terminated prior to the Effective Time, the Rollover Agreement will automatically terminate and no longer be in effect.

A copy of the Rollover Agreement is attached to this Proxy Statement as Annex C and is incorporated by reference into this Proxy Statement. The summary of the Rollover Agreement in the preceding paragraph does not purport to be complete and may not contain all of the information about the Rollover Agreement that may be important to you. We encourage you to read the Rollover Agreement carefully and in its entirety.

Voting Agreement between Havener Parties and Parent

As an inducement to Parent to enter into the Merger Agreement, concurrent with the execution of the Merger Agreement, Mr. Havener, and Sinan Corp., which is wholly-owned by Mr. Havener and his children (collectively referred to as the “ Havener Parties ”) entered into a voting agreement with Parent, dated as of March 13, 2013 (the “ Voting Agreement ”) pursuant to which the Havener Parties agreed, subject to certain conditions, to vote all of the shares owned by them at the time of any stockholder meeting at which the Merger Agreement will be voted upon in favor of adoption of the Merger Agreement. The Havener Parties further agreed, with limited exceptions, not to sell, transfer or otherwise dispose of any shares of Common Stock until after the meeting of the Company’s stockholders to vote on the adoption of the Merger Agreement.  The Voting Agreement will terminate with any termination of the Merger Agreement is terminated. As of the record date, the Havener Parties owned [_________________] shares of the Common Stock, representing approximately [__%] of total shares outstanding.

 

Transactions between Parent and the Company

Loan

In connection with the execution of the Merger Agreement, in order to address the Company’s short-term financing needs, Parent made the Loan to the Company.  The Loan has a principal amount of $500,000, bears interest at a rate of 4.25% per annum, is secured by real property owned by the Company’s wholly-owned subsidiaries, Antenna Products Corporation and Thirco, Inc., and matures on the earlier of the date of any termination of the Merger Agreement and July 31, 2013.

 

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Transactions between Mr. Fitzgerald and the Company

Mr. Fitzgerald Employment Agreement

The Company entered into an employment agreement (the “ Employment Agreement ”) with Mr. Fitzgerald concerning Mr. Fitzgerald’s employment as President and Chief Executive Officer of the Company, effective October 1, 2012. The Employment Agreement provided for an annual salary of $180,000, and options to purchase 160,000 shares of Common Stock at an exercise price per share of $2.01, vesting annually over the course of a five-year period beginning September 30, 2013 and ending September 30, 2017. As discussed under “The Merger Agreement—Treatment of Stock Options,” all of Mr. Fitzgerald’s stock options will be cancelled at the Effective Time and he will not be paid any consideration for such cancellation.

 

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PROVISIONS FOR UNAFFILIATED STOCKHOLDERS

No provision has been made (i) to grant the Company’s unaffiliated stockholders access to the corporate files of the Company, any other party to the Merger Agreement or any of their respective affiliates, or (ii) to obtain for the Company’s unaffiliated stockholders counsel or appraisal services at the expense of the Company, any other such party or affiliate.

 

IMPORTANT INFORMATION CONCERNING PHAZAR

 

Company Background

The Company was incorporated in 1991 and operates as a holding company with Antenna Products Corporation, PHAZAR Antenna Corp. and Thirco, Inc. as its wholly-owned subsidiaries. Antenna Products Corporation and PHAZAR Antenna Corp. are operating subsidiaries with Thirco, Inc. serving as an equipment leasing company to the Company’s operating units. Antenna Products Corporation designs, manufactures and markets standard and custom antennas, guyed and self-supported towers, support structures, masts and communication accessories worldwide. PHAZAR Antenna Corp. supplies a broad range of multiple band antennas for the telecommunication market for DAS (Distributed Antenna Systems). PHAZAR Antenna Corp. is a separate legal entity that currently operates as a small division of Antenna Products Corporation. The Company has no other business activity. The address for the Company is 101 S.E. 25th Avenue, Mineral Wells, Texas 76067. The telephone number is (940) 325-3301.

If the Merger Agreement is adopted by the PHAZAR stockholders at the special meeting and the Merger is completed as contemplated, PHAZAR will survive the Merger and will continue its operations as a private company and a wholly-owned subsidiary of Parent.

During the last five years, PHAZAR has not been (i) convicted in a criminal proceeding or (ii) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

For further information about the Company’s business, see the “Description of Business” in the Company’s Form 10-K, filed with the SEC on September 21, 2012, for the fiscal year ending on June 30, 2012, attached to this Proxy Statement as Annex E .

 

Directors and Executive Officers

The Board presently consists of five members, and only Mr. Fitzgerald will remain a director after the Merger. There is no indication that there will be any immediate changes in executive officers after the Merger is consummated.

The persons listed below are the executive officers and directors of the Company as of the date of this Proxy Statement. Each executive officer will serve until a successor is elected by the Board or until the earlier of his or her resignation or removal. None of these persons has been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors), and none of these persons has been a party to any judicial or administrative proceeding during the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws or a finding of any violation of federal or state securities laws. All of the directors and executive officers of the Company are citizens of the United States and can be reached c/o: PHAZAR CORP, 101 S.E. 25th Avenue, Mineral Wells, Texas 76067.

 

 

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Robert E. Fitzgerald was appointed Director, President and Chief Executive Officer of the Company on October 1, 2012. Mr. Fitzgerald served as Chief Executive Officer of Proxim Wireless (fka YDI/Terabeam) from March, 1999 until February, 2008. Mr. Fitzgerald has also served as a consultant to Ubiquiti Networks from April, 2008 until August, 2009, including a portion of such tenure as President. Mr. Fitzgerald is Chairman of the Board of SeeView Security, Inc., a Director of Steely Eye, Ltd. and is an officer and investor in a number of entities under the control or direction of QAR, LLC, including Parent and Merger Sub. Mr. Fitzgerald currently serves as President of QAR, LLC since February, 2008. QAR, LLC provides debt and equity capital to companies. Mr. Fitzgerald attended U.C.L.A and earned a degree in economics. Mr. Fitzgerald also attended U.C.L.A and received his Juris Doctorate. Mr. Fitzgerald has served as a director of PHAZAR CORP since October 1, 2012.

Gary E. Havener served as President of the Company from January 1992 until October 1999. Mr. Havener served as the President of Antenna Products Corporation from January 1996 until April 1999. Mr. Havener served as President and Chief Executive Officer of the Company and President of Tumche Corp. and Thirco, Inc. from June 2000 until October 2006. Mr. Havener also served as sole director of Antenna Products Corporation, PHAZAR Antenna Corp., Tumche Corp. and Thirco, Inc. until October 2006. Since December 1984, Mr. Havener has served as the President of Sinan Corp., an investment company. Sinan Corp. is not a parent, subsidiary or affiliate of the Company. Mr. Havener has served as a director of the Company since 1992.

James W. Kenney served as an account executive at Baldwin Anthony Securities, Inc. since February, 2009. Mr. Kenney served as Executive Vice President and owner of San Jacinto Securities, an institutional stock brokerage firm from 1993 until February, 2009. Mr. Kenney has served as a director of the Company since 1999.

Thomas B. Reynolds has served from 1999 to present as President of Reynolds Cattle Company. He was an Associate of Kline & Co., a Commercial and Investment Realtor company from 1989 until 2010. Mr. Reynolds has also held numerous prominent positions in varying capacities as Chairman of the Board, Fort Worth National Bank; Director, Fort Worth National Bank and Director, Fidelity Bank. Mr. Reynolds has served as a director of the Company since 2011.

Michael F. Young was founder and served as President and CTO of YDI Wireless, a publicly traded company specializing in broadband wireless data communication equipment and system from 1986 until 2004.  Mr. Young has worked in and held numerous positions in the telecommunications industry for more than 30 years. Mr. Young has operated Young Consulting Services, LLC since January, 2005 and offers consulting and engineering services to the wireless communications industry. Throughout the years he has taught computer science, electrical engineering and wireless communications classes at various colleges and universities part time. Currently he is an Adjunct Professor at George Mason University in Fairfax, Virginia.  Mr. Young holds a Bachelors’ Degree in Electrical Engineering from the Polytechnic Institute of Brooklyn and a Masters’ Degree in Radio and TV Broadcasting from Brooklyn College. Mr. Young has served as a director of the Company since November 2012.

Deborah Inzer has served as Vice President, Chief Financial Officer and Treasurer of the Company since March 2008. Ms. Inzer served as Controller of Shared Technologies, Inc., a telecommunications company from January, 2005 until March, 2008. Ms. Inzer served as Vice President, Accounting and Controller at Dave & Buster’s in Dallas, Texas from 1999 to 2005 and Senior Vice President, Accounting at AmBrit Energy Corp in Dallas, Texas from 1989 to 1999.

 

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Additional Business and Financial Information Regarding the Company

The Company’s Annual Report on Form 10-K, filed with the SEC on September 21, 2012, for the fiscal year ended June 30, 2012, along with the amendments thereto on Form 10-K/A filed February 19, 2013 and Form 10-K/A filed March 4, 2013, are attached hereto as “ Annex E ”, and the Company’s Quarterly Report on Form 10-Q, filed with the SEC on April 22, 2013, for the quarter ended March 31, 2013, is attached as “ Annex F ”.  These reports contain additional business and financial information regarding the Company, including its audited consolidated financial statements as of and for the fiscal years ended June 30, 2012 and 2011 and its unaudited consolidated financial statements as of and for the three and nine months ended March 31, 2013.  See also “ Where You Can Find Additional Information ”.

 

Book Value Per Share

Our net book value per share as of March 31, 2013 was $1.33 (calculated based on 2,330,337 shares outstanding as of such date) .

 

Market Information for the Common Stock

The Common Stock is traded on the NASDAQ Capital Market under the symbol “ANTP”.

The following table sets forth during the periods indicated the high and low sales prices of Common Stock:

Quarter Ended	High	Low
September 2011	3.09	1.60
December 2011	2.30	1.11
March 2012	3.11	1.68
June 2012	2.77	1.83
September 2012	2.57	1.50
December 2012	2.75	1.56
March 2013	2.23	1.10

The closing sale price of our Common Stock on February 15, 2013, which was the last trading day before the Board accepted the Proposal and the Term Sheet was signed, was $1.18 per share, compared to the per share Merger consideration of $1.25, which represents a premium to the February 15, 2013 closing price.

 

Holders of Record

At [______________, 2013] , there were approximately [_______] holders of record of the Common Stock.

 

Dividends

We have not declared any cash dividends on our Common Stock during the two most recent fiscal years and have no plans to do so in the foreseeable future. The Merger Agreement prohibits us from paying a dividend on the Common Stock without the prior consent of Parent. Our ability to pay dividends is also subject to limits imposed by Delaware law. In determining whether to declare dividends, the Board will consider the limits imposed by our financial condition, results of operations, working capital requirements, future prospects and other factors it considers relevant.

 

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the beneficial ownership of the Company’s Common Stock as of December 31, 2012 (a) by each director of the Company, (b) by the named executive officers, and (c) by all persons known to the Company to be the beneficial owners of more than 5% of the Company’s Common Stock and (d) all directors and executive officers as a group. The following table does not include de minimus number of unissued shares that, as of December 31, 2012, had been earned by each of the directors as compensation for participation in Board of Director meetings.

 

Name and Address		Shares Owned Directly		Percent of
of Beneficial Owners (1)		and Indirectly		Class (2)
Gary W. Havener (3)		153,150		6.59%
Sinan Corp.
P.O. Box 121969
Fort Worth, TX 76121
James Kenney		12,000		0.52%
4131 N. Central Expressway,
Suite 930
Dallas, TX 75204
Thomas Reynolds		6,500		0.28%
327 Bryan Avenue
Fort Worth, TX 76104
Deborah A. Inzer		3,000		0.13%
Antenna Products Corporation
101 S.E. 25th Avenue
Mineral Wells, TX 76067
Robert E. Fitzgerald (4)		275,227		11.8%
Concorde Equity II, LLC
2204 Vaquero Estates Boulevard
Westlake, TX 76262
Michael F. Young		-0-		0%
6246 Cottonwood St.
McLean, VA 22101
All directors and executive officers		449,877		19.36%
of the Company as a group

(1)	The persons named herein have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and subject to the Texas laws for personal holding companies, as applicable.

(2)	Based on total outstanding shares of 2,323,537 as of December 31, 2012.

(3)

Sinan Corp., wholly-owned by Mr. Havener and his children, owns of record 100,000 of these shares representing 4.18% of the total outstanding shares. Mr. Havener, as President of Sinan Corp. has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by Sinan Corp.

(4)	Based on shares, owned by Mr. Fitzgerald, individually and by Concorde Equity II, LLC, an entity owned by Mr. Fitzgerald and his minor children. Mr. Fitzgerald has sole voting and investment power with respect to all shares of common stock.

 

 

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Transactions in Common Stock

Other than the Rollover Agreement, as discussed in “ Agreements Involving Common Stock; Transactions Between Mr. Fitzgerald and the Company—Agreements Involving Common Stock—Rollover Commitment ”,  the Fitzgerald Parties, Parent, Merger Sub, and their respective affiliates have not made any transactions with respect to Common Stock during the past 60 days.   During the past 60 days, none of the directors and executive officers of the Company other than Mr. Fitzgerald made any transactions with respect to Common Stock, other than shares of Common Stock issued to the directors of the Company other than Mr. Fitzgerald in lieu of cash as part of their compensation for attending board meetings, as follows:  (i) 200 shares issued to each of Messrs. Havener, Kenney, Reynolds and Young on March 5, 2013 based on a price of $1.38 per share; (ii) 200 shares issued to each of Messrs. Havener, Kenney, Reynolds and Young on March 12, 2013 based on a price of $1.30 per share; (iii) 200 shares issued to each of Messrs. Havener, Kenney, Reynolds and Young on March 13, 2013 based on a price of $1.23 per share; (iv) 200 shares issued to each of Messrs. Havener, Kenney, Reynolds and Young on March 26, 2013 based on a price of $1.19 per share; (v) 200 shares issued to each of Messrs. Havener, Kenney, Reynolds and Young on March 29, 2013 based on a price of $1.15 per share; and (vi) 200 shares issued to each of Messrs. Havener, Reynolds and Young on April 25, 2013 based on a price of $1.17 per share.

 

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RIGHTS OF APPRAISAL

The following discussion summarizes the material terms of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, referred to as “Section 262,” which is attached to this Proxy Statement as Annex B . The following summary does not constitute legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262.

Under Section 262, holders of shares of capital stock of PHAZAR who do not vote in favor of the adoption of the Merger Agreement and who otherwise follow the procedures set forth in Section 262 will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Court, together with interest, if any, to be paid upon the amount determined to be the fair value.

Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This Proxy Statement shall constitute such notice, and the full text of Section 262 is attached to this Proxy Statement as Annex B .

ANY HOLDER OF CAPITAL STOCK OF PHAZAR WHO WISHES TO EXERCISE APPRAISAL RIGHTS, OR WHO WISHES TO PRESERVE SUCH HOLDER’S RIGHT TO DO SO, SHOULD CAREFULLY REVIEW THE FOLLOWING DISCUSSION AND ANNEX B BECAUSE FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES SPECIFIED WILL RESULT IN THE LOSS OF APPRAISAL RIGHTS. MOREOVER, BECAUSE OF THE COMPLEXITY OF THE PROCEDURES FOR EXERCISING THE RIGHT TO SEEK APPRAISAL OF SHARES OF CAPITAL STOCK OF PHAZAR, PHAZAR BELIEVES THAT, IF A STOCKHOLDER CONSIDERS EXERCISING SUCH RIGHTS, SUCH STOCKHOLDER SHOULD SEEK THE ADVICE OF LEGAL COUNSEL.

 

Filing Written Demand

Any holder of capital stock of PHAZAR wishing to exercise appraisal rights must, before the vote on the adoption of the Merger Agreement at the special meeting, deliver to PHAZAR a written demand for the appraisal of the stockholder’s shares and not vote in favor of the adoption of the Merger Agreement. A holder of capital stock wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective date of the Merger, since appraisal rights will be lost if the shares are transferred prior to the effective date of the Merger. The holder must not vote in favor of the adoption of the Merger Agreement. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the Merger Agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption and approval of the Merger Agreement or abstain from voting on the adoption of the Merger Agreement. Neither voting against the adoption  of the Merger Agreement, nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement, will in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption and approval of the Merger Agreement. The demand must reasonably inform PHAZAR of the identity of the holder as well as the intention of the holder to demand an appraisal of the “fair value” of the shares held by the holder. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement at the special meeting of stockholders will constitute a waiver of appraisal rights.

 

 

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Only a holder of record of shares of capital stock of PHAZAR is entitled to demand an appraisal of the shares registered in that holder’s name. A demand for appraisal in respect of shares of capital stock should be executed by or on behalf of the holder of record, fully and correctly, as the holder’s name appears on the holder’s stock certificates, should specify the holder’s name and mailing address and the number of shares registered in the holder’s name and must state that the person intends thereby to demand appraisal of the holder’s shares in connection with the Merger. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand should be made in that capacity, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners. If the shares are held in “street name” by a broker, bank or nominee, the broker, bank or nominee may exercise appraisal rights with respect to the shares held for one or more beneficial owners while not exercising the rights with respect to the shares held for other beneficial owners; in such case, however, the written demand should set forth the number of shares as to which appraisal is sought and where no number of shares is expressly mentioned the demand will be presumed to cover all shares of capital stock held in the name of the record owner. Stockholders who hold their shares in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

All written demands for appraisal pursuant to Section 262 should be sent or delivered to PHAZAR at:

PHAZAR  CORP

101 S.E. 25th Avenue

Mineral Wells, Texas 76067

Attn: Secretary

At any time within 60 days after the effective date of the Merger, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to PHAZAR, as the surviving corporation, a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective date of the Merger will require written approval of PHAZAR, as the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Court deems just; provided, however, that any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the Merger consideration offered pursuant to the Merger Agreement within 60 days after the effective date of the Merger. If PHAZAR, as the surviving corporation, does not approve a request to withdraw a demand for appraisal when that approval is required, or, except with respect to any stockholder who withdraws such stockholder’s right to appraisal in accordance with the proviso in the immediately preceding sentence, if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value determined in any such appraisal proceeding, which value could be less than, equal to or more than the consideration being offered pursuant to the Merger Agreeme nt.

 

 

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Notice by the Surviving Corporation

Within ten days after the effective date of the Merger, PHAZAR as the surviving corporation must notify each holder of capital stock of PHAZAR who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favor of the adoption and approval of the Merger Agreement, that the Merger has become effective.

 

Filing a Petition for Appraisal

Within 120 days after the effective date of the Merger, but not thereafter, PHAZAR as the surviving corporation or any holder of capital stock who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all dissenting holders. PHAZAR as the surviving corporation of the Merger is under no obligation to and has no present intention to file a petition and holders should not assume that PHAZAR as the surviving corporation will file a petition. Accordingly, it is the obligation of the holders of capital stock to initiate all necessary action to perfect their appraisal rights in respect of shares of capital stock within the time prescribed in Section 262. Within 120 days after the effective date of the Merger, any holder of capital stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from PHAZAR as the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within ten days after a written request therefor has been received by PHAZAR as the surviving corporation or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later. Notwithstanding the foregoing, a person who is the beneficial owner of shares of capital stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from PHAZAR as the surviving corporation the statement described in this paragraph.

If a petition for an appraisal is timely filed by a holder of shares of capital stock of PHAZAR and a copy thereof is served upon PHAZAR as the surviving corporation, PHAZAR as the surviving corporation will then be obligated within 20 days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded payment for their shares and whose shares are represented by certificates to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceeding; and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss the proceedings as to the stockholder.

 

Determination of Fair Value

After the Delaware Court of Chancery determines the holders of capital stock entitled to appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Court shall determine the “fair value” of the shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment.

 

 

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In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc. , the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods that are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “fair price obviously requires consideration of all relevant factors involving the value of a company”. The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the Merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the Merger”. In Cede & Co. v. Technicolor, Inc. , the Delaware Supreme Court stated that such exclusion is a “narrow exclusion that does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger , the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the Merger and not the product of speculation, may be considered”.

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined could be more than, the same as or less than the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that the opinion of ValueScope, Inc. as to the fair value per share of the Common Stock is not an opinion as to, and does not otherwise address, fair value under Section 262. Although PHAZAR believes that the Merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Merger consideration. Neither Parent, Merger Sub nor PHAZAR anticipate offering more than the applicable Merger consideration to any stockholder of PHAZAR exercising appraisal rights, and reserve the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of capital stock is less than the applicable Merger consideration. In addition, the Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenting stockholder’s exclusive remedy.

If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the action (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Court and taxed upon the parties as the Court deems equitable under the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by a stockholder in connection with an appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, to be charged pro rata against the value of all the shares entitled to be appraised.

If any stockholder who demands appraisal of shares of capital stock under Section 262 fails to perfect, successfully withdraws or loses such holder’s right to appraisal, the stockholder’s shares of capital stock will be deemed to have been converted at the effective date of the Merger into the right to receive the Merger consideration pursuant to the Merger Agreement. A stockholder will fail to perfect, or effectively lose, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the effective date of the Merger. In addition, a stockholder may withdraw the appraisal demand in accordance with Section 262 and accept the Merger consideration offered pursuant to the Merger Agreement.

 

 

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MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS

In accordance with Rule 14a-3(e)(1) under the Exchange Act, one Proxy Statement will be delivered to two or more stockholders who share an address, unless PHAZAR has received contrary instructions from one or more of the stockholders. PHAZAR will deliver promptly upon written or oral request a separate copy of the Proxy Statement to a stockholder at a shared address to which a single copy of the Proxy Statement was delivered. Requests for additional copies of the Proxy Statement, and requests that in the future separate Proxy Statements be sent to stockholders who share an address, should be directed to PHAZAR CORP, 101 S.E. 25 th Avenue, Mineral Wells, Texas 76067, Attn: Secretary, or by calling (940) 325-3301. In addition, stockholders who share a single address but receive multiple copies of the Proxy Statement may request that in the future they receive a single copy by contacting the Company at the address and phone number set forth in the prior sentence.

SUBMISSION OF STOCKHOLDER PROPOSALS

If the Merger is completed, we may not hold an annual meeting of stockholders in 2013. If the Merger is not completed, you will continue to be entitled to attend and participate in our annual meetings of stockholders and we will hold a 2013 annual meeting of stockholders, in which case we will provide notice of or otherwise publicly disclose the date on which such 2013 annual meeting will be held. If the 2013 meeting is held, stockholder proposals will be eligible for consideration for inclusion in the Proxy Statement and form of proxy for our 2013 annual meeting of stockholders in accordance with Rule 14a-8 under the Exchange Act and our Bylaws, as described below.

Any proposal that a stockholder wishes to include in proxy materials for our 2013 annual meeting of stockholders pursuant to SEC Rule 14a-8 must have been received no later than June 30, 2013 (unless the meeting date is changed by more than 30 days from the anniversary of the 2012 annual meeting, in which case a proposal must be received a reasonable time before we begin to print and send proxy materials) and must be submitted in compliance with the rule. Proposals should be directed to PHAZAR  CORP, Attn: Secretary, 101 S.E. 25th Avenue, Mineral Wells, Texas 76067.

Pursuant to SEC Rule 14a-4(c)(1), if our Secretary receives any stockholder proposal at the address listed above after August 25, 2013 (unless the date of the 2013 annual meeting of stockholders is changed by more than 30 days from the anniversary of the 2012 annual meeting, in which case a proposal must be received a reasonable time before we print proxy materials) that is intended to be presented at the 2013 annual meeting without inclusion in the Proxy Statement for the meeting, the proxies designated by the Board will have discretionary authority to vote on such proposal.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. You may find the Company’s most recent Annual Report on Form 10-K, as amended, and Quarterly Report on Form 10-Q attached to this Proxy Statement as Annex E and Annex F , respectively. You may also read and copy any reports, proxy statements or other information that we file with the SEC at the following location of the SEC:

Public Reference Room

100 F Street, N.E.

Washington, D.C. 20549

 

 

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Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. The Company’s public filings are also available to the public from document retrieval services and the Internet website maintained by the SEC at www.sec.gov.

Because the Merger is a “going private” transaction, the Company, Parent, Merger Sub and the Fitzgerald Parties have filed with the SEC a Transaction Statement on Schedule 13E-3 with respect to the Merger. The Schedule 13E-3, including any amendments and exhibits filed or incorporated by reference as a part of it, is available for inspection as set forth above. The Schedule 13E-3 will be amended to report promptly any material change in the information set forth in the most recent Schedule 13E-3 filed with the SEC.

 

No persons have been authorized to give any information or to make any representations other than those contained in this Proxy Statement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. This Proxy Statement is dated [________________, 2013] . You should not assume that the information contained in this Proxy Statement is accurate as of any date other than that date, and the mailing of this Proxy Statement to stockholders shall not create any implication to the contrary.