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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
AUDIOVOX CORPORATION
(Name of Issuer)
AUDIOVOX CORPORATION
(Name of Person(s) Filing Statement)
------------------------
Warrants to Purchase Class A Common Stock
(Title of Class of Securities)
------------------------
050757111
050757129
(CUSIP Number of Class of Securities)
------------------------
Charles M. Stoehr
AUDIOVOX CORPORATION
150 Marcus Blvd.
Hauppauge, NY 11788
(516) 231-7751
(Name, Address and Telephone Number of a Person Authorized to
Receive Notes and Communications on Behalf of the Person(s)
Filing Statement)
------------------------
Copies to:
Stuart H. Gelfond, Esq. Robert Levy, Esq.
Fried, Frank, Harris, Levy & Stopol
Shriver & Jacobson One Pennsylvania Plaza
One New York Plaza New York, NY 10119
New York, NY 10004 (212) 279-7007
(212) 859-8000
August 10, 1998
(Date Tender Offer First Published, Sent or
Given to Security Holders)
------------------------
CALCULATION OF FILING FEE
=======================================================================
Transaction Valuation(FN1) Amount of Filing Fee(FN1)
$2,169,537.50 $433.91*
=======================================================================
1. Estimated solely for the purpose of calculating the filing fee.
Assumes purchase of 1,668,875 outstanding Warrants at $1.30 per
Warrant.
|_| Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
============================================================================
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Statement relates is
Audiovox Corporation, a Delaware corporation (the "Company"). The principal
executive offices of the Company are located at 150 Marcus Blvd.,
Hauppauge, New York 11788.
(b) The information set forth in the front cover page, "Introduction,"
"Section 1. Background; Purpose of the Offer; Certain Effects of the Offer;
Plans of the Company After the Offer," "Section 4. Expiration Date;
Extension of the Offer" and "Section 12. Transactions and Arrangements
Concerning the Warrants" of the Offer to Purchase, a copy of which is
attached hereto as Exhibit (a)(1) (the "Offer to Purchase"), is
incorporated herein by reference.
(c) The information set forth in the front cover page, "Introduction"
and "Section 9. Price Range of Common Stock" of the Offer to Purchase is
incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "Section 11. Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER
OR AFFILIATE.
(a)-(j) The information set forth in "Section 1. Background; Purpose
of the Offer; Certain Effects of the Offer; Plans of the Company After the
Offer" of the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 12. Transactions and
Arrangements Concerning the Warrants" of the Offer to Purchase is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in "Section 1. Background; Purpose of the
Offer; Certain Effects of the Offer; Plans of the Company After the Offer"
and "Section 12. Transactions and Arrangements Concerning the Warrants" of
the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 14. Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
The information set forth in "Section 10. Certain Information
Concerning the Company" of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not Applicable
(b) The information set forth in "Section 3. Certain Legal Matters;
Regulatory and Foreign Approvals; No Appraisal Rights" of the Offer to
Purchase is incorporated herein by reference.
(c) Not Applicable.
(d) Not applicable.
(e) Reference is made to the Offer to Purchase and the related Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, and incorporated in their entirety herein by
reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated August 10, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of letter to brokers, dealers, commercial banks, trust
companies and other nominees dated August 10, 1998.
(a)(5) Form of letter to clients for use by brokers, dealers, commercial
banks, trust companies and other nominees dated August 10, 1998.
(a)(6) Letter to holders of Warrants dated August 10, 1998.
(a)(7) Form of press release dated August 10, 1998.
(a)(8) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(9) Form of dealer manager agreement.
(b) None.
(c) None.
(d) None.
(e) None.
(f) None.
(g) None.
SIGNATURE
After due inquiry and to the best of the Company's knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: August 10, 1998
AUDIOVOX CORPORATION
By:/s/ Charles M. Stoehr
-----------------------
Name: Charles M. Stoehr
Title: Senior Vice President &
Chief Financial Officer
EXHIBIT INDEX
EXHBIT NO. DESCRIPTION
- ------------ -----------------------------------------------------------
(a)(1) Form of Offer to Purchase dated August 10, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of letter to brokers, dealers, commercial banks, trust
companies and other nominees dated August 10, 1998.
(a)(5) Form of letter to clients for use by brokers, dealers,
commercial banks, trust companies and other nominees dated
August 10, 1998
(a)(6) Letter to holders of Warrants dated August 10, 1998.
(a)(7) Form of press release dated August 10, 1998.
(a)(8) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(9) Form of dealer manager agreement.
(b) None.
(c) None.
(d) None.
(e) None.
(f) None.
(g) None.
AUDIOVOX CORPORATION
OFFER TO PURCHASE FOR CASH
ANY OR ALL OF ITS OUTSTANDING WARRANTS,
EACH EXERCISABLE AT $7 1/8 PER SHARE OF CLASS A COMMON STOCK,
AT
$1.30 PER WARRANT
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE
OFFER IS EXTENDED.
- ---------------------------------------------------------------------------
Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase all of its outstanding warrants (the "Warrants") at a
price, net to the seller in cash, of $1.30 per Warrant (the "Purchase
Price"), upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal (which together constitute the
"Offer"). Each Warrant entitles the holder thereof to purchase one share of
Class A Common Stock, $.01 par value per share ("Common Stock"), of the
Company at a price of $7 1/8 per share (the "Warrant Exercise Price"),
subject to adjustment, from the date of issuance until March 15, 2001,
unless sooner terminated under the circumstances described below. As of
August 7, 1998, the Company had issued and outstanding 1,668,875 Warrants.
On August 7, 1998, the closing sales price of the Common Stock on the
American Stock Exchange was $4 11/16 per share. See Section 9.
WARRANTHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
COMMON STOCK. ------------------------------------
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THIS OFFER TO PURCHASE.
------------------------------------
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
------------------------------------
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH WARRANTHOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER
MUST MAKE HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF
SO, HOW MANY WARRANTS TO TENDER.
------------------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON
THE ACCURACY OF THE ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------------------
The Dealer Manager for the Offer is:
Ladenburg Thalmann & Co. Inc.
------------------------------------
The date of this Offer to Purchase is August 10, 1998.
IMPORTANT
Any warrantholder desiring to tender all or any portion of such
holder's Warrants should (a) complete and sign the Letter of Transmittal or
a facsimile thereof in accordance with the instructions in the Letter of
Transmittal, and mail or deliver it and any other required documents
(including the certificates representing the Warrants to be tendered) to
Continental Stock Transfer & Trust Company, who will act as depositary and
escrow agent for the Offer (the "Depositary"), (b) request such holder's
broker, dealer, commercial bank, trust company or other nominee to effect
the transaction for such holder or (c) tender through The Depository Trust
Company ("DTC") pursuant to DTC's Automated Tender Offer Program. Any
warrantholder whose Warrants are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
person if such holder desires to tender Warrants. Any warrantholder who
desires to tender Warrants and whose certificates for such Warrants are not
immediately available for delivery to the Depositary should tender such
Warrants by following the procedures for guaranteed delivery set forth in
Section 5.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery or other materials relating to the Offer may be directed to
Ladenburg Thalmann & Co. Inc. (the "Dealer Manager") at the address and
telephone number set forth on the back cover of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE COMPANY AS TO WHETHER WARRANTHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING WARRANTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE
OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER
OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION
AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY.
TABLE OF CONTENTS
PAGE
----
SUMMARY......................................................... 4
INTRODUCTION.................................................... 6
SPECIAL FACTORS................................................. 7
Section 1. Background; Purpose of the Offer; Certain
Effects of the Offer; Plans of the Company
After the Offer............................... 7
Section 2. Federal Income Tax Consequences............... 8
Section 3. Certain Legal Matters; Regulatory and Foreign
Approvals; No Appraisal Rights............... 9
THE OFFER....................................................... 10
Section 4. Expiration Date; Extension of the Offer...... 10
Section 5. Procedure for Tendering of Warrants.......... 10
Proper Tender of Warrants................... 10
Signature Guarantees and Method of Delivery 11
Book-Entry Delivery of the Warrants......... 11
Federal Backup Withholding.................. 11
Guaranteed Delivery......................... 12
Determinations of Validity of Warrants;
Rejection of Warrants; Waiver of Defects;
No Obligation to Give Notice of Defects..... 12
Section 6. Withdrawal Rights.............................. 12
Section 7. Acceptance for Payment of Warrants and Payment
of Purchase Price............................. 13
Section 8. Certain Conditions of the Offer............... 14
Section 9. Price Range of Common Stock................... 16
Section 10. Certain Information Concerning the Company 16
General..................................... 16
Summary Consolidated Financial Data......... 16
Capitalization.............................. 18
Additional Information...................... 18
Section 11. Source and Amount of Funds................ 19
Section 12. Transactions and Arrangements Concerning the
Warrants...................................... 19
Section 13. Extension of the Tender Period; Termination;
Amendments.................................... 19
Section 14. Fees and Expenses............................. 20
Section 15. Miscellaneous................................. 21
SCHEDULE A. Directors and Executive Officers of
the Company................................... A-1
SUMMARY
This summary is provided solely for the convenience of the
warrantholders and is qualified in its entirety by reference to the full
text and more specific details contained in this Offer to Purchase and the
related Letter of Transmittal and any amendments hereto and thereto.
The Company Audiovox Corporation.
Warrants Each Warrant entitles the holder thereof to
purchase one share of Common Stock at a price of
$7 1/8 per share, subject to adjustment, from the
date of issuance until March 15, 2001, unless
sooner terminated under the circumstances below.
Potential Acceleration If less than 5% of the Warrants initially issued
of Warrants remain outstanding, the Company may elect, by
written notice to each holder of Warrants, that
the Warrants will expire on the 30th day after
delivery of such notice. The Company intends to
make such election if more than 95% of the
Warrants are tendered pursuant to the Offer. See
Section 1.
Number of Warrants 1,668,875 (all of the Warrants outstanding).
Purchase Price $1.30 per Warrant, net to the seller in cash, upon
the terms and conditions set forth herein and in
the Letter of Transmittal.
Expiration Date of Offer Friday, September 4, 1998, at 12:00
midnight, New York City time, unless extended.
How to Tender
Warrants See Section 5. For further information, call the
Dealer Manager or consult your broker for
assistance.
Withdrawal Rights Tendered Warrants may be withdrawn at any time
until the Expiration Date of the Offer, and may
also be withdrawn after October 5, 1998 (or such
later date may apply if the Offer is extended),
unless previously accepted for payment by the
Company. See Section 4 and Section 6.
Conditions to Offer The Offer is subject to certain conditions
described herein. See Section 8.
Background; Purpose
and Effects of Offer On May 9, 1995, the Company issued 1,668,875
Warrants in a private placement to the beneficial
holders, as of June 3, 1994, of approximately
$57,640,000 of the Company's 6 1/4% Convertible
Subordinated Debentures due 2001 (the
"Subordinated Debentures") in exchange for a
release of any claims such holders may have
against the Company, its agents, directors and
employees in connection with their investment in
the Subordinated Debentures. Each holder received
30 Warrants for each $1,000 principal amount of
Subordinated Debentures held, except for
Oppenheimer & Co., Inc., which received 25
Warrants per $1,000 principal amount of the
Subordinated Debentures held. Simultaneous with
the issuance of the Warrants in May 1995, John J.
Shalam, President, Chief Executive Officer and
Chairman of the Board of the Company, granted the
Company an option (the "Shalam Option") to
purchase a number of shares of Common Stock equal
to the number of shares purchasable under the
Warrants. The purchase price per share of Common
Stock (the "Shalam Option Price") upon exercise of
the Shalam Option will be equal to the sum of (a)
the Warrant Exercise Price plus (b) an additional
amount (the "Tax Amount") intended to reimburse
Mr. Shalam for any additional taxes per share
required to be paid by Mr. Shalam as a result of
the payment of the Shalam Option Price being
treated for federal, state and local income tax
purposes as the distribution to Mr. Shalam of a
dividend (taxed at ordinary income rate without
consideration of Mr. Shalam's basis), rather than
as a payment to Mr. Shalam for the sale of his
Common Stock to the Company (taxed at the capital
gains rate with consideration of Mr. Shalam's
basis and considering any stepped up basis to Mr.
Shalam's heirs, successors or assigns) pursuant to
the Shalam Option.
The Company is tendering for the Warrants because
the Company believes that purchasing all of the
Warrants from the warrantholders would cost less
than reimbursing Mr. Shalam for the Tax Amount in
the event that warrantholders exercise their
rights under the Warrants to acquire shares of the
Common Stock and the Company elects to exercise
the Shalam Option.
The Company's purchase of Warrants pursuant to the
Offer will reduce the number of warrantholders and
the number of Warrants outstanding. If more than
95% of the Warrants are tendered pursuant to the
Offer, the Company intends to elect, by written
notice to each holder of the remaining Warrants,
that such Warrants will expire on the 30th day
after delivery of such notice.
Market Price of Common
Stock On August 7, 1998, the closing sales price of the
American Stock Exchange was $4 11/16 per share.
Warrantholders are urged to obtain a current
market quotation. See Section 9.
Trading Market The Warrants are quoted on the "pink sheets"
published by the National Quotation Bureau, Inc.
The Company believes that the Warrants are not
actively traded.
Brokerage Commissions Not payable by warrantholders.
Stock Transfer Tax None, except as provided in Instruction 3 of the
Letter of Transmittal and Section 7.
Payment Date As soon as practicable after the Expiration Date
of the Offer.
Further Information Any questions, requests for assistance or requests
for additional copies of this Offer to Purchase,
the Letter of Transmittal or other materials
relating to the Offer may be obtained by
contacting the Dealer Manager at the address and
telephone number set forth on the back cover of
this Offer to Purchase.
INTRODUCTION
Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase all of its outstanding warrants (the "Warrants") at a
price, net to the seller in cash, of $1.30 per Warrant (the "Purchase
Price"), upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal (which together constitute the
"Offer"). Each Warrant entitles the holder thereof to purchase one share of
Class A Common Stock, $.01 par value per share ("Common Stock"), of the
Company at a price of $7 1/8 per share (the "Warrant Exercise Price"),
subject to adjustment, from the date of issuance until March 15, 2001,
unless sooner terminated under certain circumstances. As of August 7, 1998,
the Company had issued and outstanding 1,668,875 Warrants. On August 7,
1998, the closing sales price of the Common Stock on the American Stock
Exchange was $4 11/16 per share. See Section 9. WARRANTHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON STOCK.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THIS OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH HOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER MUST MAKE
HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF SO, HOW
MANY WARRANTS TO TENDER.
Warrantholders are not under any obligation to accept the Offer or to
remit the Warrants to the Company pursuant to the Offer. Tendering
warrantholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of
Transmittal, stock transfer taxes on the purchase of Warrants by the
Company. The Company will pay all charges and expenses of the Depositary
and the Dealer Manager incurred in connection with the Offer. ANY TENDERING
WARRANTHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE
FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF
A FOREIGN INDIVIDUAL, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE
SUBJECT TO REQUIRED U.S. FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF
THE GROSS PROCEEDS PAYABLE TO SUCH WARRANTHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER.
The address of the principal executive offices of the Company is 150
Marcus Boulevard, Hauppauge, New York 11788.
SPECIAL FACTORS
SECTION 1. BACKGROUND; PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE
OFFER; PLANS OF THE COMPANY AFTER THE OFFER
On May 9, 1995, the Company issued 1,668,875 Warrants in a private
placement to the beneficial holders, as of June 3, 1994, of approximately
$57,640,000 of the Company's 6 1/4% Convertible Subordinated Debentures due
2001 (the "Subordinated Debentures") in exchange for a release of any
claims such holders may have had against the Company, its agents, directors
and employees in connection with their investment in the Subordinated
Debentures. Each holder received 30 Warrants for each $1,000 principal
amount of Subordinated Debentures, except for Oppenheimer & Co., Inc.,
which received 25 Warrants per $1,000 principal amount of the Subordinated
Debentures held. Each Warrant is exercisable for one share of Common Stock
at a price of $7 1/8 per share, subject to adjustment under certain
circumstances, at any time until 12:00 midnight, New York City time, on
March 15, 2001, unless sooner terminated under the circumstances described
below.
Simultaneously with the issuance of the Warrants in May 1995, John J.
Shalam, President, Chief Executive Officer and Chairman of the Board of the
Company, granted the Company an option (the "Shalam Option") to purchase a
number of shares of Common Stock equal to the number of shares purchasable
under the Warrants. The purchase price per share of Class A Common Stock
(the "Shalam Option Price") upon the exercise of the Shalam Option will be
equal to the sum of (a) the Warrant Exercise Price plus (b) an additional
amount (the "Tax Amount") intended to reimburse Mr. Shalam for any
additional taxes per share required to be paid by Mr. Shalam as a result of
the payment of the Shalam Option Price being treated for federal, state and
local income tax purposes as the distribution to Mr. Shalam of a dividend
(taxed at ordinary income rate without consideration of Mr. Shalam's
basis), rather than as a payment to Mr. Shalam for the sale of his Common
Stock to the Company (taxed at the capital gains rate with consideration of
Mr. Shalam's basis and considering any stepped up basis to Mr. Shalam's
heirs, successors or assigns) pursuant to the Shalam Option.
On August 7, 1998, there were 1,668,875 Warrants, 17,258,573 shares of
Common Stock (447,000 of which were held by the Company as treasury shares)
and 2,260,954 shares of Class B Common Stock issued and outstanding. If all
outstanding Warrants were exercised for shares of Common Stock on a
one-for-one basis, the Common Stock into which such Warrants were converted
would represent approximately 7.9% of the issued and outstanding Common
Stock and Class B Common Stock of the Company (excluding the effect of the
exercise or conversion of the Company's other outstanding options or
warrants).
The Company is tendering for the Warrants because the Company believes
that purchasing all of the Warrants from the warrantholders would cost less
than reimbursing Mr. Shalam for the Tax Amount in the event that
warrantholders exercise their rights under the Warrants to acquire shares
of the Common Stock and the Company elects to exercise the Shalam Option.
The Board of Directors has unanimously authorized the Offer. HOWEVER, THE
COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD TENDER ANY OR ALL OF
SUCH HOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH WARRANTHOLDER MUST MAKE
HIS, HER OR ITS OWN DECISION WHETHER TO TENDER WARRANTS AND, IF SO, HOW
MANY WARRANTS TO TENDER. The Company anticipates that it will fund the
purchase of Warrants pursuant to the Offer and the payment of related fees
and expenses from cash generated from operations.
Holders of the Warrants are not under any obligation to accept the
Offer or to remit their Warrants to the Company pursuant to the Offer.
Warrants that the Company acquired pursuant to the Offer will be retired
and will not be reissued.
If fewer than all of the Warrants are purchased pursuant to the Offer,
the Company may, in its sole discretion, purchase any then outstanding
Warrants through privately negotiated transactions, open market purchases,
another tender offer or otherwise, on such terms and at such prices as the
Company may determine from time to time, the terms of which could be the
same as, or more or less favorable to warrantholders than, the terms of the
Offer.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
Any possible future purchases of Warrants by the Company will depend
on many factors, including the market price (if any) of the Warrants, the
market price of the Common Stock, the Company's business and financial
position, alternative investment opportunities available, the results of
the Offer and general economic and market conditions. However, Rule 13e-4
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prohibits the Company and its affiliates from purchasing any Warrants,
other than pursuant to the Offer, until at least ten business days after
the Expiration Date.
In May 1997, the Company announced that its Board of Directors has
authorized the repurchase of up to one million shares of Common Stock.
During the pendency of the Offer, the Company will suspend any repurchase
of the Common Stock. Except as described above or pursuant to the Offer,
the Company has no present plans or proposals that would result in (a) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company, (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, or any sale
or transfer of a material amount of assets, involving the Company or any of
its subsidiaries, (c) any change in the present Board of Directors or
management of the Company including, but not limited to, any plan or
proposal to change the number or term of the directors, to fill any
existing vacancy on the Board of Directors or to change any material term
of the employment contract of any executive officer of the Company, (d) any
material change in the present dividend rate or policy or indebtedness or
capitalization of the Company, (e) any other material change in the
Company's corporate structure or business, (f) any change in the Company's
charter, bylaws or instruments corresponding thereto or any other actions
which may impede the acquisition of control of the Company by any person,
(g) any class of equity security of the Company (other than the Warrants)
being de-listed from a national securities exchange or ceasing to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, without listing on another national
securities exchange or quotation on an inter-dealer quotation system of a
registered national securities association, (h) any class of equity
securities of the Company (other than the Warrants) becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act or (i) the suspension of the Company's obligation to file reports
pursuant to Section 15(d) of the Exchange Act. See Section 10.
SECTION 2. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary of material federal income tax considerations
regarding the Offer is based on current law (except as specifically
discussed below), is for general purposes only, and is not tax advice. The
discussion contained in this summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), existing and proposed United States
Treasury regulations promulgated thereunder, rulings, administrative
pronouncements and judicial decisions, subject to change, possibly with
retroactive effect. This discussion does not purport to deal with all
aspects of taxation that may be relevant to particular warrantholders in
light of their personal investment or tax circumstances, or to certain
types of warrantholders (including insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, traders in
securities, persons who hold Warrants as part of hedging, "straddle",
"conversion" or other integrated transactions and persons who are not
United States persons as defined in Section 7701(a)(30) of the Code)
subject to special treatment under the federal income tax laws. This
discussion assumes that the Warrants are (and the Common Stock issuable
upon exercise of the Warrants, would be) held as "capital assets" within
the meaning of Section 1221 of the Code.
EACH WARRANTHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING
THE SPECIFIC U.S. FEDERAL INCOME TAX CONSEQUENCES TO SUCH WARRANTHOLDER
TENDERING WARRANTS PURSUANT TO THE OFFER, AND THE APPLICABILITY AND EFFECT
OF ANY STATE, LOCAL OR FOREIGN TAX LAWS AND RECENT OR POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
The purchase by the Company of a Warrant pursuant to the Offer will be
a taxable transaction in which a tendering warrantholder will generally
recognize taxable gain or loss in an amount equal to the difference between
the amount realized on the sale and the holder's adjusted tax basis in the
Warrants. Any gain or loss recognized on the transaction will be capital
gain or loss, which would be long-term if the Warrants have been held for
more than one year.
SECTION 3. CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS;
NO APPRAISAL RIGHTS
The Company is not aware of any license or regulatory permit that
appears to be material to its business that might be adversely affected by
its purchase of Warrants as contemplated in the Offer or of any approval or
other action by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, that would be required
for the Company's purchase of Warrants pursuant to the Offer. Should any
such approval or other action be required, the Company currently
contemplates that it will seek such approval or other action. The Company
cannot predict whether it may determine that it is required to delay the
acceptance for payment of, or payment for, Warrants tendered pursuant to
the Offer pending the outcome of any such matter. There can be no assurance
that any such approval or other action, if needed, would be obtained or
would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. In lieu of seeking such approval,
the Company may determine to terminate the Offer as described in Section 8.
The Company intends to make all required filings under the Exchange Act
with regard to the Offer. The Company's obligations under the Offer to
accept for payment, or make payment for, Warrants is subject to certain
conditions. See Section 8.
There is no stockholder or warrantholder vote required in connection
with the Offer.
There are no appraisal rights available to holders of Warrants in
connection with the Offer.
THE OFFER
SECTION 4. EXPIRATION DATE; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment (and thereby purchase) all Warrants that are
properly tendered on or before the Expiration Date (and not withdrawn in
accordance with Section 6) at the Purchase Price. The term "Expiration
Date" means 12:00 midnight, New York City time, on Friday, September 4,
1998, unless and until the Company shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended
by the Company, shall expire. See Section 8 regarding certain conditions of
the Offer.
As described in Section 13, the Company expressly reserves the right,
in its sole discretion, at any time or from time to time, to extend the
period of time during which the Offer is open by giving oral or written
notice of such extension to the Depositary and by making public
announcement thereof. See Section 13. There can be no assurance, however,
that the Company will exercise its right to extend the Offer.
If the Company increases the price to be paid for Warrants and the
Offer is scheduled to expire at any time earlier than the tenth business
day from and including the date that notice of such increase is first
published, sent or given in the manner specified in Section 13, the Offer
will be extended until the expiration of the ten business day period
immediately following the date of such notice. For purposes of the Offer,
"business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
All Warrants purchased pursuant to the Offer will be purchased at the
Purchase Price in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase. All Warrants not purchased pursuant to the
Offer, including Warrants tendered and withdrawn, will be promptly returned
to the tendering warrantholders at the Company's expense.
SECTION 5. PROCEDURE FOR TENDERING OF WARRANTS
Proper Tender of Warrants. For Warrants to be properly tendered
pursuant to the Offer:
(a) the Warrants, together with a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) with any
required signature guarantees, and any other documents required by the
Letter of Transmittal, or (in the case of a book-entry transfer) an
Agent's Message in lieu of the Letter of Transmittal must be received
before the Expiration Date by the Depositary at its address set forth
on the back cover of this Offer to Purchase; or
(b) the tendering warrantholder must comply with the guaranteed
delivery procedure set forth below.
The term "Agent's Message" means a message, transmitted by DTC and
received by the Depositary and forming a part of a book-entry confirmation
("Book-Entry Confirmation"), which states that DTC has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal and that the Company may enforce such Letter of Transmittal
against such participant. A tender of Warrants made pursuant to any method
of delivery set forth herein will constitute a binding agreement between
the tendering warrantholder and the Company upon the terms and conditions
of the Offer. LETTERS OF TRANSMITTAL AND CERTIFICATES REPRESENTING WARRANTS
SHOULD NOT BE SENT DIRECTLY TO THE COMPANY.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is
signed by the registered owner of the Warrants tendered therewith, and
payment and delivery are to be made directly to such registered owner at
such owner's address shown on the records of the Company, or if Warrants
are tendered for the account of a bank, dealer, credit union, savings
association or other entity that is a member in good standing of a
recognized Medallion Program approved by the Securities Transfer
Association (each such entity being hereinafter referred to as an "Eligible
Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction
2 of the Letter of Transmittal. If a Warrant is registered in the name of a
person other than the signer of a Letter of Transmittal, or if payment is
to be made, or Warrants not purchased or tendered are to be issued, to a
person other than the registered owner, the Warrant must be endorsed or
accompanied by an appropriate power, in either case signed exactly as the
name of the registered owner appears on the Warrant, with the signature on
the Warrant or power guaranteed by an Eligible Institution. In all cases,
payment for Warrants tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of such
Warrants, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantee, and any other
required documents.
Book-Entry Delivery of the Warrants. Within two business days after
the date of this Offer to Purchase, the Depositary will establish an
account with respect to the Warrants at DTC for purposes of the Offer. Any
financial institution that is a participant in the DTC system may make
book-entry delivery of the Warrants by causing DTC to transfer such
Warrants into the Depositary's account in accordance with DTC's procedure
for such transfer. Although delivery of Warrants may be effected through
book-entry at DTC, the Letter of Transmittal, with any required signature
guarantees, or (in the case of a book-entry transfer) an Agent's Message in
lieu of the Letter of Transmittal and any other required documents, should
be transmitted to and received by the Depositary prior to the Expiration
Date at the address set forth on the back cover of this Offer to Purchase.
Delivery of such documents to DTC does not constitute delivery to the
Depositary.
THE METHOD OF DELIVERY OF THE WARRANTS IS AT THE ELECTION AND RISK OF
THE TENDERING WARRANTHOLDER. IF DELIVERY IS TO BE MADE BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Federal Backup Withholding. Unless an exemption applies under the
applicable law and regulations concerning "backup withholding" of federal
income tax, the Depositary will be required to withhold, and will withhold,
31% of the gross proceeds otherwise payable to a warrantholder or other
payee pursuant to the Offer unless the warrantholder or other payee
provides such person's tax identification number (social security number or
employer identification number) and certifies that such number is correct.
Each tendering warrantholder, other than a non-corporate foreign
warrantholder, should complete and sign the main signature form and the
Substitute Form W-9 included as part of the Letter of Transmittal, so as to
provide the information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a
manner satisfactory to the Company and the Depositary. Non-corporate
foreign warrantholders should generally complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding.
Guaranteed Delivery. If a warrantholder desires to tender Warrants
pursuant to the Offer and such holder's Warrants are not immediately
available or time will not permit all required documents to reach the
Depositary before the Expiration Date or the procedures for book-entry
transfer cannot be completed on a timely basis, such Warrants may
nevertheless be tendered provided that all of the following conditions are
satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, or facsimile
transmission), on or prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer to
Purchase; and
(c) the tendered Warrants in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
a facsimile thereof) with any required signature guarantees, and any
other documents required by the Letter of Transmittal are received by
the Depositary within three Nasdaq trading days after the date of
execution of such Notice of Guaranteed Delivery.
Determinations of Validity of Warrants; Rejection of Warrants; Waiver
of Defects; No Obligation to Give Notice of Defects. All questions as to
the validity, form, eligibility (including time of receipt) and acceptance
for payment of any tender of Warrants will be determined by the Company, in
its sole discretion, which determination shall be final and binding on all
parties. The Company reserves the absolute right to reject any or all
tenders it determines not to be in proper form or the acceptance for
payment of which may, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the absolute right to waive any of the conditions
of the Offer and any defect or irregularity in the tender of any particular
Warrants. No tender of Warrants will be deemed to be properly made until
all defects or irregularities have been cured or waived. None of the
Company, the Depositary, the Dealer Manager or any other person is or will
be obligated to give notice of any defects or irregularities in tenders,
and none of them will incur any liability for failure to give any such
notice.
SECTION 6. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 6, a tender of Warrants
pursuant to the Offer is irrevocable. Warrants tendered pursuant to the
Offer may be withdrawn (a) at any time before the Expiration Date and (b)
unless therefore accepted for payment by the Company as described in the
first paragraph of Section 7, may also be withdrawn at any time after
October 5, 1998 (or such later date may apply if the Offer is extended). If
the Company extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Warrants or is unable to
accept for payment or pay for Warrants pursuant to the Offer for any
reason, then, without prejudice to the Company's rights under the Offer,
the Depositary may, on behalf of the Company, retain all Warrants tendered,
and such Warrants may not be withdrawn except as otherwise provided in this
Section 6, subject to Rule 13e-4(f)(5) under the Exchange Act, which
provides that the issuer making a tender offer shall either pay the
consideration offered or return the tendered securities promptly after the
termination or withdrawal of the tender offer.
For a withdrawal to be effective, the Depositary must timely receive
(at its address set forth on the back cover of this Offer to Purchase), by
written, telegraphic or facsimile transmission, a notice of withdrawal.
Such notice of withdrawal must specify the name of the person having
tendered the Warrants to be withdrawn, the number of Warrants to be
withdrawn and the name of the registered owner, if different from that of
the person who tendered such Warrants. If the Warrants have been delivered
or otherwise identified to the Depositary, then, prior to the release of
such Warrants, the tendering warrantholder must also submit the serial
numbers shown on the particular Warrants, and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (except in the
case of Warrants tendered by an Eligible Institution). If the Warrants have
been tendered pursuant to the procedures for book-entry transfer as set
forth herein, any notice of withdrawal must also specify the name and
number of the account at DTC to be credited with the withdrawn Warrants.
All questions as to the form and validity (including timely receipt)
of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
None of the Company, the Depositary, the Dealer Manager or any other person
is or will be obligated to give any notice of any defects or irregularities
in any notice of withdrawal, and none of them will incur any liability for
failure to give any such notice. A withdrawal of a tender of Warrants may
not be rescinded, and Warrants properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. Withdrawn Warrants may,
however, be re-tendered before the Expiration Date by again following the
applicable procedures described in Section 5.
SECTION 7. ACCEPTANCE FOR PAYMENT OF WARRANTS AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, promptly
after the Expiration Date, the Company will purchase and pay the Purchase
Price for all Warrants (subject to certain matters discussed in Section 4
and Section 13) as are properly tendered and not withdrawn as permitted in
Section 6. For purposes of the Offer, the Company will be deemed to have
accepted for payment (and thereby purchased) Warrants which are tendered
and not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Warrants for payment pursuant to the
Offer. See Section 8 regarding certain conditions of the Offer.
Payment for Warrants pursuant to the Offer will be made by depositing
the aggregate Purchase Price therefor with the Depositary, which will act
as agent for tendering warrantholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering warrantholders.
Notwithstanding any other provision hereof, payment for Warrants accepted
for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of the accepted Warrants, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
with any required signature guarantees and any other required documents.
Under no circumstances will interest on the Purchase Price be paid by the
Company, regardless of any delay in making such payment.
The Company will pay any stock transfer taxes with respect to the
transfer and sale of Warrants to it pursuant to the Offer. If, however, (a)
payment of the Purchase Price is to be made to any person other than the
registered holder, (b) Warrants not tendered or accepted for purchase are
to be registered in the name of any person other than the registered
holder, (c) tendered Warrants are registered in the name of any person
other than the person signing the Letter of Transmittal or (d) a transfer
tax is imposed for any reason other than the transfer or sale of the
Warrants to the Company pursuant to the Offer, then the amount of any
transfer taxes (whether imposed on the registered holder or such person)
payable on account of the transfer to such person will be deducted from the
Purchase Price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted. See Instruction 3 of the Letter of
Transmittal.
ANY TENDERING WARRANTHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY
AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR,
IN THE CASE OF A FOREIGN INDIVIDUAL, FORM W-8 OBTAINABLE FROM THE
DEPOSITARY) MAY BE SUBJECT TO REQUIRED U.S. FEDERAL INCOME TAX WITHHOLDING
OF 31% OF THE GROSS PROCEEDS PAID TO SUCH WARRANTHOLDER OR OTHER PAYEE
PURSUANT TO THE OFFER. SEE SECTION 5.
SECTION 8. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to
(and not in limitation of) the Company's right to extend or otherwise amend
the Offer at any time in its sole discretion, the Company shall not be
required to accept for payment or make payment for any Warrant tendered,
and may terminate or amend the Offer, if before acceptance for payment of
payment for any such Warrant any of the following shall have occurred or
shall have been determined to have occurred by the Company, whose
determination shall be conclusive:
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign,
which (i) challenges or seeks to challenge the making of the Offer,
the purchase of Warrants pursuant to the Offer or otherwise relates in
any manner to the Offer; or (ii) in the sole judgment of the Company,
could materially adversely affect the business, condition (financial
or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or
any of its subsidiaries or materially impair the Offer's contemplated
benefits to the Company;
(b) there shall have been any action, threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced, or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by
any court or any government or governmental, regulatory or
administrative authority, agency, tribunal, domestic or foreign, which
in the Company's sole judgment, would or might directly or indirectly,
(i) make the acceptance for payment of, or payment for, Warrants
illegal or otherwise restrict or prohibit consummation of the Offer;
(ii) delay or restrict the ability of the Company, or render the
Company unable, to accept for payment, or pay for, Warrants; (iii)
materially impair the contemplated benefits of the Offer to the
Company; or (iv) materially and adversely affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any United
States national securities exchange or in the over-the-counter market
(excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index); (ii) any significant
decline in the market prices of equity securities in the United States
or abroad; (iii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iv)
the commencement of a war, armed hostilities or other international or
national crisis directly or indirectly involving the United States;
(v) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event
which, in the sole judgment of the Company, might affect, the
extension of credit by banks or other lending institutions in the
United States; (vi) any change in the general political, market,
economic or financial conditions in the United States or abroad that
could, in the sole judgment of the Company, have a material adverse
effect on the Company's business, operations, prospects or the trading
in the Warrants; or (vii) in the case of any of the foregoing existing
at the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(d) any tender or exchange offer with respect to the Warrants
(other than the Offer) or any other class of the Company's equity
securities or any merger, acquisition, business combination or other
similar transaction with or involving the Company or any subsidiary,
shall have been proposed, announced or made by any unaffiliated person
or entity;
(e) any change shall occur or be threatened in the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, which in the sole
judgment of the Company, is or may be materially adverse to the
Company; or
(f) it shall have been publicly disclosed or the Company shall
have learned that (i) any person, entity or "group" (as that term is
used in Section 13(d)(3) of the Exchange Act) shall have acquired, or
proposed to acquire, beneficial ownership of more than 5% of the
outstanding Common Stock (other than a person, entity, or "group"
which had publicly disclosed such ownership in a Schedule 13D or 13G
(or an amendment thereto) on file with the Commission prior to August
10, 1998, (ii) any such person or group that on or prior to August 10,
1998, had filed such a Schedule with the Commission thereafter shall
have acquired or shall propose to acquire beneficial ownership of
additional shares of Common Stock representing 2% or more of the
outstanding Common Stock, (iii) any new group shall have been formed
which beneficially owns more than 5% of the outstanding Common Stock
or (iv) any person, entity or group shall have filed a Notification
and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, or made a public announcement reflecting an intent to acquire
the Company or any of its subsidiaries or any of their respective
assets or securities;
and, in the sole judgment of the Company, in any such case and regardless
of the circumstances (including any action or inaction by the Company)
giving rise to such condition, such event makes it inadvisable or
undesirable to proceed with the Offer or with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of the Company
and may be asserted or waived by the Company regardless of the
circumstances (including any action or inaction by the Company) giving
rise to any such condition, and any such condition may be waived by
the Company, in whole or in part, at any time and from time to time in
its sole discretion, provided, however, that the Exchange Act and the
rules and regulations promulgated thereunder require that all
conditions to the Offer, other than those relating to the receipt of
certain necessary governmental approvals, must be satisfied or waived
prior to the Expiration Date. The Company's failure at any time to
exercise any of the foregoing rights shall not be deemed a waiver of
any such right or the waiver of any such right with respect to
particular facts or circumstances, and each such right shall be deemed
an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described
above and any related judgment by the Company regarding the
inadvisability of proceeding with the acceptance of payment or payment
for any tendered Warrants will be final and binding on all parties.
SECTION 9. PRICE RANGE OF COMMON STOCK
The Warrants are quoted on the "pink sheets" published by the National
Quotation Bureau, Inc. The Company believes that the Warrants are not
actively traded. The Common Stock is traded on the American Stock Exchange
under the trading symbol "VOX". The following table sets forth, for each
period shown, the high and low closing bid information for the Common Stock
as reported by the American Stock Exchange.
1997 High Low
---- ---- ---
Fourth Quarter........................... $10 3/4 $7 5/16
1998
----
First Quarter............................ $9 $5 3/4
Second Quarter........................... $7 7/16 $4 3/4
Third Quarter (through August 4, 1998)... $6 $3 11/16
On August 7, 1998, the closing sales price of the Common Stock as
reported by the American Stock Exchange was $4 11/16 per share.
WARRANTHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
COMMON STOCK.
SECTION 10. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company, together with its operating subsidiaries,
markets and supplies, under its own name or trade names, a diverse line of
aftermarket products which include wireless products, both hand-held
portables and vehicle-installed cellular telephones and accessories,
automotive sound equipment and automotive accessories, which includes
vehicle security systems, cruise controls, defoggers, remote start systems
and vehicle tracking systems, all of which are designed primarily for
installation in cars, trucks and vans after they have left the factory, and
consumer electronic products.
Schedule A hereto sets forth the name, business address and present
principal occupation or employment and any other material occupations,
positions, offices or employments during the last five years of each
director and executive officer of the Company.
Summary Consolidated Financial Data. The summary consolidated
financial data of the Company as of May 31, 1998 set forth below has been
excerpted or derived from the financial statements and notes of the
Company's Form 10-K for the years ended November 30, 1997 and November 30,
1996 and the Company's Form 10-Q for the quarter ended May 31, 1998. More
comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The summary
consolidated financial information that follows is qualified in its
entirety by reference to such reports and such other documents and all the
financial information (including any related notes) contained therein. Such
reports and other documents may be examined and copies may be obtained from
the offices of the Commission as described in "--Additional Information."
AUDIOVOX CORPORATION
Offer To Purchase For Cash
Any Or All Of Its Outstanding Warrants,
Each Exercisable At $7 1/8 Per Share
of Class A Common Stock
At
$1.30 Per Warrant
LETTER OF TRANSMITTAL
------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE OFFER IS EXTENDED.
------------------------------------------------------------------------
TO: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By Facsimile Transmission: By Mail, Hand or Overnight For Information:
(212) 509-5150 Delivery: (212) 509-4000
Attn: Reorganization Continental Stock Transfer
Department & Trust Company
2 Broadway, 19th Floor
New York, New York 10004
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
Any questions or requests for assistance or for additional copies of
the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery or any other materials relating to the Offer may be directed to
the Dealer Manager. Warrantholders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning
the Offer.
------------------------------------------------------------------------
THE DEALER MANAGER FOR THE OFFER IS:
Ladenburg Thalmann & Co. Inc.
(212) 409-2008
------------------------------------------------------------------------
The undersigned acknowledges receipt of the Offer to Purchase, dated
August 10, 1998 (the "Offer to Purchase"), of Audiovox Corporation, a
Delaware corporation (the "Company"), and this Letter of Transmittal (which
together constitute the "Offer"), pursuant to which the Company is offering
to purchase all of its outstanding warrants (the "Warrants"), at a price,
net to the seller in cash, of $1.30 per Warrant. Each Warrant entitles the
holder thereof to purchase one share of Class A Common Stock, $.01 par
value per share, of the Company at the exercise price of $7 1/8 per share,
subject to adjustment, from the date of issuance until March 15, 2001,
unless sooner terminated under the circumstances described below.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THE OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
Unless an Agent's Message is utilized (i.e., tenders of Warrants are
to be made by book-entry transfer to the Depositary), this Letter of
Transmittal must be used whether (a) Warrant certificates are to be
physically delivered herewith to Continental Stock Transfer & Trust
Company, as Depositary for the Offer (the "Depositary"), or (b) tenders are
to be made according to the guaranteed delivery procedures set forth in the
Offer to Purchase under "Section 5. Procedure for Tendering of Warrants."
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Offer to Purchase.
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE FOLLOW CAREFULLY THE INSTRUCTIONS CONTAINED HEREIN
Warrantholders who wish to tender their Warrants and whose Warrants
are not immediately available, who cannot deliver their Warrants and any
other documents required hereby prior to 12:00 midnight, New York City
time, on the Expiration Date, or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Warrants according
to the guaranteed delivery procedures set forth in the Offer to Purchase
under "Section 5. Procedure for Tendering of Warrants."
[ ] CHECK HERE IF TENDERED WARRANT CERTIFICATES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED WARRANT
CERTIFICATES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY:
Name(s) of Registered Holder(s):
------------------------------------
Window Ticket No. (if any):
------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------
Name of Institution Which Guaranteed Delivery:
----------------------
List below the Warrants that are to be tendered pursuant to the Offer
to Purchase. If the space below is inadequate, list the certificate numbers
and principal amounts on a separate signed schedule and affix the list to
this Letter of Transmittal.
DESCRIPTION OF WARRANTS TENDERED
- -----------------------------------------------------------------------------
NAME AND ADDRESS PLEASE FILL IN
OF REGISTERED HOLDER (A) NUMBERS AND AMOUNTS
- -----------------------------------------------------------------------------
(1) (2) (3)
WARRANT AGGREGATE NUMBER OF
CERTIFICATE NUMBER OF WARRANTS
NUMBER WARRANTS TENDERED (B)
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
TOTAL
- ---------------------------------------------------------------------------
(A) Any beneficial owner whose Warrants are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender Warrants should contact such registered holder
promptly and instruct such registered holder to tender the Warrants on
his or her behalf. If such beneficial holder wishes to tender warrants
on his or her own behalf, such beneficial owner must, prior to
completing and executing this Letter of Transmittal and delivering
such holder's Warrant certificates, either make appropriate
arrangements to register ownership of the Warrants in such holder's
name or obtain a properly completed power from the registered holder.
THE TRANSFER OF RECORD OWNERSHIP OF THE WARRANTS MAY TAKE CONSIDERABLE
TIME AND, DEPENDING ON WHEN SUCH TRANSFER IS REQUESTED, MAY NOT BE
ACCOMPLISHED PRIOR TO THE EXPIRATION DATE.
(B) Unless otherwise indicated, it will be assumed that all Warrants
evidenced by each Warrant certificate delivered to the Depositary are
being tendered hereby.
Ladies and Gentlemen:
Subject to, and effective upon, acceptance for payment of the Warrants
tendered herewith, in accordance with the terms and subject to the
conditions set forth in the Offer to Purchase, the undersigned hereby
sells, assigns and transfers to the Company all right, title and interest
in the above-described Warrants that are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the
Warrants tendered hereby, and that when the same are accepted for purchase
by the Company, the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and
encumbrances and such Warrants shall not be subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete
the purchase of the Warrants tendered hereby and constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to the Warrants, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled
with an interest) to (a) present such Warrants for registration and
transfer on the books of the Company and (b) receive all benefits and
otherwise exercise all rights of beneficial ownership of the Warrants all
in accordance with the terms of the Offer.
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy and legal representatives,
successors and assigns of the undersigned. Except as stated in the Offer to
Purchase, the tender of Warrants submitted herewith is irrevocable.
The undersigned understands that tenders of Warrants pursuant to any
one of the procedures described in Offer to Purchase under "Section 5.
Procedure for Tendering of Warrants" and in the instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer, including the undersigned's representation and warranty that (a) the
undersigned has a "net long position" in the Warrants being tendered within
the meaning of Rule 14e-4 promulgated under the Exchange Act, and (b) the
tender of such Warrants complies with Rule 14e-4. The Company's acceptance
for payment of Warrants tendered pursuant to the Offer will constitute a
binding agreement between the undersigned and the Company upon the terms
and conditions of the Offer.
The Offer to Purchase is subject to a number of conditions, each of
which may be waived or modified by the Company, as described in the Offer
to Purchase under the caption "Section 8. Certain Conditions of the Offer."
THE UNDERSIGNED RECOGNIZES THAT, AS A RESULT OF SUCH CONDITIONS, THE
COMPANY MAY NOT BE REQUIRED TO ACCEPT THE WARRANTS TENDERED HEREBY. In such
event, the tendered Warrants not accepted for purchase will be returned to
the undersigned at the address shown below the undersigned's signature(s),
unless otherwise indicated in the boxes entitled "Special Issuance
Instructions" or "Special Delivery Instructions" below.
Unless otherwise indicated herein under "Special Issuance
Instructions," please issue the check for the purchase price of the
Warrants purchased or Warrant certificates evidencing Warrants (if any) not
tendered or not accepted for purchase in the name(s) of the registered
holder(s) appearing under the "Description of Warrants Tendered" above.
Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," please mail the check for the purchase price of the Warrants
purchased or Warrant certificates evidencing Warrants (if any) not tendered
or not accepted for purchase to the address(es) of the registered holder(s)
appearing under the "Description of Warrants Tendered" above.
SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if the check for the purchase price of the
Warrants purchased or Warrant certificates evidencing Warrants (if any) not
tendered or not accepted for purchase are to be issued in the name of
someone other than the person whose signature appears on the face of the
Warrants.
Issue (check appropriate box(es)):
[ ] Check [ ] Warrants to:
Name(s):
-----------------------------------------------------------------
Address(es):
-----------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(INCLUDE ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
Tax Identification or Social Security No.:
--------------------------------
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the check for the purchase price of the
Warrants purchased or Warrant certificates evidencing Warrants (if any) not
tendered or not accepted for purchase are to be mailed to someone other
than the person whose signature appears on the face of the Warrants or to
such persons at an address other than that shown in the box entitled
"Description of Warrants Tendered."
Mail (check appropriate box(es)):
[ ] Check [ ] Warrants to:
Name(s):
-----------------------------------------------------------------
Address(es):
-----------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(INCLUDE ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
Tax Identification or Social Security No.:
---------------------------------
SIGNATURE(S)
IMPORTANT: A HOLDER WHO WISHES TO TENDER WARRANTS
IN THE TENDER OFFER MUST SIGN WHETHER OR NOT SUCH WARRANT
CERTIFICATES ARE BEING PHYSICALLY TENDERED HEREBY
(See Instructions 1 and 2 and the instructions in Section 5 of the Offer to
Purchase)
Signature of Registered Holder or
Authorized Signatory:
------------------------------------------------------
Type or Print Name:
-------------------------------------------------------
Dated:
-----------------------------------------------------------------
Tax Identification or Social Security No:
----------------------------------
Signature of Registered Holder or
Authorized Signatory (if more than one):
-----------------------------------
Type or Print Name:
--------------------------------------------------------
Dated:
-----------------------------------------------------------------
Tax Identification or Social Security No:
---------------------------------
Must be signed by registered holder(s) exactly as his, her or its
name(s) appear(s) on the certificate(s) for the tendered Warrants or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent
or other person acting in a fiduciary or representative capacity, please
provide the following information and see Instruction 2 (please print):
Name:
-----------------------------------------------------------------
Address:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Area Code and Telephone No.:
-----------------------------------------------
Capacity (Full Title):
-----------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(If required)
(See Instruction 2)
Name of Firm:
--------------------------------------------------------------
Authorized Signature:
------------------------------------------------------
Title:
---------------------------------------------------------------------
Dated: , 1998
---------
(Please complete Substitute Form W-9
on the last page of this Letter of Transmittal)
INSTRUCTIONS
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR
WARRANTS. Unless an Agent's Message is utilized, this Letter of Transmittal
must be used whether (a) certificates for Warrants are to be physically
delivered to the Depositary herewith or (b) tenders are to be made
according to the guaranteed delivery procedures set forth in the Offer to
Purchase.
Certificates for all physically delivered Warrants, as well as a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by this Letter of Transmittal,
must be received by the Depositary at its address set forth on the front
page of this Letter of Transmittal on or prior to 12:00 midnight, New York
City time, on the Expiration Date. Warrantholders who cannot deliver their
Warrants and all other required documents to the Depositary on or prior to
such time must tender their Warrants pursuant to the guaranteed delivery
procedure set forth in the Offer to Purchase under the caption "Section 5.
Procedure for Tendering of Warrants--Guaranteed Delivery." Pursuant to such
procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Company,
must be received by the Depositary on or prior to 12:00 midnight, New York
City time, on the Expiration Date and (c) the tendered Warrants in proper
form for transfer (or a Book-Entry Confirmation), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
with any required signature guarantees (or, in the case of book-entry
delivery, an Agent's Message), and any other documents required by the
Letter of Transmittal, must be received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of
Guaranteed Delivery. See the Offer to Purchase under "Section 5. Procedure
for Tendering of Warrants."
THE METHOD OF DELIVERY OF WARRANTS AND ALL OTHER REQUIRED DOCUMENTS IS
AT THE OPTION AND RISK OF THE TENDERING WARRANTHOLDER. IF CERTIFICATES FOR
SHARES ARE TO BE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal (or photocopy thereof), the tendering
warrantholder waives any right to receive any notice of the acceptance for
payment of the Warrants.
2. SIGNATURE ON THIS LETTER OF TRANSMITTAL; POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. The signature(s) of the registered holder(s) on
this Letter of Transmittal in the page titled "Signature(s)" must
correspond with the name(s) as written on the face of the Warrants without
alteration, enlargement or any change whatsoever.
(a) If any of the Warrants are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
(b) If any of the Warrants are registered in different names, it
will be necessary to complete, sign and submit as many separate
Letters of Transmittal and any necessary accompanying documents as
there are different registrations.
(c) If this Letter of Transmittal is signed by the registered
holder(s) of the Warrants, no endorsements of Warrants or separate
powers are required, unless certificates for Warrants not tendered are
to be issued in the name of, or delivered to, any person other than
the registered holder(s). Signatures on any such Warrants or powers
must be guaranteed by an Eligible Institution (unless signed by an
Eligible Institution).
(d) If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Warrants, such Warrants must be
endorsed or accompanied by appropriate powers and signed exactly as
the name(s) of the registered holder(s) appear(s) on such Warrants.
Signatures on any such Warrants or powers must be guaranteed by an
Eligible Institution (unless signed by an Eligible Institution).
(e) If this Letter of Transmittal or any certificates or powers
are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate
when signing, and unless waived by the Company, proper evidence
satisfactory to the Company of the authority of such person to so act
must be submitted with this Letter of Transmittal.
3. TRANSFER TAXES. The Company will pay or cause to be paid all stock
transfer taxes, if any, with respect to the tender of any Warrants to it
pursuant to the Offer. If, however, (a) payment of the purchase price for
the Warrants is to be made to, or certificates for any Warrants not
tendered or accepted for purchase are to be issued in the name of, or
delivered to, any person other than the registered holder(s), (b) tendered
Warrants are registered in the name of any person other than the person
signing the Letter of Transmittal or (c) a stock transfer tax is imposed
for any reason other than the transfer or sale of the Warrants to the
Company pursuant to the Offer, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such other person) will be
payable by the tendering holder(s). Unless satisfactory evidence of the
payment of such taxes, or exemption therefrom, is submitted herewith, the
amount of such transfer taxes will be deducted from the purchase price
payable to the tendering holder(s). EXCEPT AS PROVIDED IN THIS INSTRUCTION
3, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE
WARRANT CERTIFICATES LISTED IN THIS LETTER OF TRANSMITTAL.
4. PARTIAL TENDERS. If fewer than all the Warrants represented by any
certificate delivered to the Depositary are to be tendered, fill in the
number of Warrants that are to be tendered in the column three of the box
entitled "Description of Warrants Tendered." In such case, a new
certificate for the remainder of the Warrants represented by the old
certificate will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the boxes entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on this Letter of
Transmittal, as promptly as practicable following the expiration of
termination of the Offer. ALL WARRANTS REPRESENTED BY CERTIFICATES
DELIVERED TO THE DEPOSITARY WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS
OTHERWISE INDICATED.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the check for the
Purchase Price or any Warrants purchased is to be issued in the name of,
and/or any Warrants not tendered or not purchased are to be returned to, a
person other than the person(s) signing this Letter of Transmittal or if
the check and/or any certificates for Warrants not tendered or not
purchased are to be mailed to someone other than the person(s) signing this
letter of Transmittal or to an address other than that shown below the
signature of the person(s) signing this Letter of Transmittal, then the
pages captioned "Special Issuance Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed.
6. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Dealer Manager at the
telephone number and address listed on the front of this Letter of
Transmittal. Requests for additional copies of the Offer to Purchase, this
Letter of Transmittal, the Notice of Guaranteed Delivery or other materials
related to the Offer may be directed to the Dealer Manager and such copies
will be furnished promptly at the Company's expense. Warrantholders may
also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
7. IRREGULARITIES. All questions as to the Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance of any tender of Warrants will be determined by the Company, in
its sole discretion, and its determination shall be final and binding. The
Company reserves the absolute right to reject any or all tenders of
Warrants that it determines are not in proper form or the acceptance for
payment of, or payment for, Warrants that may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute
right to waive any of the conditions to the Offer or any defect or
irregularity in any tender of Warrants and the Company's interpretation of
the terms and conditions of the Offer (including these instructions) shall
be final and binding. Unless waived, any defects or irregularities in
connection with tenders must be cured within such time as the company shall
determine. None of the Company, the Depositary, the Dealer Manager or any
other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for
failure to give any such notice. Tenders will not be deemed to have been
made until all defects and irregularities have been cured or waived.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering warrantholder is
required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided
below, or, in the case of foreign warrantholders, a properly completed Form
W-8. Warrantholders wishing to obtain a copy of Form W-8 may contact the
Depositary. Failure to provide the information on either Substitute Form
W-9 or Form W-8 may subject the tendering warrantholder to a 31% Federal
income tax backup withholding on the payment of the Purchase Price. The box
in Part 2 of Substitute Form W-9 may be checked if the tendering
warrantholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future. If the box in Part 2 is
checked and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the Purchase
Price thereafter until a TIN is provided to the Depositary.
- ---------------------------------------------------------------------------
SUBSTITUTE Part 1 -- PLEASE PROVIDE Social security number
FORM W-9 YOUR TIN IN THE BOX AT -------------------
RIGHT AND CERTIFY BY OR -------------------
SIGNING AND DATING BELOW Employer identification
number
---------------------------------------------------
Department of the Part 2 -- CERTIFICATION -- Under penalties of
Treasury Internal perjury, I certify that:
Revenue Service
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am awaiting
PAYER'S REQUEST FOR for a number to be issued to me) and
TAXPAYER IDENTIFICATION
NUMBER (TIN) (2) I am not subject to backup withholding
either because: (a) I am exempt from backup
withholding, or (b) I have not been notified by
the Internal Revenue Service (the "IRS") that I
am subject to backup withholding as a result of
a failure to report all interest or dividends,
or (c) the IRS has notified me that I am no
longer subject to backup withholding.
---------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must Part 3
cross out item (2) above if you have
been notified by the IRS that you are
currently subject to backup
withholding because of underreporting
interest or dividends on your tax
return. However, if after being
notified by the IRS that you are
subject to backup withholding, you Awaiting TIN
received another notification from |_|
the IRS that you are no longer
subject to backup withholding, do not
cross out such item (2).
SIGNATURE DATE
---------------------- -------------
- ---------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
- ---------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties that a taxpayer identification number has not
been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal
Revenue Service Center or Social Security Administration Office, or (b) I
intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all reportable payments made to me will be withheld; but
that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
- ---------------------------------- ------------------------------------
Signature Date
- ---------------------------------------------------------------------------
AUDIOVOX CORPORATION
Offer To Purchase For Cash
Any Or All Of Its Outstanding Warrants,
Each Exercisable At $7 1/8 Per Share
of Class A Common Stock
At
$1.30 Per Warrant
NOTICE OF GUARANTEED DELIVERY
-------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE OFFER IS EXTENDED.
- ---------------------------------------------------------------------------
As set forth in Section 5 of the Offer to Purchase, dated August 10,
1998 (the "Offer to Purchase"), this form, or one substantially equivalent
hereto, must be used to accept the Offer (as defined below) of Audiovox
Corporation, a Delaware corporation (the "Company"), if (a) certificates
for the warrants (the "Warrants") of the Company are not immediately
available, (b) the warrantholders cannot deliver their Warrants, Letter of
Transmittal and other required documents to Continental Stock Transfer &
Trust Company, who will act as depositary and escrow agent for the Offer
(the "Depositary"), on or prior to 12:00 midnight, New York City time, on
the Expiration Date (as defined in Section 4 of the Offer to Purchase) or
(c) the procedures for delivery of Warrants by book-entry transfer cannot
be completed on a timely basis. Such form may be delivered by hand or
transmitted by facsimile transmission or mail to the Depositary prior to
12:00 midnight, New York City time, on the Expiration Date.
The Eligible Institution (as defined in Section 5 of the Offer to
Purchase) that completes this form must communicate the guarantee to the
Depositary and must deliver the Letter of Transmittal and certificates for
the Warrants to the Depositary within the time period shown herein. Failure
to do so could result in a financial loss to such Eligible Institution.
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
BY MAIL, HAND OR
BY FACSIMILE TRANSMISSION: OVERNIGHT DELIVERY: FOR INFORMATION:
(212) 509-5150 Continental Stock Transfer (212) 509-4000
Attn: Reorganization Department & Trust Company
2 Broadway, 19th Floor
New York, New York 10004
Delivery of this instrument to an address, or transmission of
instructions via facsimile number, other than as set forth above will not
constitute valid delivery.
This form is not to be used to guarantee signatures. If a signature
on a Letter of Transmittal is required to be guaranteed by an Eligible
Institution under the instructions thereto, such signature must appear in
the applicable space provided in the signature box in the Letter of
Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Offer to Purchase and related
Letter of Transmittal (which together constitute the "Offer"), receipt of
which is hereby acknowledged, the number of Warrants specified below
pursuant to the Guaranteed Delivery procedure set forth in Section 5 of the
Offer to Purchase.
(PLEASE TYPE OR PRINT ALL INFORMATION BELOW)
Number of Warrants Tendered:
-------------------------------------------
Warrant Certificate No(s) (if available):
-----------------------------
Total Number of Warrants
Represented by Certificate(s):
-----------------------------------------
Signature(s):
----------------------------------------------------------
Name(s) of Record Holder(s):
-------------------------------------------
Address(es):
-----------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
Area Code and Telephone No(s):
-----------------------------------------
Name of Tendering Institution:
-----------------------------------------
Account Number:
--------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the
United States, hereby guarantees (a) that the above named person(s) has a
"net long position" in the Warrants tendered hereby within the meaning of
Rule 14e-4 under the Securities Exchange Act of 1934, as amended, (b) that
such tender of Warrants complies with Rule 14e-4 and (c) that delivery to
the Company of certificates representing the Warrants tendered hereby, or,
in the case of book-entry delivery of Warrants, a Book-Entry Confirmation
(as defined in the Offer to Purchase), together with a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile
thereof properly completed and duly executed), or, in the case of
book-entry delivery of Warrants, an Agent's Message (as defined in the
Offer to Purchase), and any other required documents, will be received by
the Depositary no later than, in the case of Warrants, three Nasdaq trading
days after the date of execution of this Notice of Guaranteed Delivery.
Name of Firm:
--------------------------------------------------------
Address:
-------------------------------------------------------------
- ---------------------------------------------------------------------
Zip Code
Area Code and
Telephone Number:
----------------------------------------------------
- ---------------------------------------------------------------------
AUTHORIZED SIGNATURE
- ---------------------------------------------------------------------
TITLE
Name:
----------------------------------------------------------------
PLEASE TYPE OR PRINT
Dated:
---------------------------------------------------------, 1998
==============================================================================
NOTE: DO NOT SEND WARRANT CERTIFICATES WITH THIS FORM. CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
AUDIOVOX CORPORATION
Offer To Purchase For Cash
Any Or All Of Its Outstanding Warrants,
Each Exercisable At $7 1/8 Per Share
of Class A Common Stock
At
$1.30 Per Warrant
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE OFFER IS EXTENDED.
- ---------------------------------------------------------------------------
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase any or all of its outstanding warrants (the
"Warrants") at a price, net to the seller in cash, of $1.30 per Warrant
(the "Purchase Price"), upon the terms and subject to the conditions set
forth in the enclosed Offer to Purchase, dated August 10, 1998 (the "Offer
to Purchase"), and in the enclosed Letter of Transmittal (which together
constitute the "Offer"). Each Warrant entitles the holder thereof to
purchase one share of Class A Common Stock, $.01 par value per share (the
"Common Stock"), of the Company at a price of $7 1/8 per share, subject to
adjustment, from the date of issuance until March 15, 2001, unless sooner
terminated under the circumstances described below.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THE OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
We are asking you to contact clients for whom you hold Warrants
registered in your name or in the name of your nominee or who hold Warrants
registered in their own names.
The Company will not pay any fees or commissions to any broker or
dealer or other person for soliciting tenders of Warrants pursuant to the
Offer. However, you will be reimbursed for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Company will pay or cause to be paid all transfer taxes,
if any, applicable to the purchase of Warrants to it or its order, except
as otherwise provided in Instruction 3 of the Letter of Transmittal.
For your information and for forwarding to your clients for whom you
hold Warrants registered in your name or in the name of your nominee of who
hold Warrants registered in their own names, enclosed are copies of the
following documents:
1. The Offer to Purchase, dated August 10, 1998;
2. The Letter of Transmittal;
3. A form letter that may be sent to your clients for whose accounts
you hold Warrants registered in your name or the name of your
nominee, with space provided for obtaining such clients'
instructions with regard to the Offer to Purchase;
4. A Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. The Offer
will expire at 12:00 midnight, New York City time, on Friday, September 4,
1998, unless extended.
A warrantholder wishing to tender Warrants pursuant to the Offer
should either (a) complete and execute the Letter of Transmittal (or
facsimile thereof) and have the signature thereon guaranteed if required by
the instructions thereof, and deliver such Letter of Transmittal, together
with certificates representing the Warrants to be tendered, or, in the case
of book-entry delivery of Warrants, such Warrants should be tendered by
book-entry transfer into the Depositary's account maintained at DTC, and
any other required documents, to the Depositary on or prior to the
Expiration Date or (b) request his broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for him. See the Offer
to Purchase under "Section 5. Procedure for Tendering of Warrants."
Warrantholders who wish to tender their Warrants pursuant to the Offer
and (a) whose certificate(s) for such Warrants are not immediately
available, (b) who cannot deliver their Warrants and Letter of Transmittal
to the Depositary on or prior to the Expiration Date or (c) who cannot
comply with the book-entry transfer procedures on a timely basis, must
tender their Warrants according to the guaranteed delivery procedures set
forth in the Offer to Purchase under "Section 5. Procedure for Tendering of
Warrants."
All questions relating to the Offer, as well as requests for
assistance, may be directed to the Company's Dealer Manager, Ladenburg
Thalmann & Co. Inc., at its address and telephone number set forth on the
back cover of the Offer to Purchase. Requests for additional copies of the
Offer to Purchase, the Letter of Transmittal and the other Offer materials
may be directed to the Dealer Manager.
Very truly yours,
AUDIOVOX CORPORATION
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS AN AGENT OF THE COMPANY, THE DEPOSITARY OR ANY AFFILIATE
OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT
MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
AUDIOVOX CORPORATION
Offer To Purchase For Cash
Any Or All Of Its Outstanding Warrants,
Any Or Each Exercisable At $7 1/8 Per Share
of Class A Common Stock
At
$1.30 Per Warrant
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 4, 1998 UNLESS THE OFFER IS EXTENDED.
- ---------------------------------------------------------------------------
To Our Clients:
Audiovox Corporation, a Delaware corporation (the "Company"), is
offering to purchase any or all of its outstanding warrants (the
"Warrants") at a price, net to the seller in cash, of $1.30 per Warrant,
upon the terms and subject to the conditions set forth in the enclosed
Offer to Purchase, dated August 10, 1998 (the "Offer to Purchase"), and the
enclosed Letter of Transmittal (which together constitute the "Offer").
Each Warrant entitles the holder thereof to purchase one share of Class A
Common Stock, $.01 par value per share, of the Company at a price of $7 1/8
per share, subject to adjustment, from the date of issuance until March 15,
2001, unless sooner terminated under the circumstances described below.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
ONLY TO THOSE CONDITIONS SET FORTH IN SECTION 8 OF THE OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
This material is being forwarded to you as the beneficial owner of
Warrants held by us in your account but not registered in your name. A
TENDER WITH RESPECT TO SUCH WARRANTS MAY BE MADE ONLY BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO
TENDER WARRANTS HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish us to
tender any or all of your Warrants held by us for your account, pursuant to
the terms and conditions of the Offer. Your instructions to us should be
forwarded as promptly as possible in order to permit us to tender your
Warrants on your behalf in accordance with the provisions of the Offer.
Your attention is directed to the following:
1. The Offer will expire at 12:00 midnight, New York City time, on
Friday, September 4, 1998, unless the Offer is extended.
2. Any stock transfer taxes applicable to the sale of Warrants to
the Company pursuant to the Offer will be paid by the Company,
except as otherwise provided in Instruction 3 of the Letter of
Transmittal.
If you wish to have us tender any or all of your Warrants, please so
instruct us by completing, executing and returning to us the instruction
form on the next page. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Warrants, all such Warrants will
be tendered unless otherwise specified on the attached instruction form.
Your instructions should be forwarded to us in ample time to permit us to
submit a tender on your behalf before the expiration of the Offer.
We urge you to read carefully the enclosed Offer to Purchase before
instructing us to tender your Warrants.
THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR
ON BEHALF OF, WARRANTHOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE
OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION. IN THOSE JURISDICTIONS THE LAWS OF WHICH REQUIRE THAT
THE OFFER BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED
TO BE MADE ON BEHALF OF THE COMPANY BY ONE OR MORE REGISTERED BROKERS OR
DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ANY OR ALL
OUTSTANDING WARRANTS OF AUDIOVOX CORPORATION.
The undersigned acknowledge(s) receipt of your letter enclosing the
Offer to Purchase and the Letter of Transmittal relating to the Offer by
Audiovox Corporation to purchase Warrants.
This will instruct you to tender the number of Warrants indicated
below (or, if no number is indicated below, the entire number of Warrants)
that are held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer to Purchase and related
Letter of Transmittal.
Please TENDER _________ Warrants held by you for my account on the
appropriate Letter of Transmittal.
Signature(s):
--------------------------------------------------
Name(s):
-------------------------------------------------------
Address(es):
---------------------------------------------------
Area Code and Telephone No(s):
---------------------------------
Taxpayer Identification or Social Security No(s):
--------------
Dated:
---------------------------------------------------------
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR
SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF
YOUR WARRANTS PURSUANT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER
TO PURCHASE AND THE LETTER OF TRANSMITTAL.
AUDIOVOX CORPORATION
150 Marcus Boulevard
Hauppauge, New York 11788
Re: The Warrants of Audiovox Corporation
Dear Warrantholder:
Audiovox Corporation (the "Company") is offering to purchase any
or all of its outstanding warrants (the "Warrants") at a price, net to the
seller in cash, of $1.30 per Warrant (the "Offer").
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION OR TO THE TENDER
OF A MINIMUM NUMBER OF WARRANTS PURSUANT TO THE OFFER. THE OFFER IS SUBJECT
TO ONLY THOSE CONDITIONS SET FORTH IN SECTION 8 OF THE OFFER TO PURCHASE.
UNDER THE TERMS OF THE WARRANTS, IF LESS THAN 5% OF THE WARRANTS
INITIALLY ISSUED REMAIN OUTSTANDING AT ANY TIME, THE COMPANY MAY ELECT, BY
WRITTEN NOTICE TO EACH HOLDER OF WARRANTS, THAT THE WARRANTS WILL EXPIRE ON
THE 30TH DAY AFTER DELIVERY OF SUCH NOTICE. THE COMPANY INTENDS TO MAKE
SUCH ELECTION IF MORE THAN 95% OF THE WARRANTS ARE TENDERED PURSUANT TO THE
OFFER.
The Company believes that the Warrants are not actively traded. On
August 7, 1998, the closing sales price of the Company's Class A Common
Stock, par value $.01 per share (the "Common Stock"), on the American Stock
Exchange was $4 11/16 per share. WARRANTHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE COMMON STOCK.
The Offer is explained in detail in the enclosed Offer to
Purchase and the Letter of Transmittal. The instructions on how to tender
your Warrants are also explained in detail in the enclosed accompanying
materials. We encourage you to read these materials carefully before making
any decision with respect to the Offer. If you do not wish to participate
in the Offer, you do not need to take any action.
The Board of Directors of the Company has approved the making of the
Offer. HOWEVER, THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE
OFFICERS MAKE NO RECOMMENDATION AS TO WHETHER ANY WARRANTHOLDER SHOULD
TENDER ANY OR ALL OF SUCH HOLDER'S WARRANTS PURSUANT TO THE OFFER. EACH
WARRANTHOLDER MUST MAKE HIS, HER OR ITS OWN DECISION WHETHER TO TENDER
WARRANTS AND, IF SO, HOW MANY WARRANTS TO TENDER.
Please contact Ladenburg Thalmann & Co. Inc. if you have any
questions. Their phone number is (212) 409-2008. They will be pleased to
answer your questions and can help you complete the enclosed materials.
Very truly yours,
AUDIOVOX CORPORATION
Charles M. Stoehr
Senior Vice President &
Chief Financial Officer
FOR IMMEDIATE RELEASE C. Michael Stoehr
Audiovox Corporation
(516) 231-7750
AUDIOVOX FILES TENDER OFFER FOR WARRANTS
Hauppauge, New York, August , 1998 - Audiovox Corporation (AMEX:VOX) today
announced that it has commenced a tender offer (the "Offer") to purchase
all of its outstanding Warrants at a price of $1.30 per Warrant. Each Warrant
entitles the holder to purchase one share of Class A Common Stock of the
Company at a price of $7 1/8 per share, subject to adjustment, until March
15, 2001, unless sooner terminated under certain circumstances. As of August
7, 1998, there were 1,668,875 Warrants issued and outstanding.
The Offer is not subject to any financing condition or to the tender of a
minimum number of Warrants pursuant to the Offer. The Offer is subject to
certain conditions set forth in the Offer to Purchase.
Under the terms of the Warrants, if less than 5% of the Warrants initially
issued remain outstanding at any time, the Company may elect by written
notice to each holder of Warrants, that the Warrants will expire on the 30th
day after delivery of such notice. The Company intends to make such
election if more than 95% of the Warrants are tendered pursuant to the
Offer.
Audiovox Corporation is an international leader in the marketing of
cellular telephones, auto sound, vehicle security, mobile video systems,
and home and portable stereo systems. The Company conducts its business
through two separate marketing groups. The Company markets its products,
both domestically and internationally to the regional Bell Operating
Companies, other carriers and the agents, distributors, retailers, car
dealers and mass merchandisers. The Company markets its products under its
own brands as well as functioning as an OE (Original Equipment) supplier to
several customers.
These securities may not be sold, nor may offers to buy be accepted, prior
to the time the Offer becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of the securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
An Offer to Purchase and related documents may be obtained from Ladenburg
Thalmann & Co. Inc. at (212) 409-2008, which is acting as the Dealer
Manager for the Offer.
Except for historical information contained herein, statements made in this
release that would constitute forward-looking statements may involve
certain risks such as market volatility, price competition and new product
introductions. These factors may cause actual results to differ materially
from results suggested in the forward-looking statements, including those
risks detailed from time to time in the Company's reports on file at the
Securities and Exchange Commission, including the Company's Form 10-K.
# # #
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer.
- --------------------------------------- ----------------------------------
Give the
Give the For this EMPLOYER
For this type of SOCIAL SECURITY type of IDENTIFICATION
account: number of -- account: number of --
======================================= =====================================
1. An individual's The individual 8. Sole The owner(FN4)
account proprietorship
The actual owner account
2. Two or more of the account The legal entity
individuals or, if combined 9. A valid (Do not furnish
(joint account) funds, any one of trust, the identifying
the individuals(FN1) estate, or number of the
pension trust personal
3. Husband and The actual owner representative
wife (joint of the account or trustee
account) or, if joint unless the legal
funds, either entity itself
person(FN1) is not designated
in the account
title.)(FN5)
4. Custodian The minor(FN2) 10. Corporate The corporation
account of a account
minor (Uniform
Gift to Minors
Act) 11. Religious, The organization
charitable or
5. Adult and minor The adult or, if educational
(joint account) the minor is the organization
only contributor, account
the minor(FN1)
6. Account in the The ward, minor 12. Partnership The partnership
name of or incompetent account held
guardian or person(FN3) The organization
committee for a in the name
designated of the
ward, minor, or business
incompetent
person 13. Association, The organization
club, or other
7. a) The usual The tax-exempt
revocable grantor-trustee(FN1) organization
savings
trust
account
(grantor is 14. A broker The broker or
also or registered nominee
trustee); nominee
b) So-called The actual 15. Account The public entity
trust owner(FN1) with the
account that Department of
is not a Agriculture
legal or in the name
valid trust of a public
under State entity (such
law as a State or
local government,
school district,
or prison)
that receives
agricultural
program payments.
======================================= =====================================
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish
such person's social security number.
(4) You must show your individual name, but you may also enter business
or "doing business as" name. You may use either your SSN or EIN (if
you have one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know
your number, obtain Form SS-5, Application for a Social Security Number
Card, or Form SS-4, Application for Employer Identification Number, at the
local office of the Social Security Administration or the Internal Revenue
Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
For purposes of the Offer, payees exempted from backup withholding
include the following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a), or an individual
retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality
thereof.
- - A dealer in securities or commodities required to register in the
United States, the District of Columbia or a possession of the United
States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a)
- - An entity registered at all times under the Investment Company Act of
1940.
- - A foreign central bank of issue.
Payments of dividends not generally subject to withholding include the
following:
- - payments to nonresident aliens subject to withholding under Section
1441
- - payments to partnerships not engaged in a trade or business in the
United States and that have at least one nonresident alien partner
payments made to a nominee
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE DIVIDENDS, ALSO SIGN AND DATE
THE FORM.
Certain payments that are not subject to information reporting are
also not subject to backup withholding. For details, see the regulations
under sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of
dividend, interest, or other payments to give taxpayer identification
numbers to payers who must report the payments to IRS. IRS uses the
numbers for identification purposes. Payers must be given the numbers
whether or not recipients are required to file tax returns. Payers
must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE OBTAINING A NUMBER.
AUDIOVOX CORPORATION
150 MARCUS BOULEVARD
HAUPPAUGE, NEW YORK 11788
DEALER MANAGER AGREEMENT
------------------------
August 10, 1998
Ladenburg Thalmann & Co. Inc.
590 Madison Avenue
New York, New York 10022
Dear Sirs:
1. The Offer. Audiovox Corporation, a Delaware corporation (AAudiovox@ or
the ACompany@), is making a tender offer (hereinafter referred to,
together with any amendments, supplements or extensions thereof, as
the "Offer") to purchase all of its issued and outstanding common
stock purchase warrants exercisable at $7.125 per share of common
stock (the "Warrants"), on the terms and subject to the conditions set
forth in the Offer to Purchase and Letter of Transmittal (the "Letter
of Transmittal") attached hereto as Exhibit A.
2. Appointment as Dealer Manager. The Company hereby appoints you as
Dealer Manager (the "Dealer Manager"), and authorizes you to act as
such in connection with the Offer. As Dealer Manager, you agree, in
accordance with your customary practice, to perform those services in
connection with the Offer as are customarily performed by investment
banks in connection with tender offers of a like nature, including,
but not limited to, communicating generally regarding the Offer with
brokers, dealers, commercial banks and trust companies and similar
holders of the Warrants. In such capacity, you shall act as an
independent contractor, and each of your duties arising out of your
engagement pursuant to this Agreement shall be owed solely to the
Company.
The Company further authorizes you to communicate with Continental
Stock Transfer & Trust Company, in its capacity as depositary (the
"Depositary"), with respect to matters relating to the Offer. The
Company has instructed the Depositary to advise you as often as you
request, but no more than daily, as to the number of Warrants which
have been tendered pursuant to the Offer and as to such other matters
in connection with the Offer as you may reasonably request.
Notwithstanding the foregoing, nothing set forth in this Agreement
shall require you to continue to perform your obligations hereunder
(i) for the period of time during which any restraining, injunctive or
other similar order shall remain in effect with respect to the Offer
or with respect to any of the transactions in connection with, or
contemplated by, the Offer or this Agreement if, after consultation
with the Company, in your good faith judgment, you believe it is
inadvisable for you to render your services as Dealer Manager
hereunder, or (ii) if your continuing so to act would, after
consultation with the Company, in your good faith judgment, violate
any statute, regulation or other law of the United States or any state
or other jurisdiction thereof applicable to the Offer.
3. No Liability for Acts of Dealers, Banks and Trust Companies. You shall
have no liability to the Company or any other person for any losses,
claims, damages, liabilities and expenses (each a "Loss" and
collectively, the "Losses") arising from any act or omission on the
part of any broker or dealer in securities (a "Dealer"), bank or trust
company, or any other person, and neither you nor any of your
affiliates shall be liable for any Losses arising from your own acts
or omissions in performing your obligations as Dealer Manager or as a
Dealer hereunder or otherwise in connection with the Offer, except for
any such Losses which are finally judicially determined to have
resulted primarily and directly from your fraud, bad faith or gross
negligence or to have resulted primarily and directly from your breach
of this Agreement. In soliciting or obtaining tenders, no Dealer, bank
or trust company is to be deemed to be acting as your agent or the
agent of the Company or any of its affiliates, and you, as Dealer
Manager, are not to be deemed the agent of any Dealer, bank or trust
company or the agent or fiduciary of the Company or any of its
affiliates, equity holders, creditors or of any other person. You
shall not be and shall not be deemed for any purpose to act as a
partner or joint venturer of or a member of a syndicate or group with
the Company or any of its affiliates in connection with the Offer, any
purchase of the Warrants, or otherwise, and neither the Company nor
any of its affiliates shall be deemed to act as your agent. The
Company shall have sole authority for the acceptance or rejection of
any and all tenders.
4. The Offer Material. The Company agrees to furnish you, at their
expense, with as many copies as you may reasonably request of the
Letter of Transmittal, the Offer Statement on Schedule 13E-4 (together
with all exhibits, amendments and supplements thereto, the "Schedule")
filed or to be filed by the Company with the Securities and Exchange
Commission (the "Commission") and any other documents filed or to be
filed with the Commission as exhibits to the Schedule (including,
without limitation, press releases, advertisements and other
communications), all statements and other documents filed or to be
filed with the Commission or any other federal, state, local or
foreign governmental or regulatory authorities or any court (each an
"Other Agency" and collectively, the "Other Agencies") and any
amendments or supplements to any such statements and documents (the
definitive forms of all of the foregoing materials are hereinafter
collectively referred to as the "Offer Material") to be used by the
Company in connection with the Offer, and you are authorized to use
copies of the Offer Material in connection with the Offer. The Offer
Material has been or will be prepared and approved by, and is the sole
responsibility of, the Company.
You hereby agree, as Dealer Manager, that you will not disseminate any
written material for tenders of the Warrants pursuant to the Offer
other than the Offer Material, and you agree that you will not make
any statements other than the statements that are set forth in the
Offer Material or as otherwise authorized by the Company.
The Company agrees that no Offer Material will be used in connection
with the Offer or filed with the Commission or any Other Agency with
respect to the Offer without first consulting with the Dealer Manager.
In the event that the Company uses or permits the use of any Offer
Material in connection with the Offer or files any such material with
the Commission or any Other Agency without your prior approval of any
material change, then you shall be entitled to withdraw as Dealer
Manager in connection with the Offer without any liability or penalty
to you or any Indemnified Person (as hereinafter defined), and you
shall remain entitled to the indemnification provided in Section 11
hereof and to receive the payment of all fees and expenses payable
under this Agreement which have accrued to the date of such withdrawal
or would otherwise be due to you on such date. If you withdraw as
Dealer Manager, the fees accrued and reimbursement for your expenses
through the date of such withdrawal shall be paid to you promptly
after such date. In addition, the Company has the right to terminate
this Agreement if you shall have breached, in any material respect,
any of your material representations, warranties, agreements or
covenants herein.
5. Compensation. The Company agrees to pay you, as compensation for your
services as Dealer Manager in connection with the Offer, a fee of $.04
per Warrant for each Warrant validly tendered and not withdrawn in the
Offer, to be offset against the fee of $25,000, payable on the date
hereof by the Company.
6. Expenses of Dealer Manager and Others. In addition to your
compensation for your services hereunder pursuant to Section 5 hereof,
the Company agrees to pay directly, or reimburse you, as the case may
be, for (i) all expenses incurred by you relating to the preparation,
printing, filing, mailing and publishing of all Offer Material, (ii)
all fees and expenses of the Depositary, (iii) all advertising charges
in connection with the Offer, including those of any public relations
firm or other person or entity rendering services in connection
therewith, to the extent there are any, (iv) all fees, if any, payable
to Dealers (including you), and banks and trust companies as
reimbursement for their customary mailing and handling expenses
incurred in forwarding the Offer Material to their customers and (v)
all other reasonable fees and expenses incurred by you in connection
with the Offer or otherwise in connection with the performance of your
services hereunder (including fees and disbursements of your legal
counsel, not to exceed $11,000). All payments to be made by the
Company pursuant to this Section 6 shall be made promptly against
delivery to the Company of statements therefor. The Company shall be
liable for the foregoing payments whether or not the Offer is
commenced, withdrawn, terminated or canceled prior to the purchase of
any Warrants or whether the Company or any of its subsidiaries or
affiliates acquires any Warrants pursuant to the Offer or whether you
withdraw pursuant to Section 4 hereof, unless the Dealer Manager has
materially breached any of its material obligations under this
Agreement.
7. Warrantholder Lists. The Company will cause you to be provided with
cards or lists or other records in such form as you may reasonably
request showing the names and addresses of, and the number of Warrants
held by, the holders of Warrants as of a recent date and will cause
you to be advised from day to day during the period of the Offer as to
any transfers of record of Warrants. You agree that you will use such
information only in connection with the Offer.
8. Sufficient Funds. The Company represents and warrants to you that it
has or, at the time it becomes obligated to purchase Warrants under
the Offer, will have, sufficient funds to enable it to pay, and the
Company hereby agrees that it will pay promptly, in accordance with
the terms and conditions of the Offer and Sections 5 and 6 hereof, the
purchase price (and related costs) for the Warrants which the Company
has offered, and which the Company may be required, to purchase under
the Offer, and the fees and expenses payable hereunder, subject to the
Company's right, as and to the extent set forth in the Offer Materials
or as otherwise permitted by law, not to purchase Warrants.
9. Additional Representations and Warranties of the Company. The Company
represents and warrants to you that:
a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or the ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or to be in good standing, considering all such cases
in the aggregate, would not have a material adverse effect on the
business, properties, financial position or results of operations
of the Company and all of its subsidiaries and affiliates taken
as a whole, as the case may be.
b) The Company has full corporate power and authority to take and
has duly taken all necessary corporate action to authorize (i)
the Offer (including any related borrowings by the Company or any
of its subsidiaries or affiliates), (ii) the purchase by the
Company of Warrants pursuant to the Offer and (iii) the
execution, delivery and performance of this Agreement, and this
Agreement has been duly executed and delivered on behalf of the
Company and, assuming due authorization, execution and delivery
of this Agreement by you, is a legal, valid and binding
obligation of the Company enforceable against it in accordance
with its terms, except that (a) the enforceability hereof may be
limited by (x) bankruptcy, insolvency, reorganization, moratorium
and other laws now or hereafter in effect relating to creditors'
rights generally and (y) general principles of equity and (b)
indemnification and contribution provisions contained herein may
not be enforceable.
c) The Company has duly filed, or will have duly filed the Schedule
as required by and pursuant to the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated by
the Commission thereunder (collectively, the "Exchange Act"),
copies of which (including the documents filed or to be filed
therewith as exhibits thereto) in the form filed or to be filed,
have been or will be promptly furnished to you. The Schedule
complies, and all forms of all such other Offer Material to be
filed with the Commission or published or distributed to holders
of the Warrants will comply, in all material respects, with the
applicable provisions of the Exchange Act, and neither the
Schedule nor any of such other Offer Material contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading;
provided, however, that no representation is made with respect to
any statements contained in, or any matter omitted from, the
Schedule or any other Offer Material in reliance upon and in
conformity with information furnished or confirmed in writing by
you to the Company expressly for use therein.
d) The Company will file, as required, any and all necessary
amendments or supplements to the Schedule and the other documents
filed with the Commission relating to the Offer and will promptly
furnish to you true and complete copies of each such amendment
and supplement upon the filing thereof.
e) The Offer (including any related borrowings by the Company or any
of its subsidiaries or affiliates), the purchase by the Company
of Warrants pursuant to the Offer, and the execution, delivery
and performance of this Agreement by the Company, comply and will
comply in all material respects with all applicable requirements
of federal, state, local and foreign law, including, without
limitation, any applicable regulations of the Commission and
Other Agencies, and all applicable judgments, orders or decrees;
and no consent, authorization, approval, order, exemption,
registration, qualification or other action of, or filing with or
notice to, the Commission or any Other Agency is required in
connection with the execution, delivery and performance of this
Agreement by the Company, the making or consummation by the
Company of the Offer or the consummation of the other
transactions contemplated by this Agreement, except where the
failure to obtain or make such consent, authorization, approval,
order, exemption, registration, qualification or other action or
filing or notification would not materially adversely affect the
ability of the Company to execute, deliver and perform this
Agreement or to commence and consummate the Offer in accordance
with its terms. All such required consents, authorizations,
approvals, orders, exemptions, registrations, qualifications and
other actions of and filings with and notices to the Commission
and the Other Agencies will have been obtained, taken or made, as
the case may be, and all statutory or regulatory waiting periods
will have elapsed, prior to the purchase of the Warrants pursuant
to the Offer.
f) The Offer (including any related borrowings by the Company or any
of its subsidiaries or affiliates), the purchase of the Warrants
by the Company pursuant to the Offer, and the execution, delivery
and performance of this Agreement by the Company, do not and will
not (i) conflict with or result in a violation of any of the
provisions of the certificate of incorporation or by-laws (or
similar organizational documents) of the Company, (ii) conflict
with or violate in any material respect any law, rule,
regulation, order, judgment or decree applicable to the Company
or by which any property or asset of the Company or any of its
subsidiaries is or may be bound or (iii) result in a breach of
any of the material terms or provisions of, or constitute a
default (with or without due notice and/or lapse of time) under,
any loan or credit agreement, indenture, mortgage, note or other
material agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or any of
their respective properties or assets is or may be bound, except
that clauses (ii) and (iii) do not apply to conflicts or
violations which would not have a material adverse effect on the
Company.
g) No stop order, restraining order or denial of an application for
approval has been issued and no investigation, proceeding or
litigation has been commenced or, to the best of the Company=s
knowledge, threatened before the Commission or any Other Agency
with respect to the making or consummation of the Offer
(including the obtaining or use of funds to purchase Warrants
pursuant thereto) or the consummation of the other transactions
contemplated by this Agreement or with respect to the ownership
of the Warrants by the Company or any of its subsidiaries or
affiliates.
h) The Company is not, nor will it be as a result of the purchase by
the Company of Warrants that it may become obligated to purchase
pursuant to the terms of the Offer, an "investment company" under
the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated by the Commission thereunder.
i) Each of the representations and warranties set forth in this
Agreement will be true and correct on and as of the date on which
the Offer is commenced and on and as of the date on which any
Warrants are purchased pursuant to the Offer.
10. Notification of Certain Events. The Company shall advise you promptly
of (i) the occurrence of any event which could cause the Company to
withdraw rescind or terminate the Offer or would permit it to exercise
any right not to purchase Warrants tendered under the Offer, (ii) the
occurrence of any event, or the discovery of any fact, the occurrence
or existence of which it believes would require the making of any
change in any of the Offer Material then being used or would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, (iii) any proposal or requirement
to make, amend or supplement any filing required by the Exchange Act
in connection with the Offer or to make any filing in connection with
the Offer pursuant to any other applicable law, rule or regulation,
(iv) the issuance by the Commission or any Other Agency of any comment
or order or the taking of any other action concerning the Offer (and,
if in writing, will furnish you with a copy thereof), (v) any material
developments in connection with the Offer or the financing thereof,
including, without limitation, the commencement of any lawsuit
concerning the Offer and (vi) any other information relating to the
Offer, the Offer Material or this Agreement which you may from time to
time reasonably request.
11. Indemnification.
---------------
a) The Company agrees to hold harmless and indemnify you (including
any affiliated companies) and any officer, director, partner,
shareholder, employee or agent (including, for the purposes of
this Section 11, any broker-dealer acting on your behalf and at
your request in connection with the Offer) of you or any of such
affiliated companies and any entity or person controlling (within
the meaning of Section 20(a) of the Exchange Act) you, including
any affiliated companies (collectively, the "Indemnified
Persons"), from and against any and all Losses whatsoever
(including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation or
proceeding, commenced or threatened, or any claims whatsoever
whether or not resulting in any liability) (i) arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Offer Material, the Schedule or in
any other material used by the Company, or authorized by the
Company in writing for use in connection with the Offer or the
transactions contemplated thereby, or arising out of or based
upon the omission or alleged omission to state in any such
document a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (other
than statements or omissions made in reliance on information
furnished by you to the Company expressly for use therein), (ii)
arising out of or based upon any withdrawal by the Company of, or
failure by the Company to make or consummate, the Offer or the
transactions contemplated thereby or any other failure to comply
with the terms and conditions specified in the Offer Material,
(iii) arising out of the breach or alleged breach by the Company
of any representation, warranty or covenant set forth in this
Agreement, or (iv) otherwise arising out of, relating to or in
connection with the Offer, the other transactions described in
the Offer Material or your services as Dealer Manager hereunder.
The Company shall not, however, be responsible for any Loss
pursuant to clause (iv) of the preceding sentence of this Section
11(a) which has been finally judicially determined to have
resulted primarily and directly from the bad faith or gross
negligence on the part of any Indemnified Person, other than any
Loss arising out of or resulting from actions performed at the
request of, with the consent of, or in conformity with actions
taken or omitted to be taken by, the Company.
b) The Company and you agree that if any indemnification sought by
any Indemnified Person pursuant to this Section 11 is unavailable
for any reason or insufficient to hold you harmless, then the
Company and you shall contribute to the Losses for which such
indemnification is held unavailable or insufficient in such
proportion as is appropriate to reflect the relative benefits
received (or anticipated to be received) by the Company, on the
one hand, and actually received by you, on the other hand, in
connection with the transactions contemplated by this Agreement
or, if such allocation is not permitted by applicable law, not
only such relative benefits but also the relative faults of the
Company, on the one hand, and you, on the other hand, as well as
any other equitable considerations, subject to the limitation
that in any event the aggregate contribution by you to all Losses
with respect to which contribution is available hereunder shall
not exceed the fees actually received by you in connection with
your engagement hereunder. It is hereby agreed that the relative
benefits to the Company, on the one hand, and you, on the other
hand, with respect to the Offer and the transactions contemplated
thereby shall be deemed to be the same proportion as (i) the
total value paid or proposed to be paid to holders of the
Warrants pursuant to the Offer (whether or not the Offer or such
transactions are consummated) bears to (ii) the fees actually
received by you from the Company in connection with your
engagement hereunder.
c) The foregoing rights to indemnity and contribution shall be in
addition to any other right which you and the other Indemnified
Persons may have against the Company at common law or otherwise.
If any litigation or proceeding is brought against any
Indemnified Person in respect of which indemnification may be
sought against the Company pursuant to this Section 11, such
Indemnified Person shall promptly notify the Company in writing
of the commencement of such litigation or proceeding, but the
failure so to notify the Company shall relieve the Company from
any liability which it may have hereunder only if, and to the
extent that, such failure results in the forfeiture by the
Company of substantial rights and defenses, and will not in any
event relieve the Company from any other obligation or liability
that they may have to any Indemnified Person other than under
this Agreement. In case any such litigation or proceeding shall
be brought against any Indemnified Person and such Indemnified
Person shall notify the Company in writing of the commencement of
such litigation or proceeding, the Company shall be entitled to
participate in such litigation or proceeding, and, after written
notice from the Company to such Indemnified Person, to assume the
defense of such litigation or proceeding with counsel of its
choice at its expense; provided, however, that such counsel shall
be satisfactory to the Indemnified Person in the exercise of its
reasonable judgment. Notwithstanding the election of the Company
to assume the defense of such litigation or proceeding, such
Indemnified Person shall have the right to employ separate
counsel and to participate in the defense of such litigation or
proceeding, and the Company shall bear the reasonable fees, costs
and expenses of such separate counsel and shall pay such fees,
costs and expenses at least quarterly (provided that with respect
to any single litigation or proceeding or with respect to several
litigations or proceedings involving substantially similar legal
claims, the Company shall not be required to bear the fees, costs
and expenses of more than one such counsel) if (i) in the
reasonable judgment of such Indemnified Person the use of counsel
chosen by the Company to represent such Indemnified Person would
present such counsel with a conflict of interest, (ii) the
defendants in, or targets of, any such litigation or proceeding
include both an Indemnified Person and the Company, and such
Indemnified Person shall have been advised by its counsel that
representation of such Indemnified Person and the Company by the
same counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential differing
interests between them (in which case the Company shall not have
the right to direct the defense of such action on behalf of the
Indemnified Person), (iii) the Company shall not have employed
counsel satisfactory to such Indemnified Person, in the exercise
of the Indemnified Person's reasonable judgment, to represent
such Indemnified Person within a reasonable time after notice of
the institution of such litigation or proceeding or (iv) the
Company shall authorize in writing such Indemnified Person to
employ separate counsel at the expense of the Company. In any
action or proceeding the defense of which the Company assumes,
the Indemnified Person shall have the right to participate in
such litigation and retain its own counsel at such Indemnified
Person's own expense. The Company and you agree to notify the
other promptly of the assertion of any claim against it, any of
its officers or directors or any entity or person who controls it
within the meaning of Section 20(a) of the Exchange Act in
connection with the Offer. The foregoing indemnification
commitments shall apply whether or not the Indemnified Person is
a formal party to such litigation or proceeding.
d) The Company also agrees to reimburse each Indemnified Person for
reasonable out-of-pocket expenses (including fees and
disbursements of counsel) as they are incurred by such
Indemnified Person in connection with investigating, preparing
for, defending or providing evidence (including appearing as a
witness) with respect to any action, claim, investigation,
inquiry, arbitration or other proceeding referred to in this
Section 11 or enforcing this Agreement, whether or not in
connection with pending or threatened litigation in which any
Indemnified Person is a party.
e) The Company agrees that it will not, without your prior written
consent, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding
in respect of which indemnification may be sought hereunder
(whether or not you, any other Indemnified Person or the Company
is an actual or potential party), unless such settlement,
compromise or consent includes an unconditional release of each
Indemnified Person from all liability arising out of such claim,
action or proceeding.
12. Conditions to Obligations of the Dealer Manager. Your obligations
hereunder shall at all times be subject to the conditions that (a) all
representations, warranties and other statements of the Company
contained herein are now, and at all times during the period of the
Offer shall be, true and correct in all material respects and (b) the
Company at all times shall have performed in all material respects all
of its obligations hereunder theretofore to be performed.
13. Termination. This Agreement shall terminate upon the expiration,
termination or withdrawal of the Offer or upon withdrawal by you, or
termination by us of you, as Dealer Manager pursuant to Section 4
hereof, it being understood that Sections 3, 5, 6, 8, 9, 11, 12, 14,
15, 16, 19, 20, 21 and 22 hereof shall survive any termination of this
Agreement.
14. Notices. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and shall be given
(and shall be deemed to have been given upon receipt) by delivery in
person, by cable, by telecopy, by telegram, by telex, by registered or
certified mail (postage prepaid, return receipt requested) or by
recognized overnight delivery service (such as Federal Express) to the
applicable part at the addresses indicated below:
a) if to you:
Ladenburg Thalmann & Co. Inc.
590 Madison Avenue
New York, New York 10022
Telecopy No.: 212-409-2173
Attention: Seth E. Lemler
with a copy to:
Fulbright & Jaworski LLP
666 Fifth Avenue
New York, NY 10103
Telecopy No.: 212-752-5958
Attn: Warren J. Nimetz, Esq.
b) if to the Company:
Audiovox Corporation
150 Marcus Boulevard
Hauppauge, New York 11788
Telecopy No.: 516-273-6922
Attention: John J. Shalam
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1 New York Plaza
New York, New York 10004
Telecopy No.: 212-859-4000
Attention: Stuart H. Gelfond, Esq.
15. Consent to Jurisdiction: Service of Process. The Company hereby (a)
submits to the jurisdiction of any New York State or Federal court
sitting in the City of New York with respect to any actions and
proceedings arising out of or relating to this Agreement, (b) agrees
that all claims with respect to such actions or proceedings may be
heard and determined in such New York State or Federal court, (c)
waives the defense of an inconvenient forum, (d) agrees not to
commence any action or proceeding relating to this Agreement other
than in a New York State or Federal court sitting in the City of New
York and (e) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law.
16. Joint and Several Obligations, Etc. In the event that the Company
makes the Offer through one or more of its affiliates, each reference
in this Agreement to the Company shall be deemed to be a reference to
the Company and any such affiliates, and the representations,
warranties, covenants and agreements of the Company and any such
affiliates hereunder shall be joint and several.
17. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject
matter hereof.
18. Amendment. This Agreement may not be amended except in writing signed
by each party to be bound thereby.
19. Governing Law. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED IN AND
TO BE PERFORMED IN THAT STATE WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
20. Waiver of Jury Trial. THE COMPANY HEREBY AGREES ON ITS OWN BEHALF AND,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS SECURITY
HOLDERS, TO WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, COUNTERCLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING,
WITHOUT LIMITATION, THE OFFER).
21. Counterparts; Severability. This Agreement may be executed in two or
more separate counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in
any other jurisdiction.
22. Parties in Interest. This Agreement, including rights to indemnity and
contribution hereunder, shall be binding upon and inure solely to the
benefit of each party hereto, the Indemnified Persons and their
respective successors, heirs and assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
Please indicate your willingness to act as Dealer Manager and your
acceptance of the foregoing provisions by signing in the space provided
below for that purpose and returning to us a copy of this Agreement so
signed, whereupon this Agreement and your acceptance shall constitute a
binding agreement between us.
Very truly yours,
AUDIOVOX CORPORATION
By:
--------------------------------
Charles M. Stoehr
Senior Vice President
and Chief Financial Officer
Accepted as of the
date first above written:
LADENBURG THALMANN & CO. INC.
By:
--------------------------
Seth E. Lemler
Managing Director