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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 13, 1999
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REMEC, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
California 0-27414 95-3814301
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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9404 Chesapeake Drive, San Diego, California 92123
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 560-1301
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
LETTER OF INTENT TO ACQUIRE STM WIRELESS
On April 13, 1999, REMEC, Inc. ("REMEC") signed a letter of intent with STM
Wireless, Inc. ("STM"). The letter of intent outlines the basis for proceeding
with due diligence and documentation of a possible merger of STM with REMEC or a
subsidiary of REMEC. The merger is subject to the preparation and execution of
a definitive merger agreement, final approval of the board of directors of STM
and REMEC, approval by STM stockholders and other customary terms and
conditions. No assurances can be given that the merger will be completed.
A copy of the letter of intent and REMEC's press release relating to the
letter of intent are attached to this Current Report on Form 8-K as Exhibits
99.1 and 99.2, respectively. The foregoing description of the letter of intent
and the possible transaction described therein are qualified in their entirety
by reference to the full text of the letter of intent.
CLASS ACTION LAWSUIT
On April 19,1999, a class action lawsuit was filed against REMEC, certain
of its officers and directors and the investment bankers who served as co-lead
underwriters in REMEC's February 1998 public offering. The lawsuit was filed by
the law firm Milberg Weiss Bershad Hynes & Lerach and two of its co-counsel in
the United States District Court for the Southern District of California as
counsel for Charles Vezzetti and all others similarly situated. The lawsuit
alleges violations of the Securities Exchange Act of 1934 by REMEC and the other
defendants between December 1, 1997 and June 12, 1998.
REMEC believes the lawsuit is totally without merit and it plans to mount a
vigorous defense.
A copy of REMEC's press release relating to the lawsuit is attached to this
Current Report on Form 8-K as Exhibit 99.3.
2
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No. Description
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99.1 Letter of Intent, dated April 13, 1999, between
REMEC, Inc. and STM Wireless, Inc.
99.2 REMEC, Inc. Press Release, dated April 14, 1999
99.3 REMEC, Inc. Press Release, dated April 20, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned, thereunto duly authorized, on April 22, 1999.
REMEC, INC.
By: /s/ MICHAEL McDONALD
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Michael McDonald
Senior Vice President,
Chief Financial Officer and Secretary
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EXHIBIT INDEX
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Exhibit No. Description
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99.1 Letter of Intent dated April 13, 1999, between REMEC, Inc. and STM
Wireless, Inc.
99.2 REMEC, Inc. Press Release dated April 14, 1999
99.3 REMEC, Inc. Press Release dated April 20, 1999
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Exhibit 99.1
April 13, 1999
CONFIDENTIAL
Mr. Frank T. Connors
President
STM Wireless, Inc.
One Mauchly
Irvine, California 92718
LETTER OF INTENT RE PROPOSED MERGER
Dear Frank:
This letter sets forth our mutual understanding with respect to the
proposed acquisition by REMEC, Inc. ("REMEC") of STM Wireless, Inc. ("STM"). If
STM is prepared to go forward on the terms outlined in this letter, please
countersign the letter below, after which we will proceed to finalizing our due
diligence and the definitive documentation.
1. THE MERGER TRANSACTION. On the conditions set forth below, REMEC or a
subsidiary of REMEC would merge with STM (the "Merger"). In the Merger, the
current shareholders of STM would receive Common Stock of REMEC in exchange for
their shares of Common Stock of STM based on the exchange ratio described below.
2. EXCHANGE RATIO. Upon consummation of the Merger, each 3.8 shares of
STM Common Stock owned by a STM shareholder will be converted into the right to
receive one (1) share of Common Stock of REMEC (the "Exchange Ratio"). All
outstanding securities of STM that are convertible into STM Common Stock will be
convertible into REMEC Common Stock after adjustment in number of shares
issuable and exercise price to account for the Exchange Ratio and will be
otherwise convertible post-Merger in accordance with the existing terms of such
convertible securities of STM.
3. TERMS AND CONDITIONS. Based on our preliminary review of STM, in
addition to customary terms and conditions, it is anticipated that the
definitive Merger agreement will contain the following terms and conditions:
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(a) REMEC and STM will have received all required regulatory
approvals and material third party consents, in each case without the
imposition of any condition reasonably unacceptable to either party.
(b) The respective Boards of Directors of REMEC and STM will
have approved a definitive agreement as soon as is reasonably practicable.
(c) The shareholders of STM will have approved the Merger on the
terms set forth in the definitive Merger agreement as soon as reasonably
practicable.
(d) REMEC will have received a favorable tax opinion or other
comfort to its reasonable satisfaction to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, and (ii) the Merger will accounted for as a
pooling of interests.
(e) STM will have received an opinion of its financial adviser
to the effect that the Merger is fair from a financial point of view to its
shareholders.
4. SHAREHOLDERS' AGREEMENTS. Concurrently with the execution of this
letter or as soon as is reasonably practicable thereafter, REMEC will have
received written voting agreements from the significant shareholders of STM
listed below that such shareholders will (i) vote all of their shares of STM
capital stock in favor of the Merger, (ii) agree not to sell or agree to sell
such shares of capital stock to any other person prior to the anticipated date
of the Merger other than in connection with a transaction that is subject to the
exception set forth in paragraph 5 below and (iii) agree to comply with all
applicable securities laws (or laws or regulations governing the anticipated tax
and accounting treatment of the Merger) in connection with any post-Merger
disposition of securities of REMEC to be received in the Merger, including any
requirements reasonably necessary to ensure that the Merger is accounted for as
a pooling of interests. The significant shareholders who will sign voting
agreements are: (a) Emil Youssefzadeh; and (b) Pequot Capital Management, Inc.
5. EXCLUSIVE NEGOTIATIONS. After acceptance of this letter and until the
termination of this letter as provided in paragraph 11, STM shall not solicit
any offer or engage in any negotiations other than with REMEC for the merger or
sale of the business or assets of STM or any material part thereof or for any
tender or exchange offer for STM's capital stock, except to the extent that
independent legal counsel to STM has advised the Board of Directors of STM that
the failure to pursue an unsolicited offer received by STM is reasonably likely
to result in a breach of the directors' fiduciary duties.
99.1 - 2
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6. CONDUCT OF BUSINESS. Until the termination of this letter as provided
in paragraph 11, STM will conduct its business only in the ordinary course and
consistent with past practices and will maintain its books and records in
accordance with past practices.
7 ACCESS. Until termination of this letter as specified in paragraph
11, REMEC and its representatives will have access at reasonable times to the
properties, books and records and management of, and consultants to, STM for
purposes of conducting such due diligence, investigations or audits as REMEC
deems necessary or advisable in the circumstances. Until termination of this
letter as specified in paragraph 11, STM and its representatives will have
access at reasonable times to the properties, books and records and management
of, and consultants to, REMEC for purposes of conducting such due diligence,
investigations or audits as STM deems necessary or advisable in the
circumstances.
8. PUBLICITY. Neither party shall issue any press release, publicity
statement or other public notice relating to the proposed Merger or this letter
without the prior consent of the other party unless required under applicable
securities laws. Notwithstanding the foregoing, concurrently herewith, the
parties have agreed to a mutual press release regarding this letter.
9. NO FINDER'S FEES. After the date of this letter and though
termination of this letter as specified in paragraph 11, each party will not
engage or authorize nor pay any broker, financial advisor, investment banking
firm, finder or similar agent who would be entitled to a commission or other fee
in respect of the proposed Merger or any other similar transaction involving
either party, except for any fee payable upon issuance of a fairness opinion or
any fee payable by STM to CIBC Oppenheimer. At completion of the Merger,
neither party shall be obligated to pay any broker, financial advisor,
investment banking firm, finder or similar agent a commission or other fee in
respect of the proposed Merger or any other similar transaction involving either
party, except for any fee payable upon issuance of a fairness opinion or any fee
payable by STM to CIBC Oppenheimer.
10. NOT AN OFFER OF SECURITIES TO SHAREHOLDERS. This letter is not
intended as an offer to shareholders of STM. Any offer and sale of any
securities of REMEC in connection with the Merger will be made only after
satisfaction of applicable state and federal securities laws.
99.1 - 3
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11. EFFECT OF LETTER; ENFORCEABILITY; TERM. Except as provided in this
paragraph 11, this letter is not intended to be, and does not constitute, a
binding or enforceable agreement, but is merely an outline of intention to enter
into, and consummate, the Merger, and to facilitate the negotiation and
preparation of a definitive agreement and related documents. Notwithstanding
the preceding sentence, if and when this letter is countersigned by STM, the
provisions set forth in paragraphs 5 through 9 shall constitute a binding and
enforceable agreement between REMEC and STM relating to the matters addressed in
those paragraphs, enforceable against each party in accordance with the terms
contained in those paragraphs. This letter, unless extended by mutual agreement,
shall terminate at midnight on May 5, 1999 or earlier upon the execution of a
definitive Merger agreement.
If this letter is satisfactory to you as a basis for proceeding toward a
definitive agreement, please so signify by countersigning this letter below and
send an executed copy to the undersigned by facsimile (fax no. 619 560-4512).
If you have any additional questions, please telephone the undersigned at (619)
505-3114.
REMEC, INC.
By /s/ RONALD E. RAGLAND
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Ronald E. Ragland
Chairman and Chief Executive Officer
AGREED AND ACCEPTED:
STM WIRELESS, INC.
By /s/ FRANK T. CONNORS Date: April 13, 1999
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Frank T. Connors
President
99.1 - 4
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Exhibit 99.2
FOR IMMEDIATE RELEASE
REMEC, INC. ANNOUNCES INTENT
TO ACQUIRE STM WIRELESS, INC.
SAN DIEGO, CA -- April 14, 1999 -- REMEC, Inc. (Nasdaq: REMC) today announced
that it had entered into a letter of intent with STM Wireless, Inc. which
provides for the merger of STM with REMEC or a subsidiary of REMEC. The merger
will be structured as a tax-free, pooling of interests transaction. Each
stockholder of STM will receive one share of REMEC common stock for every 3.8
shares of STM common stock currently owned by the stockholder.
The transaction is subject to the preparation and execution of a definitive
merger agreement, final approval of the board of directors of STM and REMEC,
approval by STM stockholders and other customary terms and conditions. The
parties intend to proceed to a definitive merger agreement as soon as
practicable.
Emil Youssefzadeh, Chief Executive Officer of STM, commented "We have been
working closely with REMEC for over three years. They are responsible for the
implementation and manufacture of our innovative SpaceWeb and SpacePhone
terminals. We believe that the melding of our international communications
market presence, product concepts and systems capability with the design and
manufacturing prowess of REMEC and its strong financial resources will allow STM
to reach its full potential."
Commenting on the proposed merger, Ronald Ragland, REMEC's Chairman and Chief
Executive Officer, said "The merging of REMEC and STM is a further step in our
strategy to vertically integrate our capabilities to the systems and product
level. We expect to achieve substantial synergies in the combination of our
talented teams."
REMEC is a leader in the design and manufacture of microwave multi-function
modules for microwave transmission systems used in the commercial wireless
telecommunications market and defense applications.
CONTACT: Michael McDonald of REMEC, Inc., 619 560-1301
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Exhibit 99.3
FOR IMMEDIATE RELEASE
REMEC, Inc. Announcement
SAN DIEGO, CA -- April 20, 1999 -- REMEC, Inc. (Nasdaq: REMC) announced
that it and certain of its officers and directors, and the investment bankers
who served as co-lead underwriters of REMEC's February, 1998 secondary
offering, were sued by the law firm of Milberg Weiss Bershad Hynes & Lerach
LLP and two of its co-counsel, in the United States District Court for the
Southern District of California on April 19,1999, as counsel for a Charles
Vezzetti himself and all others similarly situated, alleging violations of the
Securities Exchange Act of 1934 between December 1, 1997 and June 12, 1998.
Ronald E. Ragland, REMEC's Chairman and Chief Executive Officer stated,
"This lawsuit is totally without merit and REMEC and the other defendants will
mount a vigorous defense."
REMEC is a leader in the design and manufacture of microwave
multi-function modules for microwave transmissions systems used in defense
applications and the commercial wireless telecommunications market.
Certain statements in this press release may constitute "forward-looking
statements" which are subject to known and unknown risks and uncertainties
including, among other things, certain economic conditions, competition,
development factors and operating costs that may cause the actual results to
differ materially from results implied by such forward-looking statements.
CONTACT: Michael McDonald of REMEC, Inc., 619 560-1301
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