Preliminary Copy
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 241.14a-11(c)
or section 240.14a-12
DYNATECH CORPORATION
(Name of Registrant as Specified In Its Charter)
SC FUNDAMENTAL INC., THE SC FUNDAMENTAL VALUE FUND, L.P.,
SC FUNDAMENTAL VALUE BVI, INC., SC-BVI PARTNERS,
SC FUNDAMENTAL VALUE BVI, LTD.,
GARY N. SIEGLER AND PETER M. COLLERY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or14a-6(i)(2).
[X] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
______________________________________________________________
2) Aggregate number of securities to which transaction
applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:<F1>
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
[FN]
<F1> Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid
_________________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________________
3) Filing Party:
_________________________________________________
4) Date Filed:
_________________________________________________
<PAGE>
PRELIMINARY COPY
DYNATECH STOCKHOLDERS COMMITTEE
712 Fifth Avenue
New York, NY 10019
PROXY STATEMENT OF THE
DYNATECH STOCKHOLDERS COMMITTEE
IN OPPOSITION TO THE BOARD OF DIRECTORS
Dynatech Corporation
1994 Annual Meeting of Stockholders
Scheduled for July 26, 1994
_______________________
TO ALL STOCKHOLDERS OF DYNATECH CORPORATION:
This Proxy Statement is being furnished to holders (the
"Stockholders") of the Common Stock, par value $.20 per share (the
"Common Stock"), of Dynatech Corporation ("Dynatech" or the
"Company") in connection with the solicitation of Proxies by the
Dynatech Stockholders Committee (the "Committee") for use in
connection with the Company's 1994 Annual Meeting which is
scheduled to be held on July 26, 1994, at 10:00 A.M. at the
Goodwin, Proctor & Hoar Conference Center, 2nd Floor, Exchange
Place, Boston, MA or at any adjournments or postponements thereof
(the "Annual Meeting").
The Committee, consisting of substantial holders of the
Company's Common Stock, is seeking your support (a) to elect their
nominees (constituting a minority of the Board of Directors) to
the Board of Directors, (b) for their proposal to recommend to
the Board of Directors that it retain a nationally
recognized investment banking firm to value the Company and its
businesses and conduct a sale of the Company in a fair process, at
the highest price obtainable, or a substantial restructuring with
a view towards maximizing Stockholder value (Proposal No. 2) and
(c) against the 1994 Stock Option and Incentive Plan proposed by
the Board of Directors (Proposal No. 3).
If you have any questions or have any difficulty
granting proxies, you are invited to contact Georgeson & Company
Inc. at toll-free (800) 223-064. Banks and brokers call (212)
440-9800 (collect).
<PAGE>
SHARES REPRESENTED BY A VALID UNREVOKED BLUE PROXY CARD
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, SHARES
REPRESENTED BY A BLUE PROXY CARD WILL BE VOTED FOR THE ELECTION OF
THE COMMITTEE'S NOMINEES AS DIRECTORS OF THE COMPANY; FOR THE
PROPOSAL TO BE OFFERED BY THE COMMITTEE (THE "COMMITTEE
PROPOSAL"), AS SET FORTH HEREIN UNDER THE CAPTION "COMMITTEE
PROPOSAL"; AGAINST THE BOARD'S 1994 STOCK OPTION AND INCENTIVE PLAN
PROPOSAL, AS DESCRIBED IN THE COMPANY'S BOARD OF DIRECTORS' PROXY
STATEMENT (THE "BOARD'S PROXY STATEMENT"); AND WILL BE VOTED IN THE
DISCRETION OF THE PERSONS NAMED THEREIN ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE MEETING. PROXIES MAY BE REVOKED AT
ANY TIME PROVIDED THAT A WRITTEN REVOCATION WHICH CLEARLY
IDENTIFIES THE PROXY BEING REVOKED IS EXECUTED AND
DELIVERED TO THE COMMITTEE, C/O GEORGESON & COMPANY INC. AT WALL
STREET PLAZA, NEW YORK, NEW YORK 10005 OR TO THE SECRETARY OF THE
COMPANY AT DYNATECH CORPORATION, 3 NEW ENGLAND EXECUTIVE PARK,
BURLINGTON, MASSACHUSETTS 01803-5087. A LATER DATED PROXY
AUTOMATICALLY REVOKES AN EARLIER DATED ONE. YOU MAY ALSO REVOKE
ANY PROXY GIVEN BY ATTENDING THE ANNUAL MEETING AND VOTING YOUR
SHARES OF COMMON STOCK.
This Proxy Statement and BLUE Proxy Card are first
being sent to Stockholders on or about July __, 1994.
According to the Board's Proxy Statement, as of the
close of business on June 13, 1994 (the "Record Date"), there were
9,297,009 shares of Common Stock outstanding. Each share of Common
Stock is entitled to one vote. Only Stockholders of record at the
close of business on the Record Date are entitled to vote at the
Annual Meeting.
IMPORTANT
Carefully review this Proxy Statement and the enclosed
materials. YOUR PROXY IS IMPORTANT. No matter how many or how few
shares you own, please vote FOR the Committee's nominees, FOR
Proposal No. 2 and AGAINST Proposal No. 3, all as set forth herein,
by so indicating and by signing, dating and mailing the enclosed
BLUE Proxy Card promptly. You CANNOT use the Company's WHITE Proxy
Card to vote for the Committee's nominees.
IF YOU HAVE ALREADY MAILED THE WHITE PROXY CARD
SUPPLIED TO YOU BY THE COMPANY'S BOARD OF DIRECTORS, YOU HAVE EVERY
RIGHT TO CHANGE YOUR VOTE BY SIGNING, DATING AND RETURNING THE
ENCLOSED BLUE PROXY CARD IN THE ENCLOSED BLUE ENVELOPE. Remember,
your latest dated proxy determines your vote at the Annual Meeting.
<PAGE>
If you own your shares in the name of a brokerage firm,
bank nominee or other institution, only they can vote your shares
of Common Stock. Accordingly, you should contact the person
responsible for your account and give instructions with respect to
the granting of proxies. Your broker cannot vote your shares
unless he or she receives your specific instructions.
If you have any questions or have any difficulty
granting proxies, you are invited to contact Georgeson & Company
Inc. at toll-free (800) 223-2064. Banks and Brokers call (212)
440-9800 (collect).
<PAGE>
BACKGROUND OF AND REASONS FOR THE PROXY SOLICITATION
In opposition to the Board of Directors, the Committee
is seeking to solicit the proxies of Stockholders to be used: (i)
to vote FOR the election of Gary N. Siegler, Peter M. Collery and
Curtis Macnguyen (the "Committee's Slate") as directors of the
Company to serve until their successors are duly elected and
qualified; (ii) to vote FOR Proposal No. 2 (the "Committee
Proposal") urging the retention by the Company of a nationally
recognized investment banking firm to value the Company and its
businesses and conduct a sale of the Company or a substantial
restructuring with a view towards maximizing Stockholder value in
the near term (the "Committee Proposal"); (iii) to vote AGAINST
Proposal No. 3 -- the 1994 Stock Option and Incentive Plan
proposed by the Board of Directors; and (iv) to vote in their
discretion on such other matters as may properly come before the
meeting or any adjournments or postponements thereof.
The Committee owns an aggregate of 9.5% of the
9,297,009 shares of Common Stock which were outstanding on the
Record Date according to the Board's Proxy Statement. According to
filings with the Securities and Exchange Commission, the
Committee's share ownership constitutes the largest holding in the
Company. In contrast, the nominees of the Board of
Directors, including the President and Chief Executive Officer own,
as a group, less than 0.6% of the Company's Common Stock which does
not constitute a significant financial stake in the Company. More
importantly, the Committee believes management's performance over
the last five years has failed to provide
adequate returns to Stockholders.
DYNATECH'S STOCK HAS SIGNIFICANTLY UNDERPERFORMED BOTH THE S&P HIGH
TECH COMPOSITE INDEX AND THE S&P 500 COMPOSITE INDEX.
The following Chart, showing the five year cumulative
total return for Dynatech from March 31, 1989 to March 31, 1994, is
reproduced from page 11 of the Board's Proxy Statement.
<PAGE>
PLEASE STUDY THIS CHART CAREFULLY
<TABLE>
Comparison of Five-Year Cumulative Total Return
For the Year Ended March 31, 1994
<CAPTION>
Measurement
Period (Fiscal Dynatech S&P 500 High-Tech
Year Covered) Corp. Index Composite
<S> <C> <C> <C>
3/1989 100.00 100.00 100.00
3/1990 86.1 119.27 107.95
3/1991 112.50 136.46 117.85
3/1992 109.72 151.53 120.60
3/1993 148.61 174.60 132.52
3/1994 102.78 177.17 155.86
Compounded Annual Rate of
Return from March 31, 1989
through March 31, 1994<F1> 0.55% 12.12% 9.28%
_________________
<FN>
<F1> The compounded annual rate of return set forth is not on the
chart in the Board's Proxy Statement but is based on the informa-
tion therein.
</TABLE>
The Chart shows that a hypothetical investment on March
31, 1989 of $100 in each of the Common Stock of Dynatech, the S&P
500 Index and the S&P High Tech Composite Index would have
returned to the investor on March 31, 1994, $102.78 for the
Dynatech investment, versus $177.17 for the S&P 500 Index and
$155.86 for the S&P High Tech Composite Index. The comparative
compounded annual rate of return for the period from March 31, 1989
through March 31, 1994 also shows how dramatically Dynatech has
underperformed these indices.
Set forth below are some of the reasons the Committee
believes that management's performance has been inadequate and why
the Committee is seeking your votes in support of the
Committee's Slate and the Committee Proposal.
<PAGE>
THE COMMITTEE BELIEVES MANAGEMENT'S DEPLOYMENT OF CASH FLOW HAS
FAILED TO GENERATE SATISFACTORY RETURNS.
The Committee believes that Dynatech's performance is
woefully inadequate given the degree of reinvestment of cash flow
into the Company's businesses. According to information
contained in the Company's Annual Reports to Stockholders during
its 1989 through 1994 fiscal years, rather than pay dividends to
Stockholders, Dynatech reinvested the substantial majority of its
Gross Cash Flow<F1> in its businesses in the form of R&D
expenses, capital expenditures, and cash paid for acquisitions.
Notwithstanding this massive reinvestment which was presumably
undertaken to increase future cash flows, the Company's Gross Cash
Flow in 1994 was barely above the 1989 level, and its Net Cash
Flow<F2> was below the 1989 level as shown in the table below.
[FN]
<F1> "Gross Cash Flow" is defined as earnings before interest, R&D, income
taxes, depreciation, amortization and unusual items.
<F2> "Net Cash Flow" is defined as Gross Cash Flow minus the sum of R&D
expenditures, capital expenditures and acquisition expenditures.
<TABLE>
Gross Cash Flow; Expenditures for R&D,
Capital Items and Acquisitions; Net Cash Flow
(millions of dollars)
<CAPTION>
Years Ending March 31
Fiscal year 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Gross Cash Flow $93.6 $116.2 $107.3 $108.5 $95.6 $93.2
Less:
R&D 53.8 54.3 51.7 51.7 42.5 39.2
Capital expenditures 17.8 14.3 16.3 16.8 15.0 15.9
Acquisitions 2.8 5.6 22.6 17.4 8.8 12.2
Net cash flow $19.2 $42.0 $16.7 $22.6 $29.3 $25.9
</TABLE>
<PAGE>
DYNATECH'S SG&A AND R&D EXPENSES ARE MUCH HIGHER THAN THOSE OF ITS
PEERS.
Dynatech's expenditures for selling and general
administration ("SG&A") and research and development ("R&D") in
fiscal year 1994 as a percentage of total sales were considerably
<PAGE>
above those of its peers in the electronics industry as grouped by
Value Line Investment Survey (the "Value Line Group").
According to data contained in the Compusat information service
database, the average percentage of total sales spent by
companies in the Value Line Group for SG&A and R&D combined was 29%
in their recently completed fiscal year, as compared to 47% for
Dynatech. With respect to R&D, while the Committee
recognizes that a strong R&D budget is crucial, the Committee
believes that Dynatech has wasted much of its R&D spending on
projects that have generated little or no return. With respect to
SG&A, the Committee believes, on the basis of discussions it has
held with the Board's nominees for director, all of whom are
currently Board members, that such nominees do not have any valid
explanation for Dynatech's current level of SG&A spending. Furthermore
such nominees did not even acknowledge to the Committee that Dynatech's SG&A
spending is excessive when compared to that of the Company's peers.
UNDER THE CURRENT MANAGEMENT, THE COMPANY'S PROFITS HAVE
DETERIORATED SIGNIFICANTLY OVER THE PAST THREE QUARTERS.
In the last three fiscal quarters, the Company's
profits have decreased dramatically as set forth in the table
below. Under the stewardship of John F. Reno, who became
President and Chief Executive Officer of Dynatech in January of
1993, the Company, in the 4th quarter of fiscal year 1994,
reported its first quarterly loss in 23 years.
<PAGE>
<TABLE>
Reported Earnings Per Share
from Continuing Operations
<CAPTION>
Quarter 1994 1993
<S> <C> <C>
Second 0.35 0.53
Third 0.15 0.61
Fourth -3.70<F1> 0.63
_____________________
<FN>
<F1> Includes a $3.51 per share restructuring charge for
continuing operations. Excluding the restructuring charge, the
Company would have reported a loss of $.19 per share from
continuing operations.
</TABLE>
<PAGE>
THE COMPANY HAS FAILED TO MEET ANALYSTS' EARNINGS EXPECTATIONS FOR
THE LAST THREE QUARTERS.
In each of the last three quarters, the Company has
announced earnings that were significantly below the consensus
expectation of the Wall Street analysts who follow Dynatech. Set
forth below are the Institutional Brokers Estimate System
(I/B/E/S Inc.) consensus earnings estimates for Dynatech for the
fiscal quarters ending September 1993, December 1993, and March
1994, and the earnings actually reported for these quarters.
<PAGE>
<TABLE>
Actual Reported Earnings Compared to Analysts' Estimates
<CAPTION>
Actual
Reported
Earnings
Mean from
Anaylsts' Continuing
Date Estimates Operations Difference
<S> <C> <C> <C>
3/94 0.31 -0.19<F1> -0.50
12/93 0.50 0.15 -0.35
9/93 0.47 0.35 -0.12
<FN>
<F1> Excludes a $3.51 per share restructuring charge for
continuing operations.
</TABLE>
THE COMPANY HAS FAILED TO TAKE CERTAIN SIGNIFICANT CORPORATE
ACTIONS WHICH COULD RESULT IN SUBSTANTIAL INCREASES IN
STOCKHOLDER VALUE.
Dynatech is an agglomeration of some 42 different
businesses, each of which operates with a large degree of
autonomy. The Committee believes that Dynatech could sell or spin
off certain operations at prices which exceed their value to the
Company. By way of example, the Committee believes that the
Company's telecommunications testing equipment businesses
(together, "TTC") could be worth in excess of $200 million. This
belief is based upon statements made by Dynatech management at a
meeting between Dynatech management and a representative of the
Committee that TTC's sales for fiscal year 1994 approximated $130
million, its operating profit margin (i.e. earnings before
interest, taxes and amortization of intangibles divided by sales)
is in the "good teens" and that the business is expected to grow at
approximately 10% per year. Applying 16%, a conservative estimate
of a "good teens" operating profit margin, to a sales base of $130
million results in operating profits in excess of $20 million for
fiscal year 1994 for TTC. To value TTC's business, the Committee
multiplied the $20 million or more of
<PAGE>
operating profits by a valuation multiple of 10 chosen by the
Committee, based upon its view of TTC's current industry
dynamics, competitive position and solid growth prospects. This
results in a Committee estimated valuation for the TTC business in
excess of $200 million, or $21.51 per share which exceeds the
closing price of a share of Dynatech Common Stock as reported by
NASDAQ on June 20, 1994. This valuable asset represents less than
one-third of Dynatech's total business as measured by sales for
fiscal year 1994.
THE COMMITTEE AND THE BOARD'S NOMINEES DISAGREE ON THE NEED FOR
EXTRAORDINARY ACTION.
Representatives of the Committee made inquiries, on
June 10, 1994, of the Board's nominees for election as directors
regarding a variety of subjects designed to elicit the Board's
nominees' views regarding maximization of Stockholder value. In
the Committee's view, the Board's nominees' responses reflect a
relative satisfaction with the status quo. The Committee
considers this unacceptable.
Business as usual is not good enough. The Committee
believes the proper course of action for the Company is as set
forth in the Committee Proposal below.
Accordingly, after considering various alternatives,
the Committee decided to propose a slate of three directors and to
solicit proxies in support of such slate and in support of the
Committee Proposal. On June 10, 1994, The SC Fundamental Value
Fund, L.P. requested a list of Stockholders of the Company in
accordance with applicable state law to be used in connection with
the solicitation of proxies.
THE COMMITTEE BELIEVES THE COMPANY'S PROPOSED "RESTRUCTURING" IS
WHOLLY INADEQUATE.
In the Committee's view, the Company's proposed
restructuring is largely cosmetic and does not address the
serious problems described above. The Company's restructuring has
three essential elements: (i) writing off a substantial amount of
intangible assets; (ii) designating certain businesses for sale;
and (iii) incurring certain severance and related out-of-pocket
costs.
<PAGE>
The first of these actions should have no positive
impact at all on the Company's cash flow, and merely represents an
acknowledgment that previous acquisitions are not worth the amount
paid for them.
The second of these actions consists of reclassifying
certain of the Company's business as "Held for Sale." This action,
pending actual completion of such sales, is simply an accounting
change which has the impact of increasing reported earnings from
continuing operations by segregating losses incurred by the
businesses "Held for Sale." Even if management succeeds in selling
these businesses, the Committee believes that
these sales are far too limited in scope.
The final action, the incurrence of severance and other
costs will, according to statements made by management at an
investors' meeting in New York City on May 6, 1994, result in a $20
million cash outflow which will subsequently produce $9 million in
annual cash savings. Management has, however,
cautioned that some portion of these savings will be absorbed by
increases in R&D, and that SG&A expenses as a percentage of sales
will be increased by the need to spread fixed costs over a
smaller sales base. In the Committee's opinion, a "restructur-ing"
which contemplates further increases in R&D and SG&A ratios, far
from solving the Company's problems, further exacerbates them.
THE COMMITTEE BELIEVES MANAGEMENT CANNOT BE COUNTED ON TO TAKE
NECESSARY REMEDIAL ACTION.
In view of the matters described above, the Committee
does not have confidence that Dynatech's present management can be
relied upon to maximize the value of the Company's shares.
The members of the Committee's Slate are committed, if
elected, to take such action as they deem advisable and in the best
interest of Stockholders and which they believe will
maximize Stockholder value. Specifically, the Committee believes
that, given all of the matters discussed above, a sale of the
Company would most likely be the best means to maximize
Stockholder value. In the Committee's opinion, the Stockholders
would be best served by having a nationally recognized investment
<PAGE>
banking firm retained to value the Company and its businesses and
(i) to conduct a sale of the Company, in a fair process, at the
highest price obtainable, or (ii) to implement a major
restructuring of the Company which might include the spin-off of
TTC to shareholders. The Committee further believes that the
restructuring alternative should be pursued only if it is
determined that such a restructuring will result in higher value to
Stockholders than a sale of the entire Company.
In attempting to determine the potential value of
Dynatech in a sale, the Committee has disaggregated the Company
into three components. The first of these, TTC, is, as described
above, thought to be worth in excess of $200 million, or $21.51 per
share. The second component, businesses held for sale, are
expected, according to statements by Dynatech Management at the May
6 investors' meeting, to generate approximately $40 million, or
$4.30 per share in net proceeds. The balance of the
continuing businesses have revenues of approximately $260
million. Of the 36 companies grouped with Dynatech by Value Line,
and on the basis of information contained in the Value Line
Investment Survey dated April 29, 1994, the LOWEST multiple of
aggregate company value (defined as market value of equity plus (or
minus) net debt or (cash)) to total revenues in the most recent
fiscal year is 0.29 times. Applying this multiple to the $260
million of sales for the non-TTC Dynatech continuing
businesses, results in a value of $75.4 million, or $8.11 per
share. Subtracting from these values the Company's net debt of
$12.8 million or $1.38 per share, indicates a potential value for
Dynatech of $302.6 million, or $32.54 per share as illustrated
below:
<TABLE>
<CAPTION>
Total Company
(Millions of Dollars) Per Share
<S> <C> <C>
TCC $200.0 $21.51
Businesses to be sold 40.0 4.30
Remaining businesses 75.4 8.11
Debt, net of cash<F1> (12.8) (1.38)
Total $302.6 $32.54
<FN>
<F1> Source: Company 1994 Annual Report
</TABLE>
If elected, Messrs. Siegler, Collery and Macnguyen are
committed to attempting to persuade the Board of Directors to
accept the Committee Proposal. As directors, they would work to
provide maximum values for you -- the owners of the Company.
<PAGE>
None of the members of the Committee intend to sell
their shares of Common Stock back to the Company unless a similar
opportunity is available to all Stockholders.
THE COMMITTEE PROPOSAL
At the Annual Meeting members of the Committee will
propose that the Stockholders vote for the following resolution:
"RESOLVED, that the stockholders of the Company, assem-
bled in person or by proxy at the annual meeting of
Stockholders, request and recommend that the Board of
Directors retain a nationally recognized investment
banking firm to value the Company and its businesses
and (i) to conduct a sale of the Company in a fair
process, at the highest price obtainable, or (ii) to
implement a major restructuring of the Company which
might include the spin-off of TTC to stockholders. The
stockholders of the Company further request and
recommend that the restructuring alternative be pursued
only if it is determined that such a restructuring
would result in higher value to Stockholders than a
sale of the entire company."
While there is no assurance that the Company will
permit a vote on the Committee Proposal and while adoption of the
Proposal at the Annual Meeting would not legally bind the Board of
Directors, the Committee expects that given the fiduciary
responsibility of the directors, the directors will honor the
Stockholders request. If elected, the Committee's nominees will
strongly urge the Board to adopt actions set forth in the Committee
Proposal. The Committee urges you to consider the Committee
Proposal seriously and to vote for the Committee
Proposal which is Proposal 2 on the Blue Proxy Card.
THE BOARD'S PROPOSED
STOCK OPTION AND INCENTIVE PLAN
The Board's Proxy Statement contains a proposal for the
Approval of the Dynatech Corporation 1994 Stock Option and
Incentive Plan. The Committee recommends a vote AGAINST with
respect to this matter and will vote any proxies on this matter
AGAINST if no preference is indicated as to Item 3 of the BLUE
Proxy Card.
<PAGE>
The Committee opposes the Board's proposed 1994 Stock
Option and Incentive Plan because, in light of the Committee's view
that a sale of the Company or other extraordinary corporate action
is likely to be the most prudent course to maximize
Stockholder value, the Committee believes that this is not the
appropriate time to implement such a plan.
<PAGE>
THE COMMITTEE AND ITS SLATE
The members of the Committee are SC Fundamental Inc.,
a Delaware corporation ("SC"), The SC Fundamental Value Fund, L.P.,
a Delaware limited partnership ("Fund"), SC Fundamental Value BVI,
Inc., a Delaware corporation ("BVI Inc."), SC-BVI Partners, a
Delaware partnership ("Partners"), SC Fundamental Value BVI, Ltd.,
a British Virgin Islands corporation ("BVI Ltd."), Gary N. Siegler
("Siegler") and Peter M. Collery ("Collery").
Information concerning the Committee's members and other
participants, including their relationships to one another and
beneficial ownership of securities of the Company, is set forth
herein and on Appendix A hereto. Other than the foregoing, neither
the members of the Committee, the members of the
Committee's Slate, nor any other person listed in Appendix A has
any interest in the matters to be voted upon at the Annual
Meeting, other than their interest as Stockholders. The offices of
the members of the Committee, with the exception of BVI Ltd., are
located at 712 Fifth Avenue, 19th Floor, New York, New York 10019.
The office of BVI Ltd. is located at Kaya Flambayon 9, P.O. Box
812, Curacao, Netherlands Antilles.
The Board of Directors of the Company is divided into
three classes of directors. At each annual meeting of
Stockholders, members of one of the classes, on a rotating basis,
are elected for a three-year term. According to the Board's Proxy
Statement, the total number of directors is 9. The
Committee's Slate, if elected, would serve for the term expiring in
1997 and until the due election and qualification of their
successors. The Committee has no reason to believe any of its
nominees will be disqualified or unable or unwilling to serve if
elected. However, in the event that any of the Committee's
nominees should become unavailable for any reason, proxies may be
voted for another person nominated by the Committee to fill the
vacancy.
The Committee's nominees for membership on the
Company's Board of Directors are Gary N. Siegler, Peter M.
Collery and Curtis Macnguyen. Each of these nominees has
consented to serve as a director if elected and intends to
discharge his duties as director of the Company in compliance
The Committee's nominees for membership on the
Company's Board of Directors are Gary N. Siegler, Peter M.
Collery and Curtis Macnguyen. Each of the nominees has consented
to serve as a director if elected and intends to discharge his
duties as director of the Company in compliance with all
applicable legal requirements, including the general fiduciary
obligations imposed upon directors of a corporation. Except as
described herein, there are no arrangements or understandings
between any nominee and any other person pursuant to which he was
selected as a nominee. The information below concerning age,
principal occupation, directorships and
<PAGE>
beneficial ownership of Common Stock has been furnished by the
respective nominees.
<TABLE>
<CAPTION>
Present Principal Number of
Occupation and Shares of Percent
Principal Occupations Common of
Name, Business during Last Five (5) Stock Common
Address & Age Years;Directorships Owned Stock
<S> <C> <C> <C>
Gary N. Siegler Director and President 887,300<F1> 9.5%<F1>
712 Fifth Avenue of SC Fundamental
New York, NY Value BVI, Inc. since
10019 December 1992;
(Age 32) Chairman of the Board
of Directors of
Medical Resources Inc.
since September 1992;
Director and President
of SC Fundamental Inc.
since June 1990;
Chairman of the Board
of Directors of
National R.V.
Holdings, Inc. since
April 1989 and
Vice President and
Secretary of National
R.V. Holdings, Inc.
from April 1989 to
August 1993; Director
and President of
Siegler, Collery & Co.
since January 1989;
Directors and
President of Arena
Capital Corp. since
August 1988.
Peter M. Collery Vice President and 887,300<F2> 9.5%<F2>
712 Fifth Avenue Director of SC
New York, NY Fundamental Value BVI,
10019 Inc. since December
(Age 35) 1992; Director of
Medical Resources Inc.
since September 1992;
Director and Vice
President of
SC Fundamental Inc.
since June 1990;
Director of National R.V.
Holdings, Inc. since
April 1989 and
President and
Treasurer of National
R.V. Holdings, Inc.
from April 1989 to
August 1993; Director
and Vice President
of Siegler, Collery &
Co. since January
1989; Director and
Vice President
of Arena Capital Corp.
since January 1989;
Vice President of
Dillon, Read & Co.
from January 1987 to
January 1989.
Curtis Macnguyen Associate of Siegler, 0% 0%
712 Fifth Avenue Collery & Co. since
New York, NY January 1993;
10019 Financial Analyst of
(Age 25) Gleacher & Co. from
March 1991 to December
1993; Financial
Analyst of Morgan
Stanley & Co. from
June 1990 to March
1991.
<FN>
<F1> By virtue of his indirect control of Fund and BVI Ltd., Mr.
Siegler may be deemed to beneficially own the 887,300 shares
of Common Stock directly beneficially owned by Fund and BVI
Ltd. Nothing contained in this Proxy Statement shall be
construed as an admission of beneficial ownership of such
shares by Mr. Siegler.
<F2> By virtue of his indirect control of Fund and BVI Ltd., Mr.
Collery may be deemed to beneficially own the 887,300
shares of common stock directly beneficially owned by Fund
and BVI Ltd. Nothing contained in this Proxy Statement shall
be construed as an admission of beneficial ownership of such
shares by Mr. Collery.
</TABLE>
<PAGE>
All transactions in securities of the Company engaged
in by any member of the Committee or of the Committee's Slate
during the past two years are summarized on Appendix A. No member
of the Committee or of the Committee's Slate owns any securities of
the Company of record but not beneficially. No member of the
Committee, the Committee's Slate or, to the knowledge of the
Committee, any other persons listed on Appendix A or any associates
of the foregoing, owns beneficially any securities of the Company.
No member of the Committee or of the Committee's Slate is a party
to any contract, arrangement or understanding with any person with
respect to any securities of the Company. No member of the
Committee, the Committee's Slate, or, to the knowledge of the
Committee, any other persons listed on Appendix A or any associates
of the foregoing has any arrange-ment or understanding with respect
to any future employment by the Company or its affiliates, and no
such person has any arrangement or understanding with respect to
any future transac-tions to which the Company or any of its
affiliates will or may be a party.
Certain shares of Common Stock owned by Fund and BVI
Ltd. were purchased on margin. As of June 16, 1994, such Common
Stock, among other securities of issuers other than the Company,
was subject to margin indebtedness to Neuberger & Berman of
$27,252,000 and $8,250,000, respectively.
Except as described herein or in Appendix A, no member
of the Committee, member of the Committee's Slate, any other
persons listed on Appendix A, nor, to the knowledge of the
Committee, any of their associates (i) has engaged in or has a
direct or indirect interest in any transaction or series of
transactions since the beginning of the Company's last fiscal year,
or in any currently proposed transaction, to which the Company or
any of its subsidiaries is a party where the amount involved was in
excess of $60,000, (ii) owns beneficially any securities of the
Company, (iii) borrowed any funds for the purpose of acquiring or
holding any securities of the Company, or is presently, or has been
within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the
Company, (iv) is the beneficial or record owner of any securities
of the Company or any parent or subsidiary thereof, or (v) has,
during the past ten years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
<PAGE>
EXPENSES OF SOLICITATION
The entire expense of preparing and mailing this Proxy
Statement and any other soliciting materials and the total
expenditures relating to the solicitation of Proxies will be borne
by the Committee. The members of the Committee's Slate will be
indemnified by Fund and BVI Ltd. for losses, claims and liabilities
arising out of the Committee's activities. In
addition to the use of the mails, Proxies may be solicited by
members of the Committee and/or their employees or their
affiliates' employees by telephone, telegram and personal
solicitation. No additional compensation will be paid to those
persons engaged in such solicitation.
The Committee has entered into an arrangement with
Georgeson & Company Inc. ("Georgeson") pursuant to which
Georgeson has agreed to assist the Committee with its solic-itation
of Proxies, strategy, press and investor relations in connection
with any meetings of Stockholders through and in-cluding Dynatech's
1994 Annual Meeting. The arrangement with Georgeson provides for
the payment of fees to Georgeson in an amount not to exceed
$60,000.
Georgeson expects to engage approximately 40 persons in
connection with its efforts on behalf of the Committee. Such
persons will, among other activities, solicit proxies from
Stockholders by telephone, telegram and personal solicitation. In
addition, banks, brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward proxy
solicitation materials to the beneficial owners of the Common Stock
that such institutions hold of record, and the Committee will
reimburse such institutions for their reasonable out-of-pocket
expenses.
The Committee estimates that its total expenditures
relating to the solicitation of Proxies will be approximately
$_______, plus the fees payable to Georgeson. Total cash
expenditures to date relating to this solicitation have been ap-
proximately $___________.
The costs of the solicitation will be borne by Fund and
BVI Ltd. in proportion to the number of shares of Common Stock
owned by each of them. The members of the Committee's Slate will
not directly bear any portion of the cost of the solicitation. The
Committee presently intends to seek reimbursement from the Company
for reasonable expenses in connection with this
solicitation. If the matter is so submitted by the Company's Board
of Directors, the Committee will accept the results of such vote.
<PAGE>
VOTE REQUIRED
A majority of the shares of Common Stock represented in
person or by proxy and entitled to vote is required for approval of
matters to be presented at the Annual Meeting, except for the
election of directors, which requires a plurality of the votes cast
of Common Stock represented in person or by proxy and
entitled to vote at the Annual Meeting. Each share of Common Stock
is entitled to one vote. According to the Board's Proxy Statement,
shares of Common Stock whose holders either are
present in person at the Annual Meeting but not voting, or have
submitted proxies with respect to which authority has been
withheld, will be treated as present at the Annual Meeting only for
the presence or absence of a quorum for the transaction of business
and will be disregarded in determining the votes cast for purposes
of the election of directors. Unmarked proxies submitted by
intermediaries that are record holders of Common Stock beneficially
owned by others will be treated in a similar manner.
ADDITIONAL INFORMATION
Reference is made to the Board's Proxy Statement for
information concerning the Common Stock, beneficial ownership of
Common Stock by, and other information concerning the Company's
management, the Company's directors, the Company's independent
public accountants the principal holders of Common Stock and
procedures for submitting proposals for consideration at the 1995
Annual Meeting.
<PAGE>
APPENDIX A
The members of the Dynatech Stockholders Committee (the
"Committee") that are not members of the Committee's Slate are SC
Fundamental Inc., a Delaware corporation ("SC"), The SC
Fundamental Value Fund, L.P., a Delaware limited partnership
("Fund"), SC Fundamental Value BVI, Inc., a Delaware corporation
("BVI Inc."), SC-BVI Partners, a Delaware partnership and SC
Fundamental Value BVI, Ltd., a British Virgin Islands corporation
("BVI Ltd.").
Set forth below is the name and principal business of
each member of the Committee which is not a member of the
Committee's Slate.
<TABLE>
<CAPTION>
NAME PRINCIPAL BUSINESS
<S> <C>
SC Fundamental Inc. Primarily engaged in acting as
general partner of Fund.
The SC Fundamental Primarily engaged in investing in
Value Fund, L.P. securities.
SC Fundamental Primarily engaged in acting as managing
Value BVI, Inc. general partner of Partners,
the investment manager of
BVI Ltd.
SC-BVI Partners Primarily engaged in acting as the
investment manager of BVI Ltd.
SC Fundamental Primarily engaged in investing in
Value BVI, Ltd. securities.
</TABLE>
The business address of each member of the Committee
which is not a member of the Committee's Slate, with the exception
of BVI Ltd., is 712 Fifth Avenue, 19th Floor, New York, New York
10019. The business address of BVI Ltd. is Kaya Flambayon 9, P.O.
Box 812,
Curacao, Netherlands Antilles.
<TABLE>
TRANSACTIONS IN COMMON STOCK
DURING PAST TWO YEARS
<CAPTION>
THE SC FUNDAMENTAL VALUE FUND, L.P.
Date Purchases (Number of Shares)
<S> <C>
October 27, 1993 42,750
November 2, 1993 35,200
November 9, 1993 49,500
November 9, 1993 7,000
November 10, 1993 5,200
November 10, 1993 7,000
November 11, 1993 7,000
November 11, 1993 1,350
November 17, 1993 8,750
November 18, 1993 4,800
November 19, 1993 2,800
November 30, 1993 104,450
November 30, 1993 3,100
December 1, 1993 35,000
December 15, 1993 1,750
December 27, 1993 5,300
December 27, 1993 2,400
December 29, 1993 1,400
December 30, 1993 1,400
January 4, 1994 2,900
May 16, 1994 51,700
May 18, 1994 22,800
May 20, 1994 13,800
May 27, 1994 199,600
May 3, 1994 20,200
June 1, 1994 13,000
June 1, 1994 1,700
June 2, 1994 17,200
June 2, 1994 5,200
June 2, 1994 13,800
June 3, 1994 37,400
Febuary 2, 1994 3,500
March 7, 1994 35,200
March 9, 1994 2,300
March 17, 1994 15,900
April 13, 1994 3,500
April 14, 1994 2,900
April 14, 1994 17,600
April 14, 1994 3,900
April 15, 1994 10,300
April 19, 1994 4,250
April 20, 1994 4,500
April 21, 1994 5,500
May 1, 1994 5,000
<CAPTION>
SC FUNDAMENTAL VALUE BVI, LTD.
Date Purchases (Number of Shares)
<S> <C>
October 27, 1993 17,250
November 2, 1993 14,800
November 9, 1993 20,700
November 9, 1993 3,000
November 10, 1993 2,300
November 10, 1993 3,000
November 11, 1993 3,000
November 11, 1993 550
November 17, 1993 3,650
November 18, 1993 2,000
November 19, 1993 1,200
November 30, 1993 43,550
November 30, 1993 1,300
December 1, 1993 15,000
December 15, 1993 750
December 27, 1993 2,300
December 27, 1993 1,100
December 29, 1993 600
December 30, 1993 600
January 4, 1994 1,300
January 31, 1994 100
May 1, 1994 5,000
May 16, 1994 23,300
May 18, 1994 10,200
May 20, 1994 6,200
May 27, 1994 90,100
May 31, 1994 9,100
June 1, 1994 5,900
June 1, 1994 800
June 2, 1994 7,800
June 2, 1994 2,400
June 2, 1994 6,200
June 3, 1994 16,900
February 2, 1994 1,500
March 7, 1994 14,800
March 9, 1994 1,100
March 17, 1994 6,600
April 13, 1994 1,500
April 14, 1994 1,100
April 14, 1994 7,400
April 14, 1994 1,600
April 15, 1994 4,300
April 19, 1994 1,750
April 20, 1994 1,800
April 21, 1994 2,300
</TABLE>
<PAGE>
Fund directly beneficially owns 611,100 shares of Common
Stock. SC, being the general partner of Fund, may be deemed to
beneficially own the Common Stock which Fund owns. BVI Ltd.
directly beneficially owns 276,200 shares of Common Stock.
Partners, being the investment manager of BVI Ltd., and BVI Inc.,
being the managing general partner of Partners, may be deemed to
indirectly beneficially own the Common Stock that BVI Ltd. directly
beneficially owns. Siegler and Collery, by virtue of their status
as controlling stockholders of SC and BVI Inc., may be deemed to
beneficially own the Common Stock which SC and BVI Inc. may be
deemed to beneficially own. Nothing contained in this Proxy
Statement or in this
Appendix A shall be constituted as an admission of beneficial
ownership by any such person.
There are no material proceedings in which any member of
the Committee's Slate is a party adverse to the Company or any of
its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries.
Set forth below is information relating to employees of
Siegler Collery, an affiliate of members of the Committee, who may
solicit proxies by telephone, telegram or personal solicita-tion,
for which no additional compensation will be paid. The business
address of all such persons is 712 Fifth Avenue, 19th Floor, New
York, New York 10019.
Name Principal Occupation or Employment
Neil Koffler Financial Analyst, Siegler, Collery & Co.
David Einhorn Financial Analyst, Siegler, Collery & Co.
Jeffrey Keswin Financial Analyst, Siegler, Collery & Co.
PROXY
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1, FOR PROPOSAL 2, AGAINST PROPOSAL 3 AND WILL BE VOTED IN
THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S)
THEREOF.
1. Election of Directors for a term
expiring in 1997 (as set forth in
the Board's Proxy Statement)
FOR WITHHOLD
FROM ALL NOMINEES
__ __
|__| |__|
COMMITTEE Nominees are:
RECOMMENDS VOTE Gary N. Siegler, Peter M. Collery
FOR PROPOSAL 1, and Curtis Macnguyen
FOR PROPOSAL 2,
AND AGAINST [AUTHORITY TO VOTE FOR ANY
PROPOSAL 3 NOMINEE(S) MAY BE WITHHELD FROM ANY
NOMINEE(S) BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF
SUCH NOMINEE(S).]
2. To retain an investment banking
firm to conduct a sale or to
implement a major restructuring (as
set forth in the Committee's Proxy
Statement).
FOR AGAINST ABSTAIN
__ __ __
|__| |__| |__|
3. To approve the 1994 Stock Option
and Incentive Plan (as set forth
in the Board's Proxy Statement).
FOR AGAINST ABSTAIN
__ __ __
|__| |__| |__|
(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE)
<PAGE>
PRELIMINARY COPY
For Information of the Securities Exchange Commission Only
PROXY SOLICITED BY
DYNATECH STOCKHOLDERS COMMITTEE
IN OPPOSITION TO THE BOARD OF DIRECTORS
The undersigned hereby appoints GARY N. SIEGLER, PETER M. COLLERY
and NEIL KOFFLER, and each of them, as proxies, with full power of
substitution, to vote as set forth below and in their discre-tion
upon such other matters as may properly come before the meeting,
for and on behalf of the undersigned all the shares of common stock
of DYNATECH CORPORATION held of record by the
undersigned, at the close of business on June 13, 1994, at the
Annual Meeting of Stockholders to be held in the Goodwin, Proctor
& Hoar Conference Center, 2nd Floor, Exchange Place, Boston,
Massachusetts, on Tuesday, July 26, 1994 at 10:00 a.m. and at any
adjournments or postponements thereof, hereby granting full power
and authority to act on behalf of the undersigned at said meeting
or any adjournments or postponements thereof.
Please sign exactly as name appears, indicating title or
representative capacity, where applicable.
PLEASE SIGN, DATE AND RETURN
Signature:_____________________________________
_____________________________________
Title or Authority:____________________________
Date:__________________________________________
PLEASE SIGN, DATE AND MAIL
YOUR BLUE PROXY
IN YOUR BLUE ENVELOPE TODAY
