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Securities and Exchange Commission
Washington, DC 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934)
LARCAN-TTC INC.
-------------------------------------
(Name of the Issuer)
LARCAN-TTC INC. and LARCAN INC.
-------------------------------------
(Name of Person(s) Filing Statement)
Common Stock
-------------------------------------
(Title of Class of Securities)
879558 10 4
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(CUSIP Number of Class of Securities)
Ronald M. Eve, Secretary of Larcan-TTC Inc.
650 South Taylor Avenue, Louisville, Colorado 80027
(303) 665-8000
Thomas F. Byrne, Secretary of Larcan Inc.
8 King Street East, Suite 1600
Toronto, Ontario, CANADA M5C 1B5
(416) 364-1616
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the
appropriate box):
a. [x] The filing of solicitation materials or an
information statement subject to Regulation 14A, Regulation 14C,
or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under
the Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or
information statement referred to in checking box (a) are
preliminary copies. [X]
Calculation of Filing Fee
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Transaction Valuation* Amount of Filing Fee
$155,671.19 $31.13
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[ ] 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: __________ Filing party: _______________
Form or registration no.: ________ Date filed: _________________
* For purposes of calculation of fee only, this amount is based on (i)
2,490,739 (the number of shares of Common Stock of LARCAN-TTC Inc.
outstanding as of October 27, 1997 ("Common Stock") and not held by
Larcan multiplied by $0.0625, the cash consideration per share, which
product has been multiplied by 1/50th of one percent.
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<PAGE>
LARCAN-TTC Inc., a Delaware corporation (the "Company") and LARCAN
INC., a Canadian corporation ("Larcan") hereby submit this Rule 13e-3
Transaction Statement on Schedule 13E-3 (the "Statement"). The
Statement relates to a proposed Agreement and Plan of Merger dated as
of July 17, 1997 (the "Merger Agreement") among Larcan, Larcan Sub
Inc., a Delaware corporation and wholly-owned subsidiary of Larcan
("LSI"), and the Company pursuant to which LSI will be merged with and
into the Company (the "Merger"). Pursuant to the Merger, each share (a
"Share") of Common Stock, par value $0.04 per Share, of the Company
issued and outstanding immediately prior to the effective time of the
Merger (other than (i) Shares held by the Company as treasury stock or
owned by Larcan, which Shares shall be cancelled, and (ii) Shares as
to which appraisal rights have been exercised) will be, subject to
certain limitations, converted at the election of the holder thereof,
subject to the terms described in the proxy statement of the Company
(the "Proxy Statement"), into the right to receive $0.0625 in cash.
This Statement is intended to satisfy the reporting requirements
of Section 13(e) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Proxy Statement is being filed by the
Company with the Securities and Exchange Commission (the "Commission")
contemporaneously with the filing of this Statement.
The cross reference sheet below is being supplied pursuant to
General Instruction F to Schedule 13E-3 and shows the location in the
Proxy Statement of the information required to be included in response
to the items of this Statement. The information in the Proxy
Statement, including all exhibits thereto, is hereby expressly
incorporated herein by reference and the responses to each item in
this Statement are qualified in their entirety by the information
contained in the Proxy Statement.
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<PAGE>
CROSS REFERENCE SHEET
ITEM IN SCHEDULE 13E-3 WHERE LOCATED IN THE PROXY STATEMENT
Item 1(a) Cover Page
Item 1(b) SUMMARY--The Merger; THE SPECIAL
MEETING--Date; --Vote Required
Item 1(c)-(d) MARKET PRICES FOR THE COMMON STOCK
Item 1(e) *
Item 1(f) SPECIAL FACTORS--History and Background
Item 2(a)-(g) *
Item 3(a)(1) SPECIAL FACTORS--History and Background
Item 3(a)(2) *
Item 3(b) *
Item 4(a) Cover Page; SUMMARY--The Merger;
GENERAL--Proposal to be Considered at
the Special Meeting; THE MERGER
AGREEMENT
Item 4(b) *
Item 5(a)-(g) SUMMARY--Conduct of Business After the
Merger; SPECIAL FACTORS--History and
Background; --Conduct of Business of
the Company After the Merger
Item 6(a) SUMMARY--Financing the Merger; SPECIAL
FACTORS--Financing of Merger
Consideration; THE MERGER
AGREEMENT--Merger Consideration
Item 6(b) SPECIAL FACTORS--Financing of Merger
Consideration
--------------------
* The Item is inapplicable or the answer thereto is in the
negative.
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<PAGE>
Item 6(c) *
Item 6(d) *
Item 7(a)-(c) SUMMARY--The Merger; --Purpose and
Reason for the Merger; --Federal Tax
Consequences; SPECIAL FACTORS--History
and Background; --Purpose and Effects
of and Alternatives to the Merger
Item 7(d) SUMMARY--The Special Meeting; --The
Merger; --Effective Time of Merger;
GENERAL--Proposal to be Considered at
the Special Meeting; SPECIAL FACTORS--
Certain Federal Income Tax
Consequences; THE MERGER AGREEMENT
Item 8(a)-(b) SUMMARY--Fairness of the Merger;
SPECIAL FACTORS--History and
Background; --Recommendations of the
Company's Board of Directors; Fairness
of the Merger; --Purpose and Effects of
and Alternatives to the Merger
Item 8(c) SUMMARY--Vote Required; GENERAL--Record
Date; Voting Rights; GENERAL--
Recommendations of the Company's Board
of Directors; Fairness of Merger; THE
MERGER AGREEMENT--Voting Requirements
Item 8(d) *
Item 8(e) SPECIAL FACTORS--Recommendations of the
Company's Board of Directors; Fairness
of the Merger
Item 8(f) *
Item 9(a)-(c) SPECIAL FACTORS--Recommendations of the
Company's Board of Directors; Fairness
of the Merger
Item 10(a) SUMMARY--Vote Required; GENERAL--Record
Date; Voting Rights; THE MERGER
AGREEMENT--Voting Requirements; MARKET
PRICES FOR THE COMMON STOCK--Principal
--------------------
* The Item is inapplicable or the answer thereto is in the
negative.
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<PAGE>
Holders of Securities; --Security
Ownership of Management
Item 10(b) *
Item 11 SUMMARY--The Merger; --Vote Required;
THE MERGER AGREEMENT; Annex A
Item 12(a)-(b) SUMMARY--Vote Required; GENERAL--Record
Date; Voting Rights; THE MERGER
AGREEMENT--Voting Requirements
Item 13(a) Cover Page; SUMMARY--The Merger; --
Appraisal Rights; GENERAL--Voting and
Revocation of Proxies; APPRAISAL
RIGHTS; Annex B
Item 13(b) *
Item 13(c) *
Item 14(a) BUSINESS INFORMATION REGARDING LTTC AND
LARCAN--LTTC**
Item 14(b) *
Item 15(a)-(b) *
Item 16 *
Item 17 Materials to be filed as exhibits
(a) *
(b) *
(c) --See Annex A to the Proxy Statement
(d) Preliminary Proxy Statement dated
___________, together with Form of Proxy
and Letter to Shareholders
--------------------
* The Item is inapplicable or the answer thereto is in the
negative.
** The financial information required by this item is included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1997.
Such Annual Report accompanies the Proxy Statement and is incorporated
herein by reference.
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<PAGE>
(e) --See Annex B to the Proxy Statement
(f) *
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<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITIES SUBJECT TO THE
TRANSACTION
(a) The information set forth on the cover page of the Proxy
Statement is incorporated herein by reference.
(b) The information set forth under "SUMMARY--The Merger"; "THE
SPECIAL MEETING--Date"; and "--Vote Required" is incorporated herein
by reference.
(c)-(d) The information set forth under "MARKET PRICES FOR THE
COMMON STOCK" is incorporated herein by reference.
(e) Not Applicable.
(f) The information set forth under "SPECIAL FACTORS--History
and Background" is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Schedule 13E-3 is being filed by LARCAN-TTC Inc., the
issuer of the class of equity securities which is the subject of this
Rule 13e-3 transaction and LARCAN INC.
(b)-(c) See Appendix A.
(d)-(g) Not applicable.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(a)(1) The information set forth under "Special Factors--History
and Background" is incorporated herein by reference.
(a)(2) Not Applicable.
(b) Not Applicable.
PAGE 4. TERMS OF THE TRANSACTIONS
(a) The information set forth on the cover page and under
"SUMMARY--The Merger"; "GENERAL--Proposal to be Considered at the
Special Meeting"; and "THE MERGER AGREEMENT" is incorporated herein by
reference.
(b) Not Applicable.
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<PAGE>
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OF AFFILIATE
(a)-(g) The information set forth under "SUMMARY--Conduct of
Business After the Merger"; "SPECIAL FACTORS--History and Background";
and "--Conduct of Business of the Company After the Merger" is
incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth under "SUMMARY--Financing the
Merger"; "SPECIAL FACTORS--Financing of Merger Consideration"; and
"THE MERGER AGREEMENT--Merger Consideration" is incorporated herein by
reference.
(b) The information set forth under "SPECIAL FACTORS--Financing
of Merger Consideration" is incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS
(a)-(c) The information set forth under "SUMMARY--The Merger";
"--Purpose and Reason for the Merger"; "--Federal Tax Consequences";
"SPECIAL FACTORS--History and Background"; and "--Purpose and Effects
of and Alternatives to the Merger" is incorporated herein by
reference.
(d) The information set forth under "SUMMARY--The Special
Meeting"; "--The Merger"; "--Effective Time of Merger";
"GENERAL--Proposal to be Considered at the Special Meeting"; "SPECIAL
FACTORS--Certain Federal Income Tax Consequences"; and "THE MERGER
AGREEMENT" is incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTIONS
(a)-(b) The information set forth under "SUMMARY--Fairness of
the Merger"; "SPECIAL FACTORS--History and Background";
"--Recommendations of the Company's Board of Directors; Fairness of
the Merger"; and "--Purpose and Effects of and Alternatives to the
Merger is incorporated herein by reference.
(c) The information set forth under "SUMMARY--Vote Required";
"GENERAL--Record Date"; "Voting Rights"; "GENERAL--Recommendations of
the Company's Board of Directors"; "Fairness of Merger"; and "THE
MERGER AGREEMENT--Voting Requirements" is incorporated herein by
reference.
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<PAGE>
(d) No representative was hired solely on behalf of
unaffiliated security holders.
(e) The information set forth under "SPECIAL FACTORS--
Recommendations of the Company's Board of Directors"; and "Fairness
of the Merger" is incorporated herein by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a)-(c) The information set forth under "SPECIAL FACTORS--
Recommendations of the Company's Board of Directors; Fairness of the
Merger" is incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER
(a) The information set forth under "SUMMARY--Vote Required";
"GENERAL--Record Date; Voting Rights"; "THE MERGER AGREEMENT--Voting
Requirements"; "MARKET PRICES FOR THE COMMON STOCK--Principal Holders
of Securities"; and "--Security Ownership of Management" is
incorporated herein by reference.
(b) No transactions of the type required to be disclosed by Item
10(b) have been effected in the past 60 days.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERTAKINGS WITH RESPECT
TO THE ISSUER'S SECURITIES
The information set forth under "SUMMARY--The Merger"; "--Vote
Required"; "THE MERGER AGREEMENT"; and "Annex A" is incorporated
herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN
PERSONS WITH REGARD TO THE TRANSACTION
(a)-(b) The information set forth under "SUMMARY--Vote
Required"; "GENERAL--Record Date; Voting Rights"; and "THE MERGER
AGREEMENT--Voting Requirements" is incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION
(a) The information set forth on the cover page and under
"SUMMARY--The Merger"; "--Appraisal Rights"; "GENERAL--Voting and
Revocation of Proxies"; "APPRAISAL RIGHTS"; and "Annex B" is
incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
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<PAGE>
ITEM 14. FINANCIAL INFORMATION
(a) The information set forth under "BUSINESS INFORMATION
REGARDING LTTC AND LARCAN" in the Proxy Statement and the information
set forth under Item 7 in the Company's Annual Report on Form 10-KSB
for the year ended June 30, 1997 is incorporated herein by reference.
(b) Not Applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED
(a) Not Applicable.
(b) Not Applicable.
ITEM 16. ADDITIONAL INFORMATION
Reference is hereby made to the Proxy Statement and to each
exhibit attached thereto, each of which is incorporated by reference
herein.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS
(a) Not Applicable.
(b) Not Applicable.
(c)(1) Agreement and Plan of Merger dated as of July 17, 1997 by
and among Larcan Inc., Larcan Sub, Inc., and Larcan-TTC Inc.
(incorporated by reference to Annex A to the Proxy Statement).
(c)(2) Not Applicable.
(d) Proxy Statement and related Notice of Special Meeting
and Proxy (incorporated by reference to the Proxy Statement filed
by LARCAN-TTC Inc. on the date hereof).
(e) Not Applicable.
(f) Not applicable.
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<PAGE>
After due inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: October 14, 1997
LARCAN-TTC INC.
By: /s/ Jim Wilson
---------------------------
Name: G. James Wilson
Title: President
LARCAN INC.
By: /s/ James D. Adamson
---------------------------
Name: James D. Adamson
Title: President
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<PAGE>
APPENDIX A
The name, office, address and present principal occupation or employment of
each executive officer and director of Larcan is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
P. Clyde Turner Chairman of the Board 228 Ambassador Drive
of Larcan Mississauga, Ontario
CANADA L5T 2J2
James D. Adamson Director and President 228 Ambassador Drive
of Larcan Mississauga, Ontario
CANADA L5T 2J2
Paul A. Dickie Director and Senior Vice 514 Chartwell Road
President of Larcan P.O. Box 880
President of LRE Oakville, Ontario
CANADA L6J 5C5
John E. Tremblay Vice President, Engineering 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Ronald E. Comforth Vice President, Manufacturing 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Stan Maruno Vice President, Sales and 228 Ambassador Drive
Marketing Mississauga, Ontario
CANADA L5T 2J2
Michael P. Gagnon Vice President, Customer 228 Ambassador Drive
Services and Treasurer Mississauga, Ontario
CANADA L5T 2J2
Nancy E. McGee Director and Assistant 514 Chartwell Road
Treasurer of Larcan P.O. Box 880
Senior Vice President, Oakville, Ontario
Chief Financial Officer CANADA L6J 5C5
and Treasurer of LRE
Thomas F. Byrne Director of Larcan 8 King Street East
Secretary of both Larcan Suite 1600
and LRE Toronto, Ontario
Partner in the law firm CANADA M5C 1B5
of Byrne, Crosby
<PAGE>
Constance L. Crosby Assistant Secretary of Larcan 8 King Street East
Partner in the law firm of Suite 1600
Byrne, Crosby Toronto, Ontario
CANADA M5C 1B5
George E. Patton Director of Larcan 514 Chartwell Road
Chairman of the Board and P.O. Box 80
Chief Executive Officer Oakville, Ontario
of LRE CANADA L6J 5C5
The name, address and present principal occupation or employment of each
executive officer and director of LARCAN-TTC is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
Paul A. Dickie Chairman of the Board 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
Nancy E. McGee Director 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
G. James Wilson Director and President 650 South Taylor Avenue
of LARCAN-TTC Louisville, CO 80027
James D. Adamson Director and Vice President 228 Ambassador Drive
of LARCAN-TTC Mississauga, Ontario
CANADA L5T 2J2
Byron W. St. Clair Director 650 South Taylor Avenue
Louisville, CO 80027
Dirk B. Freeman Director and Assistant 650 South Taylor Avenue
Secretary Louisville, CO 80027
David Hale Vice President, Operations 650 South Taylor Avenue
Louisville, CO 80027
Ronald M. Eve Secretary and Controller 650 South Taylor Avenue
Louisville, CO 80027
Michael P. Gagnon Treasurer 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
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Exhibit (d)
LARCAN-TTC INC.
650 South Taylor Avenue
Louisville, Colorado 80027
Dear Stockholder:
You are cordially invited to attend a Special Meeting of the
stockholders of Larcan-TTC Inc. (the "Company") to be held at the
Company's offices located at 650 South Taylor Avenue, Louisville,
Colorado 80027 on Tuesday, November 25, 1997, at 10:00 a.m., local
time.
At the meeting you will be asked to consider and vote on an
Agreement and Plan of Merger by and among the Company, Larcan Inc.
("Larcan"), and Larcan Sub, Inc., a wholly-owned subsidiary of
Larcan. The Agreement and Plan of Merger generally provides for a
taxable exchange in which you will receive $0.0625 for each share of
the common stock of the Company held by you.
The Notice of Special Meeting of Stockholders and the Proxy
Statement accompanying this letter more fully describe the matters to
be considered at the Special Meeting. We urge you to read the
enclosed materials carefully.
YOUR BOARD OF DIRECTORS HAS APPROVED THE AGREEMENT AND PLAN OF
MERGER AND RECOMMENDS A VOTE "FOR" THE AGREEMENT AND PLAN OF MERGER.
Approval of the Agreement and Plan of Merger requires the
affirmative vote of the holders of a majority of the outstanding
shares of the Company's common stock entitled to vote thereon.
Whether or not you plan to attend the Special Meeting, we urge
you to sign, date and return the enclosed proxy card in the envelope
provided so that as many shares as possible may be represented at the
meeting. The vote of each stockholder is important and your
cooperation in returning your executed proxy card will be
appreciated. Should you desire to attend the meeting and vote in
person, you may do so even though you have previously returned your
proxy card.
Thank you.
Sincerely,
Paul A. Dickie
Chairman of the Board
<PAGE>
LARCAN-TTC INC.
650 South Taylor Avenue
Louisville, Colorado 80027
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On November 25, 1997
Notice is hereby given that a special meeting of the
stockholders of Larcan-TTC Inc. ("Company" or "LTTC") will be held on
Tuesday, November 25, 1997, at 10:00 a.m., local time, at the
Company's offices, located at 650 South Taylor Avenue, Louisville,
Colorado 80027, for the following purposes:
(1) To consider and vote upon the approval of an Agreement and
Plan of Merger ("Agreement") among the Company, Larcan
Inc., a Canadian corporation ("Larcan"), and Larcan Sub,
Inc., a Delaware corporation and wholly-owned subsidiary of
Larcan ("LSI"), pursuant to which (i) LSI will be merged
with and into the Company ("Merger"); (ii) each outstanding
share of common stock of LSI will be converted into the
right to receive one share of common stock of the Company,
par value $.04 per share ("Common Stock"), (iii) each
outstanding share of Common Stock of the Company (other
than those owned by Larcan and those for which appraisal
rights have been perfected in accordance with the General
Corporation Law of the State of Delaware) shall be
cancelled in exchange for $0.0625 (the "Merger
Consideration"), (iv) each outstanding share of Common
Stock of the Company that is owned by Larcan shall be
cancelled without any consideration therefor, and (v) the
Company's Certificate of Incorporation and By-Laws will be
the Certificate of Incorporation and By-Laws of the
surviving corporation; and
(2) To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
<PAGE>
Only stockholders of record at the close of business on October
27, 1997 are entitled to notice of and to vote at the meeting or any
adjournment or adjournments thereof.
By Order of the Board of Directors
CORPORATE SECRETARY
Louisville, Colorado
__________ ___, 1997
IT IS DESIRABLE THAT AS MANY STOCKHOLDERS AS POSSIBLE BE
REPRESENTED AT THE MEETING AND, THEREFORE, WHETHER OR NOT YOU ARE
ABLE TO BE PRESENT IN PERSON OR OTHERWISE REPRESENTED AT THE MEETING,
YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY, SO THAT YOUR
SHARES WILL BE REPRESENTED.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE APPROVAL OF THE MERGER AGREEMENT.
PLEASE DO NOT SEND IN ANY STOCK CERTIFICATES AT THIS TIME.
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<PAGE>
LARCAN-TTC INC.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Larcan-TTC Inc., a Delaware
corporation ("LTTC" or the "Company"), of proxies for use at a
special meeting of stockholders to be held at 10:00 a.m., local time,
on Tuesday, November 25, 1997, at 650 South Taylor Avenue,
Louisville, Colorado 80027, and at any postponements or adjournments
thereof (the "Special Meeting"), for the purpose described below.
This Proxy Statement is first being mailed to stockholders of the
Company on or about October 30, 1997.
At the Special Meeting, the stockholders of LTTC will be asked
to consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Merger, dated July 17, 1997 (the "Merger
Agreement"), by and among the Company, Larcan Inc., a Canadian
corporation ("Larcan"), and Larcan Sub, Inc., a recently-formed
Delaware corporation and a wholly-owned subsidiary of Larcan ("LSI").
The Merger Agreement provides for the merger (the "Merger") of
LSI with and into the Company with the Company being the surviving
corporation (the "Surviving Corporation"). At the effective time of
the Merger, each share of the common stock, $.04 par value per share
("Common Stock") of the Company outstanding immediately prior thereto
(other than those owned by Larcan and those for which appraisal
rights have been perfected in accordance with the General Corporation
Law of the State of Delaware ("DGCL")) will be converted into the
right to receive $0.0625 in cash, without interest, which equals the
average of the closing bid and ask prices for the Common Stock in its
principal trading market for the 30 trading days immediately prior to
the Merger. For a more complete description of the Merger Agreement
and the Merger, see "THE MERGER AGREEMENT."
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF SUCH TRANSACTION FOR THE ACCURACY OR
ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY..................................................1
The Special Meeting.................................1
The Merger..........................................1
Vote Required.......................................2
The Effective Time of the Merger....................2
Purpose and Reason for the Merger...................3
Fairness of the Merger..............................3
Federal Tax Consequences............................3
Financing the Merger................................3
Conduct of Business After the Merger................3
Appraisal Rights....................................4
SPECIAL MEETING..........................................5
Proposal to be Considered at the Special Meeting....5
Record Date; Voting Rights..........................5
Voting and Revocation of Proxies....................6
Solicitation of Proxies.............................7
THE MERGER...............................................7
History and Background..............................7
Recommendations of the Company's Board
of Directors; Fairness of the Merger.............10
Recommendations of Larcan as to the Fairness
of the Merger....................................12
Purpose and Effects of and Alternatives to
the Merger.......................................14
Conduct of Business of the Company After
the Merger.......................................15
Certain Federal Income Tax Consequences............15
Accounting Treatment ..............................16
Financing of Merger Consideration..................16
THE MERGER AGREEMENT....................................17
General............................................17
Effective Time of the Merger.......................17
Merger Consideration...............................17
Conditions to Closing..............................18
Termination or Amendment of Merger Agreement.......18
Voting Requirements................................18
APPRAISAL RIGHTS........................................20
BUSINESS INFORMATION REGARDING LTTC AND LARCAN .........24
Larcan and LSI.....................................24
MARKET PRICES FOR THE COMMON STOCK......................25
Principal Holders of Securities....................25
Security Ownership of Management...................26
INDEPENDENT ACCOUNTANTS.................................27
MISCELLANEOUS...........................................27
AVAILABLE INFORMATION...................................28
<PAGE>
ANNEX A: Agreement and Plan of Merger.................A-1
ANNEX B: Directors and Executive Officers
of LTTC, Larcan, LSI and
the Surviving Corporation....................B-1
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<PAGE>
SUMMARY
The following is a summary of certain information contained in
this Proxy Statement. This summary is not intended to be a complete
statement of all material features of the Merger and is qualified in
its entirety by reference to the more detailed information appearing
elsewhere in this Proxy Statement and the Annexes hereto. Terms used
but not defined in this Summary have the meanings ascribed to them
elsewhere in this Proxy Statement. Stockholders are urged to read
this Proxy Statement and the Annexes hereto in their entirety.
The Special Meeting
A special meeting of the stockholders of Larcan-TTC Inc. (the
"Company" or "LTTC") will be held at 10:00 a.m., local time, on
Tuesday, November 25, 1997 at the Company's offices located at 650
South Taylor Avenue, Louisville, Colorado 80027. At the Special
Meeting, the stockholders of the Company will be asked to consider
and vote upon a proposal to approve and adopt an Agreement and Plan
of Merger, dated July 17, 1997, by and among the Company, Larcan Inc.
("Larcan") and Larcan Sub, Inc., a wholly-owned subsidiary of Larcan
("LSI"). A copy of the Merger Agreement is attached to this Proxy
Statement as Annex A.
The Company is a Delaware corporation with its principal
executive offices located at 650 South Taylor Avenue, Louisville,
Colorado 80027, telephone: (303) 665-8000. Larcan is a corporation
organized under the laws of Canada, the principal executive offices
of which are located at 228 Ambassador Drive, Mississauga, Ontario,
Canada L5T 2J2, telephone: (905) 564-9222.
The Merger
The Merger Agreement provides that, upon approval of the Merger
Agreement by the stockholders of the Company and satisfaction of
certain other conditions, the Company will be merged with LSI, and
will be the surviving corporation ("Surviving Corporation" shall
hereinafter mean LTTC from and after the effective time of the
Merger.) As a result of the Merger, each outstanding share of the
Company's common stock, $.04 par value per share ("Common Stock"),
(other than those that are owned by Larcan and those for which
appraisal rights have been perfected in accordance with the Delaware
General Corporation Law ("DGCL")) will be converted into the right to
receive $0.0625 in cash, without interest ("Merger Consideration").
See "SPECIAL MEETING--Proposal to be
<PAGE>
Considered at the Special Meeting," "The MERGER AGREEMENT--General,"
"THE MERGER AGREEMENT--Effective Time of the Merger," and "THE MERGER
AGREEMENT--Merger Consideration."
As soon as practical after the Merger, Larcan will cause to be
mailed to the Company's stockholders' instructions regarding the
surrender of their certificates, together with a letter of
transmittal for that purpose. The Merger Consideration will be
distributed to each stockholder of the Company upon the surrender by
such stockholder of the certificate or certificates which prior to
the Merger represented shares of the Common Stock accompanied by a
duly executed letter of transmittal and such other document as may be
required thereby. After the Merger, each outstanding certificate
which prior thereto represented shares of the Common Stock (other
than those shares owned by Larcan and those shares for which
appraisal rights have been perfected in accordance with Section 262
of the DGCL) will be deemed to represent only the right to receive
the Merger Consideration. See "THE MERGER AGREEMENT--Merger
Consideration" and "APPRAISAL RIGHTS."
Vote Required
The affirmative vote of a majority of the shares of the Common
Stock outstanding on October 27, 1997 is required for approval and
adoption of the Merger Agreement. Abstentions and broker non-votes
will have the effect of a vote against the Merger. See "SPECIAL
MEETING--Record Date; Voting Rights" and "THE MERGER
AGREEMENT--Voting Requirements."
Larcan holds 9,053,195 shares of Common Stock, representing
approximately 78.42% of the outstanding shares of the Company. Mr.
Dirk B. Freeman and Dr. Byron W. St. Clair each holds 905,803 and
517,378 shares, respectively, of Common Stock, representing
approximately 7.85% and 4.48%, respectively, of the outstanding
shares of the Company. Each of Mr. Freeman and Dr. St. Clair has
agreed to vote all of his shares of the Common Stock in favor of the
approval and adoption of the Merger Agreement.
The shares of Common Stock held by Larcan, Mr. Freeman and Dr.
St. Clair are sufficient to constitute a quorum for transacting
business at the Special Meeting and approve the Merger Agreement
without the vote of other stockholders.
Effective Time of the Merger
The Merger will become effective upon the filing of a
Certificate of Merger with the Office of the Secretary of State of
the State of Delaware. It is anticipated that the
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filing will be made promptly following the Special Meeting, assuming
that the conditions to closing have been satisfied or, if
permissible, waived. See "THE MERGER AGREEMENT--Effective Time of the
Merger" and "--Conditions to Closing."
Purpose and Reason for the Merger
The purpose of the Merger is to effect the acquisition by Larcan
of the entire equity interest in the Company. See "THE
MERGER--Purpose and Effects of and Alternatives to the Merger."
Fairness of the Merger
The Company believes that the Merger is fair to unaffiliated
holders of the Common Stock. Larcan believes that the Merger is fair
to unaffiliated holders of the Common Stock based principally upon
the procedures utilized by the Company in negotiating the Merger
Consideration.
Federal Tax Consequences
The receipt of the Merger Consideration pursuant to the Merger
will be a taxable transaction for the holders of the Common Stock for
federal income tax purposes and may result in taxation to such
holders under applicable state, local and foreign or other tax laws.
The gain or loss on the transaction will be a capital gain or loss if
the stock is a capital asset in the hands of the stockholders. See
"THE MERGER--Certain Federal Income Tax Consequences."
EACH STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S OWN TAX
ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH
STOCKHOLDER OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
Financing the Merger
The closing of the Merger is not conditioned on the receipt of
financing. The total Merger Consideration of approximately
$155,671.19 will be paid from Larcan's working capital.
Conduct of Business After the Merger
The Company will survive the Merger as a direct wholly-owned
subsidiary of Larcan and will continue to hold and own all of its
properties and assets. It is contemplated that after the Merger,
Larcan will continue to operate the Company as a wholly-owned
subsidiary. Larcan intends to achieve
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<PAGE>
operating efficiencies by consolidating the overhead of Larcan
and the Company. See "THE MERGER--Conduct of Business of the
Company After the Merger."
Appraisal Rights
Pursuant to Section 262 of the DGCL ("Section 262"), a
stockholder has the right to seek appraisal of such holder's shares
and to be paid the "fair value" thereof in cash if the Merger is
consummated and the holder strictly complies with the procedures set
forth in Section 262. Failure to comply strictly with such procedures
will result in a loss of such appraisal rights. See "SPECIAL
MEETING--Record Date; Voting Rights" and "APPRAISAL RIGHTS" below.
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<PAGE>
SPECIAL MEETING
Proposal to be Considered at the Special Meeting
At the Special Meeting, the stockholders of LTTC will be asked
to consider and vote upon a proposal to approve and adopt the Merger
Agreement by and among the Company, Larcan, and LSI.
The Merger Agreement provides for the Merger with LTTC being the
Surviving Corporation and becoming a wholly-owned subsidiary of
Larcan.
At the Effective Time, (a) each share of the Common Stock
outstanding immediately prior to the Effective Time (other than
shares owned by Larcan or for which appraisal rights have been
perfected in accordance with the DGCL) will be converted into the
right to receive the Merger Consideration, (b) each share of the
Common Stock held in the Treasury of LTTC at the Effective Time, if
any, will be cancelled and retired and cease to exist (and no
consideration will be paid with respect thereto), (c) each share of
the Common Stock held by Larcan at the Effective Time will be
cancelled and retired and cease to exist (and no consideration will
be paid with respect thereto), and (d) each share of the common stock
of LSI will be converted into one share of the Common Stock of the
Surviving Corporation. A copy of the Merger Agreement is attached to
this Proxy Statement as Annex A.
Record Date; Voting Rights
Only stockholders of record at the close of business on October
27, 1997 will be entitled to vote at the Special Meeting. On October
27, 1997, there were 11,543,934 outstanding shares of Common Stock,
each of which is entitled to one vote. The presence in person or by
proxy at the Special Meeting of the holders of a majority of the
shares of Common Stock will constitute a quorum for the transaction
of business.
With respect to the Merger Agreement, approval will require the
affirmative vote of a majority of the issued and outstanding shares
of Common Stock. Shares of Common Stock represented at the Special
Meeting that are not voted and abstentions will have the effect of
votes cast against approval of the Merger Agreement.
Brokers who hold shares in street name for customers who are the
beneficial owners do not have the authority to vote on a merger
without specific instruction from their customers. Such broker
non-votes (arising from the lack of instruction
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from beneficial owners) will not be included in the vote total on the
proposal and thus will have the effect of votes cast against the
Merger Agreement.
Larcan holds shares of Common Stock representing approximately
78.42% of the shares of Common Stock entitled to vote on the adoption
of the Merger Agreement. Mr. Dirk B. Freeman and Dr. Byron W. St.
Clair, directors of the Company, each holds shares of Common Stock
representing approximately 7.85% and 4.48%, respectively. Each of Mr.
Freeman and Dr. St. Clair has agreed to vote all of their shares of
the Common Stock in favor of the approval and adoption of the Merger
Agreement.
The shares of Common Stock held by Larcan, Mr. Freeman and Dr.
St. Clair will constitute a quorum for the transaction of business at
the Special Meeting and will be sufficient to approve the Merger
Agreement without the vote of other stockholders.
Voting and Revocation of Proxies
If the enclosed form of proxy is properly executed and returned
to the Company in time to be voted at the Special Meeting, the shares
represented thereby will be voted in accordance with the instructions
marked thereon. Executed but unmarked proxies will be voted "FOR"
approval of the Merger Agreement. If any other matters are properly
brought before the Special Meeting, the persons named in the
accompanying proxy will vote the shares represented by the proxies on
such matters as determined by a majority of the Board of Directors.
Any proxy may be revoked at any time before it is exercised by
giving written notice of such revocation or delivering a later dated
proxy to the Corporate Secretary of the Company prior to the meeting,
or by the vote of the stockholder in person at the meeting.
Appraisal Rights
Holders who do not vote in favor of, or who abstain from voting
on, the Merger Agreement and who comply with the provisions of
Section 262 have the right to be paid in cash the "fair value" of
their shares of the Common Stock. A stockholder contemplating the
exercise of the appraisal rights provided by Section 262 should
carefully review that Section, including without limitation the
procedural steps required to perfect those rights. A summary
description of those rights is provided under "APPRAISAL RIGHTS"
below. A stockholder who fails to comply strictly with the
requirements under Section 262 will lose such appraisal rights and
will be entitled to
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<PAGE>
the Merger Consideration for the shares of the Common Stock held by
such stockholders.
Solicitation of Proxies
The cost of soliciting proxies in the form enclosed herewith
will be borne by the Company. In addition to the solicitation of
proxies by mail, the Company, through its directors, officers and
regular employees, may also solicit proxies personally or by
telephone. The Company also will request persons, firms and
corporations holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy
material to and obtain proxies from the beneficial owners and will
reimburse the holders for their reasonable expenses in so doing.
THE MERGER
History and Background
In early 1993, Larcan, an international manufacturer of VHF
transmitters, received a request from a major customer for a solid
state UHF transmitter. Although Larcan was engaged in the development
of such a product, at that time it did not have a transmitter that
would satisfy its customer's needs. The customer stipulated that the
transmitter had to be placed "on air" by a date in advance of the
date that Larcan anticipated its own UHF product would be available.
To meet its customer's needs, Larcan sought to acquire a UHF
transmitter that could be used by the customer on an interim basis
pending completion and delivery of Larcan's own product. Larcan
approached Technology Television Corporation ("TTC") for the product.
During the course of purchasing the UHF transmitter, Larcan
identified a potential for synergy between Larcan and TTC based on
their respective product lines. Major products of each company were
viewed as complementary rather than competitive, including the TTC
UHF transmitter acquired by Larcan and the solid state UHF
transmitter being developed by Larcan, each of which was targeted for
a different segment of the transmitter market.
Larcan viewed TTC as a strategic investment opportunity through
which Larcan could strengthen its position in both the domestic and
international markets. Larcan also believed that an association with
TTC could lead to a reduction in the combined research and
development expenditures of both companies and an opportunity to sell
TTC products to existing Larcan customers.
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<PAGE>
On October 1, 1993, Larcan, TTC and certain of TTC's
stockholders entered into a stock purchase agreement (the "Purchase
Agreement") pursuant to which Larcan purchased an aggregate of
4,053,195 shares of Common Stock, representing approximately 61.9% of
TTC's then outstanding shares, for $.275 per share. Pursuant to the
terms of the Purchase Agreement, Larcan also exercised its right to
designate a majority of the members of TTC's Board of Directors. In
February 1994, TTC's stockholders approved a change of the name of
TTC to "Larcan-TTC Inc."
After investing in the Company and changing the Company's
corporate name to Larcan-TTC Inc., Larcan concluded that it would be
required to provide more support to the Company and its business than
originally anticipated. The trade name "Larcan" is associated with
premium quality product lines serving the primary full service
broadcast market. In order to meet customers' needs and improve
customers' perception of the Company, Larcan found it necessary to
advance funds to the Company and to provide engineering and other
support for the Company's product lines.
In June 1995, Larcan agreed to purchase an additional 5,000,000
shares of Common Stock for $500,000 and 500,000 shares of 5%
cumulative, convertible preferred stock (the "Preferred Stock") for
$500,000. Each share of Preferred Stock, together with accumulated
dividends, is convertible at any time into shares of Common Stock at
a price of $0.10 per share. Payment received by the Company from
Larcan for the additional shares of Common Stock and the shares of
Preferred Stock was applied to satisfy a portion of the Company's
indebtedness to Larcan which had arisen through prior advances made
by Larcan. The issuance of such shares of Common Stock and Preferred
Stock was approved by the Company's stockholders. As a result of
those purchases, Larcan's beneficial ownership in the Company
increased from approximately 61.9% to approximately 78.4%.
In early 1997, after reviewing consolidated financial statements
for the Larcan fiscal year ended December 31, 1996, and the financial
results of the Company for the six month period then ended, Larcan
reevaluated its investment in the Company and considered the
Company's future prospects. Although the Company has products in
development targeted for a High Definition Television ("HDTV") system
and an HDTV digital television ("DTV") development schedule has now
been established, Larcan believes that the Company's poor financial
condition, coupled with the modest level of technology developed by
the Company to date, would preclude the Company from completing a
product that would adequately meet the requirements of the emerging
DTV market. In addition, in
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fiscal year 1997, unexpected costs related to the development of
another transmitter has delayed the introduction of that product
beyond the date previously forecasted by the Company and further
adversely affected the Company's financial condition.
Since 1993, the Company has experienced net losses for each
fiscal year. Such losses have increased from a net loss of $1,200,000
for the fiscal year ended June 30, 1993 to a net loss of $2,353,000
for the fiscal year ended June 30, 1997 (including adjustments for
interest accrued on advances made to the Company by Larcan, as
described below). In addition, the Company's net working capital
deficiency has increased from $409,000 at June 30, 1993 to $6,099,000
at June 30, 1997.
In addition, in order to finance inventory purchases and its
working capital deficit, the Company has relied almost exclusively on
advances from Larcan. In the fiscal year ended June 30, 1997, Larcan
advanced a total of $2,700,000 to the Company. At June 30, 1997, the
Company's advances from Larcan totalled $6,500,000, exclusive of
interest. Pursuant to the terms of a promissory note delivered
pursuant to a loan agreement between Larcan and the Company, all
advances made by Larcan to the Company became payable on demand as of
August 1, 1997.
In May of 1997 as a result of its evaluation of the Company's
financial condition, Larcan approached Mr. Freeman and Dr. St. Clair
for discussion of the options available to Larcan and the Company,
including the Company's seeking additional capital, scaling down the
Company's operations, voluntary bankruptcy or a possible merger
transaction. See "--Purpose and Effects of and Alternatives to the
Merger." Larcan believed that if it could agree to an acceptable
share price for merger purposes for the Freeman-St. Clair equity
interest in the Company, negotiated on an arm's length basis, Mr.
Freeman and Dr. St. Clair would, in effect, be representing the
interests of all of the Company's minority stockholders.
In their negotiations with Larcan, Mr. Freeman and Dr. St. Clair
had access to independent advisors and, on May 28, 1997, reached an
agreement in principle with respect to the Merger. The Board of
Directors of the Company met on July 17, 1997 and approved the
execution of the Merger Agreement in the form attached hereto as
Annex A. There are no arrangements, agreements, or understandings
with respect to Mr. Freeman's and Dr. St. Clair's continued role in
the Company following the Merger.
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<PAGE>
Recommendations of the Company's Board of Directors; Fairness
of the Merger
At a special meeting of the Board of Directors held on July 17,
1997 the Board unanimously determined that the Merger is fair to and
in the best interests of the Company and its stockholders and
recommended that the stockholders approve and adopt the Merger
Agreement. In reaching its determination, the Board consulted with
the Company's management, as well as its legal advisors, and
considered a number of material factors, including those material to
its decision as discussed below.
In evaluating the fairness of the Merger, the Board of Directors
gave particular consideration to Mr. Freeman's and Dr. St. Clair's
roles in connection with the Merger. Mr. Freeman and Dr. St. Clair
are independent directors who, after Larcan, are the two largest
holders of the Common Stock. Larcan negotiated the Merger
Consideration on an arms length basis with Mr. Freeman and Dr. St.
Clair as the principal stockholders of the Company. Mr. Freeman, Dr.
St. Clair and the Company had access to independent advisors in these
negotiations. In effect, Mr. Freeman and Dr. St. Clair represented
the interests of all of the holders of the Common Stock in an arms
length negotiation of a fair price for the Merger Consideration.
The Board of Directors also evaluated the impact on the Company
of not approving the Merger. The Board of Directors first considered
the financial and other problems facing the Company since 1993. The
Board of Directors concluded that the net losses and working capital
deficits likely would continue for the foreseeable future. Moreover,
without Larcan's continued financial support, the Company's
independent accountants advised the Company that its report on the
Company's financial statements would be qualified with respect to the
Company's ability to continue as a going concern. In the absence of
the Merger, the Board of Directors believed that it was unlikely that
Larcan or any other investor would continue to infuse capital into
the Company. Accordingly, the Board of Directors concluded that,
absent the Merger, the Company would cease operating and a
dissolution or liquidation would occur in the near future. Although
the Board of Directors did not formally evaluate the value of the
Company upon such a dissolution and liquidation, it believed that,
after repayment of the Company's existing indebtedness, no proceeds
would be available for distribution to holders of Common Stock.
The Board of Directors also viewed as favorable in its
deliberations the availability of appraisal rights to
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<PAGE>
stockholders under Section 262 of the DGCL. Any stockholder who
believes that the Merger Consideration is inadequate will, by
strictly complying with Section 262, be able to have the fair value
of his or her shares of Common Stock judicially determined.
The Board of Directors was aware that the Merger Consideration
did not represent a premium to the market price of a share of the
Common Stock. The Board of Directors noted, however, that there is no
meaningful trading market for the Common Stock. Although the Common
Stock is eligible for trading in the over-the-counter market, there
have been no reported trades since May 28, 1997. Accordingly, the
Board of Directors concluded that the Merger Consideration, which was
determined as a result of arms length negotiations between Larcan, on
the one hand, and Mr. Freeman and Dr. St. Clair on the other hand,
more accurately reflected the value of a share of Common Stock at the
current time. The Board also determined that Mr. Freeman and Dr. St.
Clair fairly represented the interests of all of the holders of the
Common Stock and that, the absence of such a premium notwithstanding,
the Merger was fair and in the best interests of the Company's
stockholders.
In connection with the Merger, the Company did not retain a
financial advisor to evaluate and render an opinion with respect to
the fairness of the Merger Consideration from a financial point of
view. The Board of Directors believed that the fees of such an
advisor would be disproportionate to the aggregate Merger
Consideration and, accordingly, could reduce funds that otherwise
might be made available to stockholders.
In addition to the various factors discussed above, the Board of
Directors considered that, if the Merger is completed, the Company's
stockholders will be unable to share in any improvement in the
Company's financial condition and prospects arising from the
Company's sale of existing products or new products for the HDTV
market. The Board of Directors concluded, however, that the timing of
such improvement, if any, is uncertain and speculative, and product
development costs are expected to be significant. Moreover, in order
to take advantage of opportunities in the HDTV market, the Company
will require a continued source of capital to continue to develop,
and ultimately market, new products. As discussed above, without
Larcan's continued financial support, the Board of Directors believes
that it is unlikely that these objectives would be realized.
Based on the foregoing, the Board of Directors concluded that
the Merger is fair to and in the best interests of the Company and
its stockholders. Accordingly, the Board of
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Directors unanimously voted to recommend that stockholders vote "FOR"
the Agreement.
The discussion of the information and factors considered and
given weight by the Board of Directors is not intended to be
exhaustive. In view of the wide variety of factors considered in
connection with its evaluation of the terms of the Merger, the Board
did not find it practicable to, and did not, quantify or otherwise
attempt to assign relative weight to the specific factors considered
in reaching its determinations. In addition, individual members of
the Board may have given different weight to different factors.
Recommendations of Larcan as to the Fairness of the Merger
Larcan was not privy to the deliberations of Mr. Freeman and Dr.
St. Clair, the two independent directors on the Company's Board of
Directors, and did not receive any report, opinion or appraisal from
any outside party as to the fairness of the Merger to the
stockholders of the Company. Nevertheless, Larcan believes that the
Merger is fair to the unaffiliated holders of the Common Stock. This
opinion is based principally on Larcan's belief that the procedures
used to negotiate the Merger Consideration resulted in a transaction
that is fair to unaffiliated stockholders. It was significant to
Larcan's determination in this regard that the two independent
directors, who, after Larcan, are the two largest shareholders of the
Company, were in favor of the Merger. Such independent directors are
not past or present employees or affiliates of Larcan and there are
no agreements or understandings with respect to their continued role
in the Company. See "--History and Background."
While Larcan recognizes that approval of the Merger does not
require the affirmative vote of a majority of the shares of Common
Stock held by non-affiliates of the Company, Larcan believes that the
procedures employed by the Company were reasonably implemented to
ensure fairness to such holders.
In determining that the Merger is fair to the unaffiliated
stockholders of the Company, Larcan also considered the following
factors which Larcan believes bear on the Company's business and the
Merger:
(i) the competitive conditions of, and the Company's position
and reputation in, the radio and television broadcasting and
communications industry;
(ii) the fact that it is unlikely that the Company will continue
as a going concern without Larcan's continued financial support;
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(iii) the current and historical market price and limited
trading volume of the Common Stock; and
(iv) Larcan's belief that upon dissolution and liquidation of
the Company and repayment of the Company's indebtedness, no proceeds
would remain for stockholders.
While Larcan did not quantify the importance of the foregoing
factors, the role of Mr. Freeman and Dr. St. Clair described above,
as well as factors (ii), (iii), and (iv) received the greatest weight
in Larcan's consideration of fairness of the Merger.
As also noted by the Company's Board of Directors in its
discussion of fairness of the Merger to the unaffiliated stockholders
of the Company (see "--Recommendations of the Company's Board of
Directors; Fairness of the Merger"), Larcan believes that absent a
continued capital infusion, the Company is at a competitive
disadvantage vis-a-vis many other companies in the same industry and
consequently would have only a limited ability to participate in the
development, production and marketing of new products and
technologies. On balance, Larcan believes that the Merger will
provide the unaffiliated stockholders of the Company fair value for
their investment in the Company without requiring that such
stockholders undertake the risk attendant to the Company's remaining
independent.
In addition to the procedures discussed above, Larcan noted that
Section 262 affords the Company's stockholders with appraisal rights
such that any stockholder who believes that $0.0625 per share is
unfair or inadequate, and who strictly complies with Section 262,
will be able to have the fair value of his, her or its shares of
Common Stock judicially determined.
No other factors were considered by Larcan in arriving at their
determination that the Merger is fair to the unaffiliated
stockholders of the Company.
Purpose and Effects of and Alternatives to the Merger
The purpose of the Merger is to effect the acquisition by Larcan
of the entire equity interest in the Company. Larcan believes that a
combination at this time of the Company and Larcan will enhance the
efficient use of management, engineering and capital resources and
generally promote strategic, operational and financial synergies.
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Larcan has concluded that it will continue to bear the risks of
its investment in the Company only if it can operate the Company as a
wholly-owned subsidiary, and thereby fully integrate the Company and
its products into the Larcan corporate structure. Larcan believes
that if the Company is a wholly-owned subsidiary, Larcan will be
better able to direct the Company's business and respond to the
Company's engineering needs, and generally promote strategic
operational and financial synergies. Larcan also will be able to
benefit from the future success, if any, of HDTV-related products,
should the development of these products be completed by the Company.
The acquisition of the Company by Larcan has been structured as
a merger of LSI into the Company with the Company as the surviving
entity in order to effectuate the foregoing purposes and to preserve
the Company's existing contractual arrangements with third parties.
While the Company's Board of Directors considered other alternatives
to the Merger, including (i) seeking capital elsewhere, (ii) scaling
down or closing the Company's operations, and (iii) commencing a
voluntary case under either Federal or state bankruptcy law, the
Company concluded that, in light of Larcan's current equity interest
in the Company and the significant indebtedness of the Company to
Larcan, the Merger was the Company's most viable alternative. The
Company's Board of Directors concluded that (i) it would not be
possible to obtain capital from an entity other than Larcan or
without Larcan's guarantees and (ii) scaling down the Company's
operations would preclude the Company from successfully developing
products that would enable the Company to continue as a going concern
in the future (e.g. HDTV and DTV).
As a result of the Merger, the entire equity interest of the
Company will be owned by Larcan. Following the Merger, the present
holders of the Common Stock will no longer have an equity interest in
the Company and will no longer share in any future earnings or growth
of the Company, the risks associated with achieving any such earnings
and growth, or the potential to realize greater value for their
shares of the Common Stock through divestitures, strategic
acquisitions or other corporate opportunities that could have been
pursued by the Company. Instead, each such holder of shares of the
Common Stock will have the right to receive a cash payment of $0.0625
per share of Common Stock held or to seek appraisal rights as
described below under "APPRAISAL RIGHTS" pursuant to a transaction
which has been determined by the Board of Directors, as discussed
above, to be fair to such stockholders. See "Recommendations of the
Company's Board of Directors; Fairness of the Merger."
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Subsequent to the Merger, the registration of the Common Stock
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), will be terminated and the Company will cease filing reports
with the Commission.
The Merger Agreement is not structured so that approval of at
least a majority of unaffiliated stockholders is required. Based upon
the steps taken by the Company and its Board of Directors described
in detail elsewhere in this Proxy Statement, the Company believes
that the procedures followed approving the Merger Agreement for
recommendation to the stockholders of the Company were fair.
Holders of the Common Stock have the right to demand appraisal
of, and obtain payment for, the "fair value" of their shares by
following the procedures prescribed in Section 262, which is
summarized under "APPRAISAL RIGHTS" below. Failure to take any of the
steps required under Section 262 on a timely basis could result in
the loss of appraisal rights.
Conduct of Business of the Company After the Merger
Following consummation of the Merger, LTTC, as the Surviving
Corporation, will be operated as a direct wholly-owned subsidiary of
Larcan and will continue to hold and own all of its properties and
assets. The persons identified in Annex B as the directors of LSI
will be the initial directors of the Surviving Corporation. The
persons identified as such in Annex B will be the initial officers of
the Surviving Corporation. The Merger is anticipated to result in
overall savings as the overhead of Larcan and the Company are
consolidated.
Certain Federal Income Tax Consequences
The receipt of the Merger Consideration for the Common Stock
pursuant to the Merger will be a taxable transaction for the holders
of the Common Stock for federal income tax purposes under the
Internal Revenue Code of 1986, as amended (the "Code"), and also may
result in taxation to such holders under applicable state, local,
foreign and other tax laws.
In general, under the Code, a stockholder will recognize gain or
loss equal to the difference between the tax basis for the shares of
the Common Stock sold and the amount of cash received in exchange
therefor. Such gain or loss will be long-term capital gain or loss if
the holding period for the shares of the Common Stock is more than
one year. The distinction between capital gain and ordinary income
may be relevant for certain other purposes, including the taxpayer's
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<PAGE>
ability to utilize capital loss carryovers to offset any gain
recognized.
The foregoing discussion of the federal income tax consequences
may not be applicable to stockholders who acquired their shares of
the Common Stock pursuant to the exercise of options or other
compensation arrangements or who are not citizens or residents of the
United States or who are otherwise subject to special tax treatment
under the Code. The tax effects of the transaction under state,
local, foreign and other tax laws may be different.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER IS INCLUDED FOR GENERAL INFORMATION ONLY
AND IS BASED ON EXISTING TAX LAW AS OF THE DATE OF THIS PROXY
STATEMENT, WHICH MAY DIFFER ON THE DATE OF THE CONSUMMATION OF THE
MERGER OR AT THE EFFECTIVE TIME. EACH STOCKHOLDER IS URGED TO CONSULT
SUCH STOCKHOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO SUCH STOCKHOLDER OF THE TRANSACTION, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
Accounting Treatment
The Merger will be accounted for as a "purchase" as that term is
used under generally accepted accounting principles for accounting
and financial reporting purposes.
Financing of Merger Consideration
Larcan intends to finance the Merger through its working
capital.
The aggregate of the fees and expenses that are estimated to be
incurred by the Company, Larcan and LSI in connection with the Merger
are as follows:
Legal fees and expenses $ 60,000.00
Accounting fees and expenses $ 5,000.00
Printing and mailing expenses $ 4,750.00
Filing fees $ 31.13
Transfer Agent and Paying Agent fees $ 3,500.00
TOTAL $ 73,281.13
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<PAGE>
THE MERGER AGREEMENT
General
The Merger Agreement provides for the merger of LSI with and
into the Company, with the Company being the Surviving Corporation.
As a result of the Merger, the Company will be a wholly-owned
subsidiary of Larcan. LTTC's Certificate of Incorporation and Bylaws
will be the charter documents of the Surviving Corporation.
The following summary of the terms of the Merger and the Merger
Agreement is qualified in its entirety by the terms of the Merger
Agreement attached as Annex A to this Proxy Statement.
Effective Time of the Merger
The Effective Time will occur upon the filing of a Certificate
of Merger with the Secretary of State of the State of Delaware in the
manner provided under the DGCL. The Company anticipates that the
closing of the Merger transaction and the filing of the Certificate
of Merger will occur promptly following the Special Meeting.
Merger Consideration
Under the terms of the Merger Agreement, at the Effective Time,
(a) each share of the Common Stock outstanding immediately prior to
the Effective Time (other than shares owned by Larcan and shares for
which appraisal rights under the DGCL have been perfected) will be
converted into the right to receive the Merger Consideration, (b)
each share of Common Stock owned by Larcan immediately prior to the
Effective Time will be cancelled and retired and cease to exist (and
no consideration will be paid with respect thereto) (c) each share of
the Common Stock held in the treasury of the Company at the Effective
Time, if any, will be cancelled and retired and cease to exist (and
no consideration will be paid with respect thereto), and (d) each
share of the common stock of LSI will be converted into one share of
the Common Stock of the Surviving Corporation.
Instructions with regard to the surrender of certificates
representing shares of the Common Stock which are entitled to receive
the Merger Consideration, together with a letter of transmittal to be
used for that purpose, will be mailed to each holder thereof as soon
as practicable after the Effective Time. American Securities Transfer
and Trust, Inc., as the paying agent (the "Paying Agent"), as soon as
practicable following receipt from a stockholder of a duly executed
letter
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<PAGE>
of transmittal, together with certificates representing the shares
being surrendered and any other items specified in the letter of
transmittal, shall pay such stockholder, by check, the Merger
Consideration to which he, she or it is entitled.
STOCKHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES
FOR SHARES OF THE COMMON STOCK WITH THE ENCLOSED PROXY CARD
After the Effective Time, holder of certificates representing
shares of the Common Stock who do not perfect their appraisal rights
under the DGCL will cease to have any rights as a stockholder of the
Company and such holder's sole right will be to receive the Merger
Consideration to which he, she or it is entitled. In no event will
any holder be entitled to receive any interest on the Merger
Consideration to be distributed in connection with the Merger.
At the Effective Time, the stock transfer books of the Company
will be closed with respect to shares of the Common Stock issued and
outstanding immediately prior to the Effective Time and no transfers
will be made thereafter on the Company's stock transfer books.
Certificates representing former shares of the Common Stock of the
Company which are presented to the Paying Agent will be cancelled in
exchange for the Merger Consideration.
At or prior to the Effective Time, Larcan will provide the
Paying Agent with sufficient funds to enable the Paying Agent to pay
the aggregate Merger Consideration. The Paying Agent will hold the
funds in trust and deliver the funds (in the form of checks of the
Paying Agent) to the person entitled thereto upon surrender of their
certificates representing shares of the former Common Stock. Any cash
delivered to the Paying Agent pursuant to the Merger Agreement and
not paid upon the surrender of such certificates within one year
after the Effective Time will be returned to Larcan, subject of the
rights of holders of unsurrendered certificates.
Conditions to Closing
The obligations of Larcan and LSI to consummate the transactions
contemplated by the Merger Agreement are subject to the satisfaction
of certain conditions including without limitation (a) approval and
adoption of the Merger Agreement by the requisite vote of the
stockholders of the Company, (b) receipt by the Company of all
required consents and approvals and all other requirements prescribed
by law which are necessary to the consummation of the transactions
contemplated by the Merger Agreement, and all statutory waiting
periods in respect thereof shall have expired, (c) the
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<PAGE>
absence of (i) any inquiry, action or proceeding which, in the
opinion of Larcan, is material, that is instituted to restrain or
prohibit the carrying out of the transactions contemplated by the
Merger Agreement or to challenge the validity of such transactions or
any part thereof, or seeking damages on account or as a result
thereof or (ii) any material adverse change in the financial
condition, results of operations, business or prospects of the
Company since June 30, 1997.
Termination or Amendment of Merger Agreement
At any time prior to the Effective Time the Merger Agreement may
be terminated by the Boards of Directors of the Company, Larcan and
LSI notwithstanding approval thereof by the stockholders of the
Company. Subject to the applicable provisions of the DGCL, the Boards
of Directors of such entities also may amend the Merger Agreement at
any time prior to the Effective Time.
Voting Requirements
Under the DGCL, the Merger Agreement must be approved by the
holders of a majority of the outstanding shares of the Common Stock
entitled to vote at the Special Meeting. Abstentions and broker
non-votes will not be voted for or against the proposal to approve
and adopt the Merger Agreement but will have the effect of a negative
vote because the affirmative vote of holders of a majority of the
shares of the Common Stock entitled to vote is required to pass such
proposal.
Mr. Dirk B. Freeman and Dr. Byron W. St. Clair each has agreed
with Larcan to vote all of their respective shares of the Common
Stock of LTTC in favor of the approval and adoption of the Merger
Agreement, which shares in the aggregate represent approximately
12.33% of the shares of the Common Stock entitled to vote at the
Special Meeting. Larcan holds 9,053,195 shares, which shares
represent approximately 78.42% of the shares of the Common Stock
entitled to vote at the Special Meeting. The number of shares of the
Common Stock held or controlled by Larcan, Mr. Freeman and Dr. St.
Clair represents a majority of the shares of the Common Stock
entitled to vote on the Merger Agreement and, if voted in favor of
the Merger Agreement, will be a sufficient number to approve the
Merger Agreement.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR
ADOPTION AND APPROVAL OF THE MERGER AGREEMENT.
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<PAGE>
APPRAISAL RIGHTS
Holders of record of the Common Stock who comply with the
applicable statutory procedures summarized herein will be entitled to
appraisal rights under Section 262 of the DGCL. A person having a
beneficial interest in the Common Stock held of record in the name of
another person, such as a broker or nominee, must act promptly to
cause the record holder to follow the steps summarized below properly
and in a timely manner to perfect appraisal rights.
The following discussion is not a complete statement of the law
pertaining to appraisal rights under the DGCL and is qualified in its
entirety by the full text of Section 262. All references in Section
262 and in this summary to a "stockholder" are to the record holder
of shares of the Common Stock as to which appraisal rights are
asserted.
The failure of a stockholder to vote against a proposal will
not, in and of itself, constitute a waiver of such stockholder's
appraisal rights under Section 262.
Under the DGCL, holders of shares of the Common stock who follow
the procedures set forth in Section 262 will be entitled to have
their shares appraised by the Delaware Chancery Court and to receive
payment in cash of the "fair value" of such shares at the Effective
Time, exclusive of any element of value arising from the
accomplishment or expectation of the Merger, together with a fair
rate of interest, if any, as determined by such court.
Under Section 262, where a proposed merger is to be submitted
for approval at a meeting of stockholders, the corporation, not less
than 20 days prior to the meeting, must notify its stockholders who
were stockholders on the record date for such meeting that appraisal
rights are so available, and must include in such notice a copy of
Section 262. This Proxy Statement constitutes such notice to the
holders of the Common Stock of the Company on the Record Date. Any
stockholder who wishes to exercise such appraisal rights or who
wishes to preserve his, her or its right to do so should review the
following discussion and the full text of Section 262 carefully
because the failure to timely and properly comply with the procedures
specified will result in the loss of appraisal rights under Section
262.
A holder of shares of the Common Stock wishing to exercise such
holder's appraisal rights (i) must not vote in favor of an adoption
of the Merger Agreement and (ii) must deliver to the Company prior to
the vote on the Merger Agreement at the Special Meeting, a written
demand for
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<PAGE>
appraisal of such holder's shares of the Common Stock. The written
demand must inform the Company of the identity of the stockholder and
that he, she or it intends thereby to demand appraisal of his, her or
its shares. Voting against (whether in person or by proxy),
abstaining from voting or failing to vote on approval and adoption of
the Merger Agreement will not constitute a demand for appraisal
within the meaning of Section 262. All written demands of appraisal
should be sent or delivered to the Company at 650 South Taylor
Avenue, Louisville, Colorado 80027, Attention: Corporate Secretary.
A holder of shares of the Common Stock wishing to exercise such
holder's appraisal rights must be the record holder of such shares on
the date the written demand of appraisal is made and must continue to
hold such shares of record until the Effective Time. Accordingly, a
holder of the Common Stock who is the record holder of shares of the
Common Stock on the date that written demand for appraisal is made,
but who thereafter transfers such shares prior to the Effective Time,
will lose any right to appraisal in respect of such shares.
Only a holder of record of shares of the Common Stock is
entitled to assert appraisal rights for shares of the Common Stock
registered in that holder's name. A demand for appraisal should be
executed by or on behalf of the holder of record, fully and
correctly, as such holder's name appears on such holder's stock
certificates. If shares of the Common Stock are owned of record in a
fiduciary capacity, such as by a trustee, guardian or custodian,
execution of the demand should be made in that capacity, and if the
shares of the Common Stock are owned of record by more than one
person as in a joint tenancy or tenancy in common, the demand should
be executed by or on behalf of all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute a demand
for appraisal on behalf of a holder of record; however the agent must
identify the record owner or owners and expressly disclose the fact
that in executing the demand, the agent is agent for such owner or
owners. A record holder such as a broker who holds shares of the
Common Stock as nominee for several beneficial owners may exercise
appraisal rights with respect to shares of the Common Stock held for
one or more beneficial owners while not exercising such rights with
respect to the shares of the Common Stock held for other beneficial
owners. In such case, the written demand should set forth the number
of shares of the Common Stock as to which appraisal is sought. If the
number of shares is not set forth, the demand will be treated as a
demand as to all shares of the Common Stock held in the name of the
record owners. Stockholders who hold their Common Stock in brokerage
accounts or other nominee form and who wish
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<PAGE>
to exercise appraisal rights are urged to consult with their brokers
to determine the appropriate procedures for the making of a demand
for appraisal by such a nominee.
The Surviving Corporation will within 10 days after the
Effective Date of the Merger notify such stockholders of the Company
who have complied with the statutory requirements summarized above
that the Merger has become effective. Within 120 days after the
effective date of the Merger, but not thereafter, the Surviving
Corporation or any stockholder who has complied with the statutory
requirements summarized above may file a petition in the Delaware
Chancery Court demanding a certification of the value of the stock of
all such stockholders. The Company has no obligation to and has no
present intention to file petition with respect to the appraisal of
the fair value of the shares of the Common Stock. Accordingly, it is
the obligation of the stockholders to initiate all necessary action
to perfect their appraisal rights within the time prescribed in
Section 262.
Within 120 days after the effective date of the Merger, any
stockholder who has complied with the requirements for exercising
appraisal rights will be entitled, upon written request, to receive
from the Surviving Corporation a written statement setting forth the
aggregate number of shares of the Common Stock not voted in favor of
adoption and approval of the Merger Agreement and with respect to
which demands for appraisal have been received and the aggregate
number of holders of such shares. Such statements must be mailed
within 10 days after a written request therefor has been received by
the Company.
If a petition for an appraisal is timely filed, after a hearing
on such petition, the Delaware Chancery Court will determine the
stockholders entitled to appraisal rights and will appraise the "fair
value" of their shares of the Common Stock, exclusive of any element
of value arising from the accomplishment or expectation of the
Merger, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. Stockholders
considering seeking appraisal should be aware that the fair value of
their shares of the Common Stock as determined under Section 262
could be more than, the same as, or less than the Merger
Consideration they would receive pursuant to the Merger Agreement if
they did not seek appraisal of their shares of the Common Stock. The
Delaware Supreme Court has stated that proof of value by any
techniques or methods which are generally considered acceptable in
the financial community and otherwise admissible in court should be
considered in the appraisal proceedings.
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<PAGE>
The costs of the action may be determined by the Delaware
Chancery Court and taxed upon the parties, as the Delaware Chancery
Court deems equitable in the circumstances. Upon application of a
stockholder, the Delaware Chancery Court may also order that all or a
portion of the expenses incurred by a stockholder in connection with
an appraisal, including, without limitation, reasonable attorney's
fees and the fees and expenses of experts utilized in the appraisal
proceeding, be charged pro rata against the value of all of the
shares entitled to an appraisal.
Any holder of shares of the Common Stock who has duly demanded
an appraisal in compliance with Section 262 will not, after the
Effective Time, be entitled to vote the shares subject to such demand
for any purpose or be entitled to the payment of dividends or other
distributions on those shares (except dividends or other
distributions payable to holders of record of shares of the Common
Stock as of a record date prior to the effective date of the Merger).
If any stockholder who properly demands appraisal of such
stockholder's shares of the Common Stock under Section 262 fails to
perfect, or effectively withdraws or loses, such stockholder's right
to appraisal, the shares of the Common Stock of such stockholder will
be converted into the right to receive the Merger Consideration. A
stockholder will fail to perfect, or effectively withdraw or lose,
such stockholder's right to appraisal if, among other things, no
petition for appraisal is filed within 120 days after the Effective
Time, or if the stockholder delivers to the Company a written
withdrawal of such stockholder's demand for appraisal and acceptance
of the Merger Consideration. Any such attempt to withdraw an
appraisal demand more than 60 days after the Effective Time of the
Merger will require the written approval of the Company.
Failure to follow the steps required by Section 262 for
perfecting appraisal rights will result in the loss of such rights
(in which event a stockholder will be entitled to receive the Merger
Consideration with respect to his, her or its shares of the Common
Stock in accordance with the Merger Agreement).
BUSINESS INFORMATION REGARDING LTTC AND LARCAN
LTTC is a fully integrated producer of television and FM radio
transmission equipment. At its Louisville, Colorado facility, LTTC
designs, develops, and manufactures a variety of FM and television
broadcast transmitters/translators including low power television
equipment and high power UHF
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<PAGE>
television equipment. LTTC also provides system design services,
sells accessory items manufactured by LTTC and others, and performs
installation as requested by its customers.
Additional information regarding the Company, including a
detailed discussion of its business, selected financial data, audited
financial statements with the independent accountants' reports
thereon, and management's discussion and analysis of financial
condition and results of operations, is included in the Company's
Annual Report on Form 10-K for the year ended June 30, 1997 ("Annual
Report") that accompanies this Proxy Statement and is incorporated by
reference herein. Except to the extent so incorporated, the Annual
Report shall not be deemed a part of the Company's proxy solicitation
materials.
Larcan and LSI
Larcan was established in 1981 when the employees of Canadian
General Electric ("CGE"), in association with LeBlanc & Royle
Enterprises Inc., purchased CGE's broadcast operation. Larcan and its
predecessor have been a major supplier of premium quality VHF
television transmitters for over thirty-five years. Larcan designs,
manufactures, sells, and services VHF solid state television
transmitters with powers from 10 watts to 60,000 watts and has more
recently manufactured and delivered 10,000 watt solid state UHF
transmitters.
Larcan is a majority-owned subsidiary of Le Blanc and Royle
Enterprises Inc., a telecommunications investment holding company
organized under the laws of Canada. The principal executive offices
of LeBlanc and Royle Enterprises Inc. are located at 514 Chartwell
Road, P.O. Box 880, Oakville, Ontario, L6J 5C5 and the telephone
number is (905) 844-1242.
LSI is a recently-formed Delaware corporation organized by
Larcan for the purpose of enabling Larcan to acquire LTTC. LSI has
not conducted any activities other than those related to its
formation, the preparation of this Proxy Statement and the Schedule
13E-3 filed with the Commission and the negotiation of the Merger
Agreement and its obligations thereunder.
The principal executive offices of each of Larcan and LSI are
located at 228 Ambassador Drive, Mississauga, Ontario, Canada L5T 2J2
and the telephone number of each is (905) 564-9222.
Certain information regarding the directors and executive
officers of Larcan is set forth in Annex B hereto.
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<PAGE>
MARKET PRICES FOR THE COMMON STOCK
The Common Stock is quoted on the Over the Counter System. The
following table sets forth, for the quarterly periods indicated, the
ask and bid prices or the Common Stock as reported on NASDAQ's Over
the Counter System. Such market quotations reflect interdealer prices
without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.
Quarter Ended Ask Bid
------------- --- ---
Dec-95 .3750 .1875
Mar-96 .3750 .1875
Jun-96 .3750 .1875
Sep-96 .2500 .1875
Dec-96 .2500 .0625
Mar-97 .2500 .0625
Jun-97 .2188 .0625
Sep-97 .2188 .0625
The Company has never declared or paid any cash dividends on its
Common Stock.
On July 17, 1997, the last trading day before Larcan and LTTC
publicly announced the anticipated Merger, the ask and bid prices of
the Common Stock of the Company on the NASDAQ Over the Counter System
was $.2188 and $.0625, respectively. On July 18, 1997, the ask and
bid price for the Common Stock of the Company on the NASDAQ Over the
Counter System were $.2188 and $.0625, respectively.
Principal Holders of Securities
The following table sets forth as of October 10, 1997, the
number and percentage of shares of the Company's Common Stock
beneficially owned by each person who was known by the Company to be
the beneficial owner of more than 4% of the shares of the Common
Stock.
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<PAGE>
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Ownership(1) of Class
------------------- ------------ --------
Larcan Inc. 9,053,195 78.42%
228 Ambassador Drive
Mississauga Ontario
Canada L5T 2J2
Dirk B. Freeman 905,803 7.85%
Director/President
650 South Taylor Avenue
Louisville, Colorado 80027
Byron W. St. Clair 517,379 4.48%
Chairperson of the Board/
Officer
650 South Taylor Avenue
Louisville, Colorado 80027
Security Ownership of Management
The following table sets forth, as of October 10, 1997, the
number and percentage of shares of the Common Stock owned
beneficially by each member of the Company's Board of Directors and
the executive officers of the Company.
Amount and
Nature of
Beneficial Percent
Name Ownership(2) of Class
---- ------------ --------
Byron W. St. Clair, Ph.D. 517,379 4.48%
Chairman of the Board
and Secretary
Paul A. Dickie
Director
Dirk B. Freeman 905,803 7.85%
Director
--------------------
(1) Nature of ownership is possession of sole investment and voting
power unless otherwise indicated.
(2) Except as otherwise indicated, nature of beneficial ownership is
possession of sole voting and investment power.
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<PAGE>
Nancy E. McGee 0 0.00%
Director
James D. Adamson
Director, Vice President 0 0.00%
G. James Wilson 0 0.00%
Director, President and CEO
All Directors and Executive 1,423,182 12.33
Officers
Attached as Annex B to this Proxy Statement is information
regarding the directors and executive officers of the Company,
Larcan, LSI and the Surviving Corporation. None of the directors or
executive officers identified in Annex B, other than those identified
in the chart above and the footnotes thereto, or as specified in
Annex B, beneficially owns any shares of the Common Stock as of the
date of this Proxy Statement.
INDEPENDENT ACCOUNTANTS
The financial statements for the Company and the notes thereto,
together with supplementary financial information for the fiscal year
ended June 30, 1997 included in the Annual Report accompanying this
Proxy Statement have been audited by Ehrhardt, Keefe, Steiner &
Hoffman PC ("EKSH"), the Company's independent public accountants for
the fiscal year ending June 30, 1997.
Representatives of EKSH are expected to be present at the
meeting with the opportunity to make a statement if they so desire
and are expected to be available to respond to appropriate questions.
MISCELLANEOUS
If the Merger is not consummated for any reason, the Company
intends to hold the 1997 Annual Meeting of Stockholders on or about
December 30, 1997. Any stockholder of the Company wishing to include
proposals in the proxy materials for such meeting must meet the
requirements of the rules of the Commission relating to stockholders'
proposals. Such proposals must have been received by the Secretary of
the Company in writing at the principal executive office of the
Company prior to November 28, 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to information requirements of the
Exchange Act, and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange
Commission ("Commission"). Such reports and other information may be
inspected and copied or obtained by mail upon payment of the
Commission's prescribed rates at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549.
This Proxy Statement includes information required by the
Commission to be disclosed pursuant to Rule 13E-3 under the Exchange
Act, which governs so-called "going private" transactions by certain
issuers or their affiliates. In accordance with such rule, the
Company, Larcan and LSI have jointly filed with the Commission, under
the Exchange Act, a Transaction Statement on Schedule 13E-3 with
respect to the Merger. This Proxy Statement does not contain all of
the information set forth in the Schedule 13E-3, parts of which are
omitted in accordance with the regulations of the Commission. The
Schedule 13E-3, and any amendments thereto, including exhibits filed
as a part thereof, will be available for inspection and copying at
the offices of the Commission as set forth above.
BY ORDER OF THE BOARD OF DIRECTORS
Louisville, Colorado
October __, 1997
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<PAGE>
Annex A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of July 17, 1997
by and among Larcan Inc., a Canadian corporation ("Larcan"), Larcan Sub, Inc., a
Delaware corporation and wholly-owned subsidiary of Larcan ("LSI"), and
Larcan-TTC Inc., a Delaware corporation ("LTTC"). (LSI and LTTC are referred to
herein collectively as the "Constituent Corporations.")
RECITALS
WHEREAS, the Boards of Directors of Larcan and LTTC each have determined
that it is in the best interests of their stockholders to effect the merger
provided for herein upon the terms and subject to the conditions set forth
herein; and
NOW, THEREFORE, in consideration of the premises, and of the agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
The Merger; Effective Time
1.1 The Merger. At the Effective Time (as defined in Section 1.2) LSI shall
be merged with and into LTTC and the separate corporate existence of LSI shall
thereupon cease (the "Merger"). LTTC shall be the surviving corporation in the
Merger (the "Surviving Corporation") and shall continue to be governed by the
laws of the State of Delaware, and the separate corporate existence of LTTC with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger. The Merger shall have the effects specified in the
Delaware General Corporation Law (the "DGCL").
1.2. Effective Time. The Merger shall be effective at 5:00 p.m. Eastern
Time on the day on which a Certificate of Merger is filed with the Secretary of
State of Delaware (the "Effective Time").
<PAGE>
ARTICLE II
Certificate of Incorporation and By-Laws
of the Surviving Corporation
2.1. The Certificate of Incorporation. The Certificate of Incorporation of
LTTC in effect at the Effective Time shall be the Certificate of Incorporation
of the Surviving Corporation, until duly amended in accordance with the terms
thereof and the DGCL.
2.2. The By-Laws. The By-Laws of LTTC in effect at the Effective Time shall
be the By-Laws of the Surviving Corporation, until duly amended in accordance
with the terms thereof and the DGCL.
ARTICLE III
Officers and Directors
of the Surviving Corporation
3.1. Officers and Directors. The directors of LSI at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation and the officers of LTTC shall, from and after the Effective Time,
be the officers of the Surviving Corporation, in each case until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-Laws and the DGCL.
ARTICLE IV
Effect of the Merger on Capital Stock
At the Effective Time, by virtue of the Merger and without any action on
the part of the holders of any capital stock of the Constituent Corporations:
(a) Each share of the Common Stock, par value $.01 per share, of LSI
(the "LSI Shares") issued and outstanding immediately prior to the Effective
Time shall be converted into one share of the Common Stock, par value $0.04 per
share of LTTC (the "LTTC Shares").
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<PAGE>
(b) Each LTTC Share issued and outstanding immediately prior to the
Effective Time (other than those owned by Larcan) shall be cancelled at the
Effective Time in exchange for the Merger Consideration (as defined below).
(c) Each LTTC Share issued and outstanding immediately prior to the
Effective Time that is owned by Larcan shall be cancelled at the Effective Time
without any consideration therefor.
(d) As used herein Merger Consideration means $0.0625, which equals
the sale price of each and every LTTC Share traded on its principal trading
market for 30 days immediately prior to the date hereof.
(e) At and after the Effective Time, each holder of a certificate or
certificates theretofore representing LTTC Shares ("OLD LTTC Shares") that were
converted into the Merger Consideration in the Merger (a "Certificate") may
surrender the same to LTTC or its agent for cancellation, and each such holder
shall be entitled upon such surrender to receive in exchange therefor a check in
an amount equal to the aggregate amount of cash to which such holder is entitled
to be paid pursuant to this Article IV, without interest. Until so surrendered,
each Certificate, after the Effective Time, shall be deemed for all purposes to
evidence the right to receive such payment. If any amount is to be paid to a
person other than the person to which the Certificate surrendered for exchange
is issued, the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such exchange
shall affix any requisite stock transfer tax stamps to the Certificate
surrendered or provide funds for their purchase or establish to the reasonable
satisfaction of LTTC or its agent that such taxes are not payable.
(f) At the Effective Time, the stock transfer books of LTTC shall be
closed regarding Old LTTC Shares and no transfer of Old LTTC Shares shall
thereafter be made or recognized. Any other provision of this Agreement
notwithstanding, neither LTTC nor its agent nor any party to the Merger shall be
liable to a holder of Old LTTC Shares for any amount paid or property delivered
in good faith to a public official pursuant to any applicable abandoned
property, escheat or similar law.
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<PAGE>
(g) Notwithstanding any other provision hereof, any holder of Old LTTC
Shares that perfects appraisal rights under the Section 262 of the DGCL shall
have their Old LTTC Shares converted into the consideration determined in
accordance with such statute.
ARTICLE V
Conditions; Termination
5.1 Conditions. Consummation of the Merger shall be subject to satisfaction
of the following conditions (unless waived by Larcan):
(a) The stockholders of LTTC shall have approved this Agreement and
the Merger by the vote required under the DGCL.
(b) No inquiry, action or proceeding which, in the opinion of Larcan,
is material shall have been instituted to restrain or prohibit the carrying out
of the transactions contemplated by this Agreement or to challenge the validity
of such transactions or any part thereof, or seeking damages on account or as a
result thereof.
(c) There shall have been no material adverse change in the financial
condition, results of operations, business or prospects of LTTC since March 31,
1997.
(d) All required consents and approvals shall have been obtained, all
other requirements prescribed by law which are necessary to the consummation of
the transactions contemplated hereby shall have been obtained, and all statutory
waiting periods in respect thereof shall have expired.
5.2 Termination. This Agreement may be terminated and the Merger
abandoned as follows:
(a) Larcan and LTTC may terminate this Agreement at any time prior to
the Effective Time, before or after the approval by the stockholders of LTTC, by
their mutual agreement;
(b) Larcan may terminate this Agreement at any time prior to the
Effective Time if it concludes in good faith that (i) there has been a material
adverse
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<PAGE>
change in the financial condition, results of operations, business or prospects
of LTTC since March 31, 1997 or (ii) any of the conditions specified in Section
5.1 is unlikely to be satisfied in a timely manner.
5.3 Effect of Termination and Abandonment. In the event of termination of
this Agreement and abandonment of the Merger pursuant to this Article V, no
party hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement.
ARTICLE VI
Miscellaneous and General
6.1. Modification or Amendment. Subject to the applicable provisions of the
DGCL, at any time prior to the Effective Time, Larcan and LTTC may modify or
amend this Agreement, by written agreement executed and delivered by their duly
authorized officers.
6.2. Counterparts; Effectiveness. For convenience of the parties hereto,
this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement. This Agreement shall become
effective when duly executed and delivered by Larcan and LTTC. Larcan shall use
reasonable efforts to form LSI promptly and shall cause LSI to execute and
deliver this Agreement promptly after its formation.
6.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of laws thereof.
6.4. Captions. The Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first hereinabove
written.
LARCAN INC.
By _____________________________
Name: _______________________
Title: ______________________
LARCAN SUB, INC.
By _____________________________
Name: _______________________
Title: ______________________
LARCAN TTC INC.
By _____________________________
Name: _______________________
Title: ______________________
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<PAGE>
ANNEX B
The name, office, address and present principal occupation or employment of
each executive officer and director of Larcan is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
P. Clyde Turner Chairman of the Board 228 Ambassador Drive
of Larcan Mississauga, Ontario
CANADA L5T 2J2
James D. Adamson Director and President 228 Ambassador Drive
of Larcan Mississauga, Ontario
CANADA L5T 2J2
Paul A. Dickie Director and Senior Vice 514 Chartwell Road
President of Larcan P.O. Box 880
President of LRE Oakville, Ontario
CANADA L6J 5C5
John E. Tremblay Vice President, Engineering 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Ronald E. Comforth Vice President, Manufacturing 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Stan Maruno Vice President, Sales and 228 Ambassador Drive
Marketing Mississauga, Ontario
CANADA L5T 2J2
Michael P. Gagnon Vice President, Customer 228 Ambassador Drive
Services and Treasurer Mississauga, Ontario
CANADA L5T 2J2
Nancy E. McGee Director and Assistant 514 Chartwell Road
Treasurer of Larcan P.O. Box 880
Senior Vice President, Oakville, Ontario
Chief Financial Officer CANADA L6J 5C5
and Treasurer of LRE
Thomas F. Byrne Director of Larcan 8 King Street East
Secretary of both Larcan Suite 1600
and LRE Toronto, Ontario
Partner in the law firm CANADA M5C 1B5
of Byrne, Crosby
<PAGE>
Constance L. Crosby Assistant Secretary of Larcan 8 King Street East
Partner in the law firm of Suite 1600
Byrne, Crosby Toronto, Ontario
CANADA M5C 1B5
George E. Patton Director of Larcan 514 Chartwell Road
Chairman of the Board and P.O. Box 80
Chief Executive Officer Oakville, Ontario
of LRE CANADA L6J 5C5
The name, address and present principal occupation or employment of each
executive officer and director of LARCAN-TTC is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
Paul A. Dickie Chairman of the Board 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
Nancy E. McGee Director 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
G. James Wilson Director and President 650 South Taylor Avenue
of LARCAN-TTC Louisville, CO 80027
James D. Adamson Director and Vice President 228 Ambassador Drive
of LARCAN-TTC Mississauga, Ontario
CANADA L5T 2J2
Byron W. St. Clair Director 650 South Taylor Avenue
Louisville, CO 80027
Dirk B. Freeman Director and Assistant 650 South Taylor Avenue
Secretary Louisville, CO 80027
David Hale Vice President, Operations 650 South Taylor Avenue
Louisville, CO 80027
Ronald M. Eve Secretary and Controller 650 South Taylor Avenue
Louisville, CO 80027
Michael P. Gagnon Treasurer 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
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<PAGE>
The name, office, address and present principal occupation or employment of
each executive officer and director of LSI is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
James D. Adamson Director and President 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Paul A. Dickie Director and Chairman 514 Chartwell Road
of the Board P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
Nancy E. McGee Director and Vice President 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
G. James Wilson Director 650 South Taylor Avenue
Louisville, CO 80027
Michael P. Gagnon Treasurer 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
Thomas F. Byrne Secretary 8 King Street East
Suite 1600
Toronto, Ontario
CANADA M5C 1B5
The name, office, address and present principal occupation or employment of
each executive officer and director of the Surviving Corporation is:
Office and Principal Residential or
Name Occupation Business Address
---- ---------- ----------------
Paul A. Dickie Director and Chairman 514 Chartwell Road
of the Board P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
Nancy E. McGee Director 514 Chartwell Road
P.O. Box 880
Oakville, Ontario
CANADA L6J 5C5
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<PAGE>
G. James Wilson Director and President 650 South Taylor Avenue
Louisville, CO 80027
James D. Adamson Director and Vice President 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
David Hale Vice President 650 South Taylor Avenue
Louisville, CO 80027
Ronald M. Eve Secretary 650 South Taylor Avenue
Louisville, CO 80027
Michael P. Gagnon Treasurer 228 Ambassador Drive
Mississauga, Ontario
CANADA L5T 2J2
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