SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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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)
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<PAGE>
DYNATECH STOCKHOLDERS COMMITTEE
19th Floor
712 Fifth Avenue
New York, NY 10022
July 11, 1994
Dear Fellow Dynatech Stockholder:
You may have recently received a letter from
Dynatech Corporation regarding our nomination of three
candidates as directors of the Company. In deciding how you
wish to vote on this important matter, we would like to ask
that you consider several factors:
1. THE COMPANY'S ATTACKS ON OUR COMMITTEE AND ITS NOMINEES
SHOULD NOT DISTRACT YOUR ATTENTION FROM THE COMPANY'S
ABYSMAL PERFORMANCE IN RECENT YEARS. Two of the
Committee's nominees, Messrs. Siegler and Collery,
founded the SC Fundamental Value Fund, an investment
partnership, in June of 1990. Since that time, the
fund has made hundreds of investments and has never
before conducted a proxy fight. The fund, along with
an affiliate, SC Fundamental Value BVI, Ltd. (together
"the Funds") originally began purchasing Dynatech
shares at $22.625 in October of 1993 in the belief that
the Company had attractive businesses and a stronger
cash flow than was indicated by its reported earnings.
Shortly before this initial investment, Dynatech
reported quarterly earnings which were well below both
analysts' expectations and the results in the same
quarter a year earlier. The same thing happened in
January of 1994, and again in May of 1994 when Dynatech
announced a $38 million quarterly loss; its first
quarterly loss in 23 years. It was only after this
sorry performance that the Funds began to consider
actions designed to preserve the value of their
investment. Ultimately, they determined to commence
the proxy contest.
With respect to the Funds, their net assets currently
approximate $270 million. An investment of $100,000 in
the SC Fundamental Value Fund at its inception on June
1, 1990 would have grown to more than $284,000 at June
30, 1994 which represents a compounded annual rate of
return in excess of 30%, and which greatly exceeds the
return which would have been realized on an investment
in Dynatech shares over the same period. (Rate of
return calculations are pre-tax and assume that
investors neither added to, or reduced, their
investments during the period in question.)
2. IS YOUR COMPANY INTERESTED IN YOUR OPINION? Our
Committee will propose a non-binding resolution for
consideration by all stockholders which asks Dynatech's
Board to hire an investment banker to value Dynatech
and subsequently sell or restructure the Company. In
recently prepared proxy materials, Dynatech has implied
that under Massachusetts law it may be able to deny you
the right to vote on this resolution. Even if this is
true, which we doubt, we wonder, why would the Company
want to use a technicality to deny its owners the right
to express their opinion on this crucial question?
3. WHY SHOULD YOU VOTE TO RE-ELECT INCUMBENTS TO A BOARD
COMPOSED OF DIRECTORS WHO EITHER OWN VERY LITTLE
COMPANY STOCK, OR ARE SELLING WHAT THEY DO OWN? The
only two directors of Dynatech to own more than 0.2% of
the Company's outstanding shares are Messrs. Warren
Rohsenow and J.P. Barger, its co-founders and longest-
serving directors. Over the last two years, Mr.
Rohsenow has sold 48,600 shares of Dynatech stock,
while Mr. Barger has sold more than 125,000 shares
including 10,000 shares sold as recently as June 14-15
of this year. Neither director bought a single share
during the entire period. On May 2, Mr. Barger filed a
Form 144 with the Securities and Exchange Commission in
which he proposed to sell 100,000 shares of Dynatech
stock. Only 45,000 of these shares are included in Mr.
Barger's sales described above. Total purchases by all
nine members of the Company's Board over the last two
years amount to only 3,690 shares. Messrs. Rohsenow
and Barger are the only two Dynatech directors with
substantial stock holdings and have been associated
with the Company since its inception. Does it make
sense to maintain the Board's status quo even as these
directors reduce their financial commitment to
Dynatech?
4. MEMBERS OF THE COMMITTEE IN AGGREGATE OWN A TOTAL OF
887,300 DYNATECH SHARES. THEIR INTERESTS AS
STOCKHOLDERS ARE THE SAME AS YOURS. The Committee's
nominees for director are employees of, managers of,
and/or investors in the Funds. The Funds collectively
own 887,300 shares or 9.5% of Dynatech. The nominees
are committed to achieving the highest possible value
for Dynatech's shares in the near term. We request
that you vote to give them the chance.
YOUR VOTE IS IMPORTANT REGARDLESS OF HOW MANY
SHARES YOU OWN. Please sign, date and return the BLUE proxy
card which you should have received in the mail, even if you
previously signed the white card provided by the Company.
Only your most recently dated card counts. If you have not
received a BLUE card, or if you have any questions about the
Committee and its nominees, please feel free to contact
Georgeson & Co. toll-free at (800) 223-2064. Banks and
brokers call (212) 440-9800 (collect).
Sincerely,
The Dynatech Stockholders Committee
