SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 2)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
Dynamics Corporation of America
(Name of Subject Company)
Dynamics Corporation of America
(Name of Person(s) Filing Statement)
Common Stock, par value $0.10 per share
(including the associated Series A Cumulative
Participating Preferred Stock Purchase Rights)
(Title of Class of Securities)
268039 10 4
(CUSIP Number of Class of Securities)
Henry V. Kensing
Vice President, General
Counsel and Secretary
475 Steamboat Road
Greenwich, Connecticut 06830-7197
(203) 869-3211
(Name, address and telephone number of person authorized
to receive notice and communications on behalf of the
person(s) filing statement).
With a Copy to:
Alan C. Myers
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
This Amendment No. 2 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9,
as amended (the "Schedule 14D-9"), of Dynamics
Corporation of America (the "Company"), filed in
connection with the tender offer by CTS First Acquisition
Corp., a wholly owned subsidiary of CTS Corporation, for
shares of common stock (including the associated Series A
Cumulative Participating Preferred Stock Purchase Rights)
of the Company. Capitalized terms used herein shall have
the definitions set forth in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(b) is hereby amended by adding the following
at the end thereof:
On May 28, 1997, CTS and Sub sent a letter to the
Company requesting that the Company Board reconfirm its
approval and recommendation of the CTS Offer, the CTS
Merger and the Merger Agreement. The Merger Agreement
provides that CTS may terminate the Merger Agreement if
the Company Board fails to reconfirm its approval or
recommendation of the CTS Offer, the CTS Merger or the
Merger Agreement within five business days after a
written request from CTS to do so.
On June 2, 1997, CTS increased the CTS Offer price
to $56.25 per Share.
On June 4, 1997, the Company Board met with its
financial and legal advisors to consider the amended WHX
Tender Offer and the May 28, 1997 letter from CTS and
Sub. The Company Board resolved to reconfirm its
approval and recommendation of the CTS Offer, the CTS
Merger and the Merger Agreement for the reasons set forth
under "Reasons for the Recommendation" in the Schedule
14D-9, as well as the following:
(a) based on the closing price of $68 5/8 per
CTS Share on the New York Stock Exchange on June 4,
1997, the blended value of the consideration to be
received by the Company's shareholders pursuant to
the CTS Offer and the CTS Merger is between $58.32
per Share (assuming the CTS Offer is fully
subscribed) and $59.36 per Share (assuming the
number of shares purchased in the CTS Offer is only
that necessary to satisfy the Minimum Condition);
(b) the trading price per CTS Share would have
to decline to below $63 3/8 (assuming the CTS Offer is
fully subscribed) and $63 5/8 (assuming the number of
shares purchased in the CTS Offer is only that
necessary to satisfy the Minimum Condition) in order
for the blended value of the consideration to be
received by the Company's shareholders pursuant to
the CTS Offer and the CTS Merger to be less than $56
per Share, the price offered pursuant to the WHX
Tender Offer;
(c) while there can be no assurance as to the
level at which the CTS Shares will trade in the
future, based upon CTS' recent operating performance
and its projected operating performance as set forth
in the Offer to Purchase, the ratio of its stock
price to various income statement and balance sheet
line items as compared to such ratios for certain
companies considered comparable to CTS by Wasserstein
Perella, and the increased liquidity and breadth of
ownership in the CTS Shares expected to result from
the CTS Merger, there appeared to be a reasonable
possibility of additional upside potential in the
trading price of the CTS Shares and, consequently,
the value ultimately to be realized by the Company's
shareholders as a result of the CTS Merger; and
(d) the consideration offered in the CTS Offer
is higher than that offered in the WHX Tender Offer,
thereby providing greater value for those
shareholders who wish to receive cash for their
Shares.
On June 4, 1997, the Company sent a letter to CTS
informing CTS that the Company Board had reconfirmed its
approval and recommendation of the CTS Offer, the CTS
Merger and the Merger Agreement
In addition, at its June 4 meeting, the Company
Board determined not to redeem the Rights or otherwise
amend the Company Rights Plan to make it inapplicable to
the WHX Tender Offer and not to approve the WHX Tender
Offer for purposes of Section 912(b) of the NYBCL.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended by adding the following at
the end thereof:
Exhibit
No. Description
Exhibit 16 Letter, dated May 28, 1997, from CTS
Corporation to Dynamics Corporation
of America.
Exhibit 17 Letter, dated June 4, 1997, from
Dynamics Corporation of America to
CTS Corporation.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Dated: June 5, 1997 DYNAMICS CORPORATION
OF AMERICA
By: /s/ Henry V. Kensing
-------------------------
Henry V. Kensing
Vice President, General
Counsel and Secretary
EXHIBIT INDEX
Exhibit
No. Description
Exhibit 16 Letter, dated May 28, 1997, from CTS
Corporation to Dynamics Corporation of
America (incorporated by reference to
Exhibit (c)(6) to Amendment No. 3 to the
Schedule 14D-1, as filed with the
Commission on June 2, 1997)
Exhibit 17 Letter, dated June 4, 1997, from Dynamics
Corporation of America to CTS Corporation
Dynamics Corporation of America
475 Steamboat Road, Greenwich, Conn. 06830-7197
203 869-3211 212 661-3800
FAX: 203 869-8708
June 4, 1997
CTS Corporation
CTS First Acquisition Corp
905 West Boulevard North
Elkhardt, Indiana 46514
Attn: Mr. Joseph P. Walker
Chairman of the Board
Gentlemen:
By letter dated May 28, 1997, CTS Corporation
("CTS") and CTS First Acquisition Corp. ("Sub") requested
that within five business days thereof the Board of
Directors of Dynamics Corporation of America ("DCA")
reconfirm its approval and recommendation of the
Agreement and Plan of Merger, dated as of May 9, 1997,
among CTS, Sub and DCA and the Offer and Merger
contemplated thereby.
In accordance with your request, I am writing to
inform you that at a meeting held on June 4, 1997, the
DCA Board adopted resolutions reconfirming such approval
and recommendation.
Very truly yours,
DYNAMICS CORPORATION OF AMERICA
By /s/ Andrew Lozyniak
------------------------------
Andrew Lozyniak
Chairman of the Board
cc: Jones, Day, Reavis & Pogue
599 Lexington Avenue, 30th Floor
New York New York 10022
Attn: Robert Profusek, Esq.
