SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
--------------------------------------
LXE Inc.
(Name of Subject Company)
--------------------------------------
LXE Inc.
(Name of Person Filing Statement)
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Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
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502465 10 7
(CUSIP Number of Class of Securities)
--------------------------------------
William F. Evans
Chairman of Special Committee
of Board of Directors of LXE Inc.
c/o ProSource Distribution Service
550 Biltmore Way, 10th Floor
Coral Gables, Florida 33134
(305) 529-2555
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of the Subject
Company)
With a copy to:
Charles E. Wilson, Esq.
Hicks, Maloof & Campbell,
A Professional Corporation
Suite 2200, Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303-1234
(404) 588-1100
ITEM 1. SECURITY AND SUBJECT COMPANY
The name of the subject company is LXE Inc. ("LXE"). The
address of LXE's principal executive offices is 303 Research Drive,
Norcross, Georgia 30092. The class of equity securities to which
this statement relates are the shares of common stock, par value
$.01 per share, of LXE.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the tender offer by Electromagnetic
Sciences, Inc. ("ELMG"), a corporation organized under the laws of
the State of Georgia, to exchange shares of common stock, par value
$.10 per share, of ELMG (the "ELMG Shares") for all outstanding
shares of common stock, par value $.01 per share, of LXE (the "LXE
Shares") not already owned by ELMG at an exchange ratio of .75 ELMG
Shares for each LXE Share. The tender offer is upon the terms and
subject to the conditions set forth in ELMG's Offering
Circular/Prospectus dated November 27, 1996 (the "Exchange Offer").
The address of the principal executive offices of ELMG is 660
Engineering Drive, Norcross, Georgia 30092.
ELMG has filed a Form S-4 Registration Statement with the
Securities and Exchange Commission registering the ELMG Shares to
be exchanged in the Exchange Offer. ELMG also filed a Schedule
14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the
Securities Exchange Act of 1934 (the "Schedule 14D-1") with the
Securities and Exchange Commission on November 27, 1996. According
to the Exchange Offer, and as set forth in the Schedule 14D-1, ELMG
is making the Exchange Offer for the purpose of acquiring at least
ninety percent (90%) of the outstanding LXE Shares and then
consummating a "short-form" merger under the laws of the State of
Georgia. As set forth in the Exchange Offer -- The Exchange Offer
- -- Certain Conditions of the Exchange Offer, the Exchange Offer is
subject to the condition, which cannot be waived, that a sufficient
number of shares be tendered in the Exchange offer, and not
withdrawn, as shall, upon acceptance thereof, increase ELMG's
ownership of LXE Shares to at least ninety percent (90%) of the LXE
Shares then outstanding. Once ELMG acquires at least ninety
percent (90%) of the LXE Shares, ELMG may effect the short-form
merger under the laws of the State of Georgia without any action
whatsoever by the Board of Directors of LXE (the "LXE Board") or
the affirmative vote of any other LXE shareholder. As set forth in
the Exchange Offer and the Schedule 14D-1, ELMG has indicated that
LXE will be merged with a newly created subsidiary of ELMG and will
become a wholly-owned subsidiary of ELMG (the "Merger"). As set
forth in the Exchange Offer -- Lack of Dissenters' Rights of LXE
and ELMG Shareholders, ELMG has indicated that holders of LXE
Shares would not be entitled to dissenters' rights under Georgia
law in connection with the Exchange Offer or Merger and that ELMG
does not intend to accord dissenters' rights to holders of LXE
Shares. ELMG has also indicated that the remaining LXE Shares held
by minority LXE shareholders would be exchanged for ELMG Shares in
the Merger at the same ratio as in the Exchange Offer.
As set forth in the Exchange Offer -- The Exchange Offer --
Certain Conditions of the Exchange Offer, the Exchange Offer is
also subject to the condition, which cannot be waived, that the
issuance of ELMG Shares, to be exchanged for LXE Shares, must be
approved by ELMG shareholders.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of LXE, which is the
subject company and the person filing this statement, are set forth
in Item 1 above.
(b) The information set forth in the Exchange Offer --
Certain Relationships and Related Transactions and in Items 3, 6,
and 7 of the Schedule 14D-1 of ELMG is incorporated herein by
reference. Except as set forth below and in the material
incorporated herein by reference, to the knowledge of LXE, there
are no material contracts, agreements, arrangements or
understandings, or actual or potential conflicts of interest,
between LXE and its affiliates and either (1) LXE's executive
officers, directors, or affiliates or (2) ELMG or its executive
officers, directors, or affiliates.
(1) ELMG's Ownership of LXE and Interlocking Boards of
Directors. As of October 11, 1996, ELMG owned approximately
4,543,074 LXE Shares, or approximately 81.5% of the 5,574,518
outstanding LXE Shares. Because of its majority ownership, ELMG is
in the position to elect all of the members of the LXE Board. As
set forth in the Exchange Offer -- Summary -- The Exchange Offer,
ELMG has indicated that if the Merger is consummated, it is
unlikely that the LXE Board would continue to include persons who
are not employed or otherwise affiliated with ELMG.
Several executive officers and directors of LXE are presently
executive officers or directors of ELMG. Thomas E. Sharon, the
Chairman of the Board and Chief Executive Officer of LXE, is the
President and Chief Executive Officer of ELMG. John E. Pippin, a
member of the LXE Board, is the Chairman of the Board of Directors
of ELMG ("the ELMG Board"). Don T. Scartz, the Chief Financial
Officer and Treasurer of LXE, is the Senior Vice President and
Chief Financial Officer, Treasurer and a member of the ELMG Board.
William S. Jacobs, the Secretary and General Counsel of LXE, is
Vice President, Secretary and General Counsel of ELMG. John B.
Mowell is a member of both the LXE Board and the ELMG Board.
In response to the actual or potential conflict of interest
between LXE and several of its executive officers and directors,
the LXE Board, on August 1, 1996, established a special committee
of presently independent directors (the "LXE Special Committee")
for the purpose of being in a position to respond to any proposed
transaction with respect to ELMG. The LXE Special Committee
consists of the following members of the LXE Board: William F.
Evans; W. Frank Blount; and Francis X. Stankard. Although William
F. Evans was formerly employed as a Senior Vice President of ELMG
and formerly served on the Board of Directors of ELMG, Mr. Evans is
not presently an officer or director of ELMG. After ELMG issued a
press release announcing the proposed Exchange Offer, the LXE
Board, on October 24, 1996, delegated to the LXE Special Committee
the authority to respond to the Exchange Offer, to discharge the
LXE Board's responsibilities and obligations under the rules of the
Securities and Exchange Commission arising from the Exchange Offer,
and to determine and communicate the LXE Board's position with
respect to the Exchange Offer.
(2) Stock Ownership and Stock Options of LXE Board of
Directors. Certain executive officers and directors of LXE,
including certain members of the LXE Special Committee, currently
own LXE Shares and/or ELMG Shares. In addition, certain executive
officers and directors of LXE, including the members of the LXE
Special Committee, have options to acquire LXE Shares ("LXE
Options") and in certain cases options to acquire ELMG Shares
("ELMG Options"). As set forth in the Exchange Offer -- The
Exchange Offer -- Conversion of LXE Options, ELMG has indicated
that all LXE Options will be converted into options to acquire .75
ELMG Shares for each LXE Share under option.
The table below sets forth certain information, as of November
27, 1996 regarding the ownership of LXE Shares and LXE Options by
each of LXE's directors and named executive officers.
Approximate
Name LXE Shares LXE Options Percent of Class
- ----- ---------- ----------- ----------------
W. Frank Blount --- 10,000 .2
William F. Evans 1,000 10,000 .2
Francis X. Stankard --- 10,000 .2
John J. Farrell --- 20,000 .3
John B. Mowell 5,000 15,900 .4
John E. Pippin 18,810 95,400 2.0
Thomas E. Sharon 7,326 40,893 .8
William J. Roeder --- 43,225 .8
The table below sets forth certain information, as of
November 27, 1996, regarding the ownership of ELMG Shares and
ELMG Options by each of LXE's directors and named executive
officers.
Approximate
Name ELMG Shares ELMG Options Percent of Class
- ------ ----------- ------------ ----------------
W. Frank Blount --- --- ---
William F. Evans 2,266 782 .04
Francis X. Stankard --- --- ---
John J. Farrell --- 26,000 .3
John B. Mowell 20,002 10,782 .4
John E. Pippin 151,253 58,847 2.6
Thomas E. Sharon 42,313 109,916 1.9
William J. Roeder 322 4,700 .06
(3) Employee Benefit Plans. As set forth in more
detail in the Exchange Offer -- Certain Relationships and Related
Transactions, which is incorporated herein by reference, LXE
personnel participate in several employee benefit plans
maintained by ELMG. First, LXE personnel participate in a
defined-contribution retirement plan maintained by ELMG and under
which annual contributions are determined from year to year by
the ELMG Board. LXE personnel also participate in group health
plans maintained by ELMG. LXE personnel are also eligible to
participate in the stock purchase and 401(k) savings plans
maintained by ELMG.
(4) Payment of Expenses. ELMG has agreed to pay, or
reimburse LXE for, the expenses the LXE Special Committee incurs
in responding to the Exchange Offer, including fees for
independent investment bankers and legal counsel retained by the
LXE Special Committee and expenses for printing and distribution
of the Schedule 14D-9.
ITEM 4. THE SOLICITATION AND RECOMMENDATION
(a) Position of the Board of Directors
At a meeting of the LXE Special Committee held on December
2, 1996, the LXE Special Committee carefully considered the
Exchange Offer. The LXE Special Committee, acting with full
authority on behalf of the LXE Board, has unanimously decided to
recommend that the shareholders of LXE accept the Exchange Offer
and tender their LXE Shares to ELMG pursuant to the Exchange
Offer.
(b) Background and Reasons for the Position
(1) Background. As indicated in Item 3(b) above, the
LXE Board, on October 24, 1996, delegated to the LXE Special
Committee full authority to determine LXE's response to the
Exchange Offer and to prepare this Schedule 14D-9. On October
18, 1996, a meeting of the LXE Special Committee was held
telephonically to discuss the proposed exchange offer announced
by ELMG on October 3, 1996. Also participating in this
telephonic meeting were William S. Jacobs, Secretary and General
Counsel of both ELMG and LXE, and Charles E. Wilson of Hicks,
Maloof & Campbell, legal counsel for the LXE Special Committee.
At this meeting, Mr. Jacobs outlined the proposed exchange offer
and the tentative timetable for the transaction as anticipated by
ELMG. After Mr. Jacobs excused himself from the meeting, the LXE
Special Committee reviewed and discussed the Exchange Offer and
discussed the possibility of retaining an independent financial
advisor to assist the LXE Special Committee in reviewing the
Exchange Offer.
On November 12, 1996, the LXE Special Committee, and its
independent legal counsel, met with certain officers of ELMG,
specifically Thomas E. Sharon, Don T. Scartz, and William S.
Jacobs, for a presentation by ELMG of the information relied upon
by ELMG in setting the proposed exchange ratio in the Exchange
Offer. This meeting was also attended by financial advisors from
The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey") at the
request of the LXE Special Committee. At this time, the
representatives of ELMG informed the LXE Special Committee that
ELMG had retained the firm of Oppenheimer & Co., Inc.
("Oppenheimer") to provide financial advice in connection with
the Exchange Offer but that Oppenheimer had not been asked to
render a fairness opinion to the ELMG Board. The representatives
of ELMG further informed the LXE Special Committee that ELMG
anticipated that it needed approximately an additional 470,000
LXE Shares to acquire a ninety percent (90%) interest in LXE and
to effect the Merger. Finally, the representatives of ELMG
informed the LXE Special Committee that Kopp Investment Advisors,
Inc., which beneficially owned 310,000 LXE Shares, or
approximately 5.4% of all outstanding LXE Shares, at that time,
had indicated its current intent to tender its LXE Shares in the
Exchange Offer.
On November 13, 1996, the LXE Special Committee met with
representatives of Robinson-Humphrey to discuss proposals for
reviewing the Exchange Offer. At that time, the LXE Special
Committee engaged Robinson-Humphrey to render independent
assistance to the LXE Special Committee in connection with the
Exchange Offer. Robinson-Humphrey has not been requested to
render, and has not rendered, an opinion as to the fairness of
the Exchange Offer, from a financial point of view or otherwise,
to either ELMG shareholders or LXE shareholders, and Robinson-Humphrey
makes no recommendation as to whether LXE shareholders
should tender their LXE Shares to ELMG pursuant to the Exchange
Offer.
On December 2, 1996, the LXE Special Committee met again
with representatives of Robinson-Humphrey to review the
information prepared by Robinson-Humphrey in connection with the
Exchange Offer. The assistance provided by Robinson-Humphrey as
to various financial considerations included, but was not limited
to (a) a review of the industry and the competitive climate in
which LXE operates, and its competitive position therein, (b) a
review of the business, historical financial performance and
prospects of LXE and ELMG, (c) a review of the historical and
current market prices and trading patterns of the LXE Shares and
ELMG Shares, (d) the offer price for the shares in relation to
the market prices of securities of, and financial data of, other
companies engaged in similar businesses as LXE, (e) a review and
analysis of prices and premiums paid in, and other terms of,
other comparable recent acquisition transactions, and (f) a
discounted cash flow analysis of LXE. The following is not a
complete description of the analyses performed by Robinson-Humphrey
and furnished to the LXE Special Committee. Rather, it
is intended to describe generally the analytical approaches
utilized by Robinson-Humphrey, and to provide additional
information concerning those approaches that were believed by
Robinson-Humphrey to be most relevant to the LXE Special
Committee.
Analysis of LXE
Valuation Summary of Selected Comparable Publicly-Traded
Companies. Robinson-Humphrey reviewed and compared certain
financial, operating and stock market information of LXE and
related publicly traded companies in the mobile systems and
automatic identification industries. Selected companies analyzed
included Eltron International, Inc., Metrologic Instruments,
Inc., Norand Corporation, Percon, Inc., PSC, Inc., Symbol
Technologies, Inc., Teklogix International, Inc., Telxon
Corporation, Trident International, Inc., Western Atlas, Inc. and
Zebra Technologies Corporation (the "LXE Comparable Companies").
Robinson-Humphrey examined and compared various valuation methods
and calculated various financial multiples. The multiples of LXE
were calculated using ELMG's effective offer price of $16.03 on
December 2, 1996, which was ELMG's closing price on that day of
$21.38 times the exchange ratio of .75. The multiples for LXE
were based on historical and projected operating data provided by
LXE's management, and the multiples for each of the LXE
Comparable Companies were based on the most recently publicly
available information, together with corresponding projected
operating data provided by independent research analysts. The
multiples were as follows: (i) For LXE, Calendar 1996 and 1997
estimates for the price to earnings ratio (which ratio was based
on calendarized analysts estimates) of 66.8x and 24.7x,
respectively, compared to averages for the LXE Comparable
Companies of 23.2x and 16.8x, respectively; and (ii) LTM (last
twelve months) Firm Value to Sales of 1.6x for LXE, compared to
the average for the LXE Comparable Companies of 1.5x.
Comparable Merger and Acquisition Transaction Analysis.
Robinson-Humphrey reviewed and compared the consideration paid in
selected mergers and acquisitions transactions in the mobile
systems, automatic identification and other related industries
since 1993 (the "Selected Mergers and Acquisitions") with the
Exchange Offer in relation to certain financial data for LXE.
Robinson-Humphrey also presented a summary of historical
acquisition activity over a five year period without regard to
industry group (the "Overall Historical Acquisition Activity
Analysis"), segmented by purchase price dollar value, method of
payment, sellers' stock price and sellers' price to earnings
ratio. Such review indicated that for these Selected Mergers and
Acquisitions, aggregate consideration as a multiple of LTM
earnings averaged 41.6x, enterprise value (the sum of the face
value of a company's debt plus the market value of its equity
securities less cash and cash equivalents) as a multiple of LTM
Sales averaged 2.4x, enterprise value as a multiple of LTM EBIT
averaged 16.7x and enterprise value as a multiple of LTM EBITDA
averaged 15.1x. Corresponding comparable consideration multiples
for LXE were 267.5x LTM earnings, 1.41x LTM Sales, 267.5x LTM
EBIT and 91.5x LTM EBITDA. The Overall Historical Acquisition
Activity Analysis indicated that acquisition premiums varied, but
generally ranged between 20% and 40%, comparable to a
corresponding premium of 49% for the Exchange Offer.
Discounted Cash Flow Analysis. Robinson-Humphrey performed
a discounted cash flow analysis using financial projections
prepared with the assistance of LXE's management. Using the
discounted cash flow analysis, Robinson-Humphrey estimated the
present value of the future cash flows set forth in these
projections. Robinson-Humphrey calculated a net present value of
free cash flows (defined as earnings before interest after taxes
plus depreciation and amortization less capital expenditures and
any increase in net working capital) for the years 1997 through
2001 using discount rates ranging from 12% to 20%. Robinson-Humphrey
calculated LXE's terminal values in the year 2001 based
on multiples ranging from 14x to 17x year 2001 projected EBIT, as
well as LXE's terminal values in the year 2001 based on multiples
ranging from 10x to 13x year 2001 projected EBITDA. The
discounted cash flow analysis yielded a range of derived equity
values for LXE of between approximately $50 million and $90
million with an average derived equity value of approximately $67
million. The Exchange Offer yields a corresponding equity value
of $89.4 million.
Minority Interest Buy Out Valuation Analysis. Robinson-Humphrey
prepared an analysis of the premiums paid in 35 pending
and completed minority buy-out transactions occurring since
January of 1992. Robinson-Humphrey considered, among other
factors, the structure (tender offer or merger) the consideration
(cash or stock) and the percentage of the target's shares held by
the acquirer at the time of announcement. This analysis revealed
that the average premiums paid in these transactions, as a
percentage of the acquired target corporations' stock price one
day, one week and four weeks prior to the announcement of these
transactions ranged from 22.5% to 30.7%, compared to a
corresponding premium of 49% for the Exchange Offer.
Analysis of ELMG
Valuation Summary of Selected Publicly Traded Companies.
Robinson-Humphrey reviewed and compared certain financial,
operating and stock market information of ELMG and related
publicly traded companies in the components, subsystems, systems
and wireless material handling industries. Selected companies
analyzed included RF Monolithics, Inc., Stanford
Telecommunications, Inc., Vari-L Company, Inc., California
Amplifier, Inc., Celeritek, Inc., Watkins-Johnson Company, Allen
Group Inc., P-COM, Inc., STM Wireless, Inc., Norand Corporation,
Symbol Technologies, Inc., and Teklogix International, Inc. (the
"ELMG Comparable Companies"). Robinson-Humphrey examined and
compared various valuation methods and calculated various
financial multiples. The multiples for ELMG were based on
historical and projected operating data provided by ELMG's
management, and the multiples for each of the ELMG Comparable
Companies were based on the most recently publicly available
information, together with corresponding projected operating data
provided by independent research analysts. The multiples were as
follows: (i) For ELMG, Calendar 1996 and 1997 estimates for the
price to earnings ratio (which was based on calendarized analysts
estimates) of 32.4x and 21.8x, respectively, compared to averages
for the ELMG Comparable Companies of 23.2x and 18.4x,
respectively; and (ii) LTM Sales of 1.2x for ELMG, compared to
the average for the ELMG Comparable Companies of 1.3x. The
analysis of the ratios of price per share to projected 1996 and
1997 EPS was believed by Robinson-Humphrey to be the more
important and widely accepted indicator of value.
Discounted Cash Flow Analysis. Robinson-Humphrey performed
a discounted cash flow analysis using financial projections
prepared with the assistance of ELMG's management. Using the
discounted cash flow analysis, Robinson-Humphrey estimated the
present value of the future cash flows set forth in these
projections. Robinson-Humphrey calculated a net present value of
free cash flows (defined as earnings before interest after taxes
plus depreciation and amortization less capital expenditures and
any increase in net working capital) for the years 1997 through
2001 using discount rates ranging from 12% to 20%. Robinson-Humphrey
calculated ELMG's terminal values in the year 2001 based
on multiples ranging from 13x to 16x year 2001 projected EBIT, as
well as ELMG's terminal values in the year 2001 based on
multiples ranging from 8x to 11x year 2001 projected EBITDA.
Recommendation
On December 2, 1996, following the presentation by
Robinson-Humphrey, the LXE Special Committee discussed the
Exchange Offer and unanimously decided to recommend that the
shareholders of LXE accept the Exchange Offer and tender their
LXE Shares to ELMG in accordance with the Exchange Offer.
(2) Reasons for Position. In deciding to recommend
acceptance of the Exchange Offer, the LXE Special Committee
considered a variety of factors and determined that the Exchange
Offer is in the best interests of LXE and the shareholders of
LXE. The LXE Special Committee did not find it practicable to,
nor did it, quantify or otherwise assign relative weight to the
specific factors considered in reaching its determination. Among
the factors considered by the LXE Special Committee were the
limited liquidity of LXE Shares and the limited number of market
makers for LXE Shares. LXE Shares are currently listed on the
NASDAQ exchange, which requires at least two market makers, and
the limited number of market makers for LXE Shares endangers the
listing status of such shares. The LXE Special Committee also
believes that the limited liquidity of LXE Shares and the limited
number of market makers is unlikely to change as long as ELMG
maintains a substantial majority interest in LXE. The LXE
Special Committee's recommendation is also based on the
competitive challenges faced by LXE and the LXE Special
Committee's view that LXE needs to obtain greater resources,
including financial, technical, production, and marketing
resources, to effectively compete in the market. In addition,
the LXE Special Committee's recommendation is based on the fact
that shareholders of LXE may, indirectly, continue to participate
in LXE's financial performance through their ownership of ELMG
Shares by tendering their LXE Shares in accordance with the
Exchange Offer. Moreover, as indicated above, LXE shareholders
may continue to participate in the growth of LXE without the
risks of limited liquidity and limited market makers and the
competitive pressures on LXE as a separate entity. Finally, the
LXE Special Commission's recommendation is based on the
independent review of the Exchange Offer performed by Robinson-Humphrey
and the fact that the effective price of $16.03 (ELMG's
closing price on December 2, 1996 of $21.38 times the exchange
ratio of .75) represented a premium of 49% over the closing price
for the shares on the NASDAQ Stock Market on October 2, 1996, the
day before ELMG disclosed publicly the proposed Exchange Offer.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
Neither LXE nor any person acting on its behalf has
retained, employed or compensated any person to make
solicitations or recommendations to LXE shareholders with respect
to the Exchange Offer. However, the LXE Special Committee has
retained the independent firm of Robinson-Humphrey to act as its
exclusive financial advisor with respect to the Exchange Offer.
The firm of Robinson-Humphrey has not been retained to issue a
fairness opinion with respect to the Exchange Offer but, rather,
has been retained for the purpose of assisting the LXE Special
Committee in understanding and evaluating the Exchange Offer.
The LXE Special Committee has agreed to pay Robinson-Humphrey a
fee of $100,000.00, of which $50,000.00 has already been paid,
for its services to the LXE Special Committee. The LXE Special
Committee has also retained the independent law firm of Hicks,
Maloof & Campbell, A Professional Corporation, to provide legal
assistance and advice in connection with the Exchange Offer. For
its services, Hicks, Maloof & Campbell will be paid a reasonable
and customary fee. As mentioned in Item 3(b) above, ELMG has
agreed to pay LXE's expenses in retaining independent investment
bankers and legal counsel for the LXE Special Committee.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
There have been no transactions in LXE Shares which were
effected during the past sixty (60) days by LXE or, to the best
of LXE's knowledge, any of its executive officers, directors,
affiliates, or subsidiaries.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) LXE is not engaged in any negotiations in response to
the Exchange Offer which relates to or would result in: (1) an
extraordinary transaction such as a merger or reorganization,
involving LXE or any subsidiary of LXE; (2) a purchase, sale or
transfer of a material amount of assets by LXE or any subsidiary
of LXE; (3) a tender offer for or other acquisition of securities
by or of LXE; or (4) any material change in the present
capitalization or dividend policy of LXE. As set forth in Item
4(b) above, the LXE Special Committee did meet telephonically
with William S. Jacobs on October 18, 1996, at which time Mr.
Jacobs reviewed the proposed Exchange Offer. The LXE Special
Committee also met with officers of ELMG on November 12, 1996, at
which time ELMG made a presentation of the information relied
upon by ELMG in setting the proposed exchange ratio in the
Exchange Offer.
As set forth in Item 2 above and in the Schedule 14D-1, the
Exchange Offer is subject to the condition, which cannot be
waived, that ELMG obtain at least ninety percent (90%) of the LXE
Shares so it may exercise its right to cause a short-form merger
between ELMG and LXE under the laws of the State of Georgia.
Under Georgia law, such merger would not require any action
whatsoever by the LXE Board or any affirmative action by any
other LXE shareholder.
(b) There are no transactions, board resolutions,
agreements in principle, or signed contracts in response to the
Exchange Offer, other than those described in Item 3(b) above,
which relates to or would result in one or more of the matters
referred to in Item 7(a)(1), (2), (3) or (4) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1. Offering Circular/Prospectus of
Electromagnetic Sciences, Inc., dated November 27, 1996
(previously filed with the Commission on November 27, 1996 as
Exhibit (a-1) to the Schedule 14D-1 Tender Offer Statement of
Electromagnetic Sciences, Inc., and incorporated herein by
reference)./*/
Exhibit 2. Schedule 14D-1 Tender Offer Statement of
Electromagnetic Sciences (previously filed with the Commission on
November 27, 1996 and incorporated herein by reference)./*/
Exhibit 3. LXE Inc. 1989 Stock Incentive Plan Stock
Option Agreement, dated July 26, 1991, between LXE Inc. and W.
Frank Blount./*/
Exhibit 4. LXE Inc. 1989 Stock Incentive Plan Stock
Option Agreement, dated July 26, 1991, between LXE Inc. and
Francis X. Stankard./*/
Exhibit 5. LXE Inc. 1989 Stock Incentive Plan Stock
Option Agreement, dated April 24, 1992, between LXE Inc. and
William F. Evans./*/
Exhibit 6. Electromagnetic Sciences, Inc. 1986
Directors' Stock Option Agreement, dated April 26, 1991, between
Electromagnetic Sciences, Inc. and William F. Evans./*/
- -----------
/*/ Not included in copies mailed to shareholders.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Date: December 10, 1996 LXE Inc.
-----------------
By: /s/ William F. Evans
----------------------
William F. Evans
Chairman of the Special
Committee of the Board
of Directors of LXE Inc.
EXHIBIT 3
7/26/91 - - New Directors
LXE Inc.
1989 Stock Incentive Plan
Stock Option Agreement
THIS STOCK OPTION AGREEMENT, entered into as of the 26th day
of July, 1991 (the "Date of Grant"), by and between LXE Inc., a
Georgia corporation (hereinafter referred to as the
"Corporation"), and W. Frank Blount (hereinafter referred to as
the "Director").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors (the "Board") of the
Corporation has adopted a stock incentive plan for directors,
officers and employees of the Corporation or its subsidiary
corporations, which Plan, as amended, is known as the "LXE Inc.
1989 Stock Incentive Plan" (hereinafter referred to as the
"Plan");
WHEREAS, on the Date of Grant the Director has been elected
to serve as a member of the Board, to whom the Corporation's
success is closely tied, and has agreed to so serve; and
WHEREAS, the Plan provides for the automatic grant, to each
new director who is not an employee of the Company or of any
parent or subsidiary of the Company, of a stock option to
purchase shares of the Corporation's common stock as hereinafter
set forth, and the Corporation and the Director desire to enter
into a written agreement with respect to such option in
accordance with the Plan.
NOW THEREFORE, as an incentive and to encourage stock
ownership, and in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Incorporation of Plan. This option is granted pursuant
to the provisions of the Plan and the terms and definitions of
the Plan, as it may be amended from time to time, are
incorporated herein by reference in this Stock Option Agreement
and made a part hereof. A copy of the Plan has been delivered
to, and receipt is hereby acknowledged by, the Director.
2. Grant of Option. Subject to the terms, restrictions,
limitations and conditions stated herein, the Corporation hereby
evidences its grant to the Director of the right and option
(hereinafter referred to as the "Option") to purchase all or any
part of an aggregate of Ten Thousand (10,000) shares of the
Corporation's $.01 par value common stock (the "Common Stock")
beginning as follows:
First Date Number of
Exercisable Shares
----------- ---------
January 26, 1992 3,333
January 26, 1993 3,333
January 26, 1994 3,334
This option shall expire and is not exercisable after 5:00 p.m.,
Atlanta time, on July 26, 1997 (the "Expiration Date"). This
option is not an incentive stock option as defined and
contemplated in Section 422 of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.
Notwithstanding the beginning date or dates for exercise set
forth in the preceding paragraph of this Section, but subject to
the provisions of such paragraph with respect to expiration of
this Option, this Option may be exercised as to all or any
portion of the full number of shares subject thereto if the
Corporation is registered under the Securities Exchange Act of
1934, as amended (the "Act"), and either (a) a tender offer of
exchange offer has been made for shares of the Common Stock,
other than one made by the Corporation or Electromagnetic
Sciences, Inc. ("EMS"), provided that the corporation, person or
other entity making such offer purchases or otherwise acquires
shares of Common Stock pursuant to such offer, or (b) any person
or group (as such terms are defined in Section 13(d)(3) of the
Act), other than EMS, becomes the holder of 50% or more of the
outstanding shares of Common Stock. If either of the events
specified in this paragraph have occurred, this Option shall be
fully exercisable: (x) in the event of (a) above, during the
period commencing on the date the tender offer or exchange offer
is commenced and ending on the date such offer expires and is not
extended; or (y) in the event of (b) above, during the 30-day
period commencing on the date upon which the Corporation is
provided a copy of a Schedule 13D or amendment thereto filed
pursuant to Section 13(d) of the Act and the rules and
regulations promulgated thereunder, indicating that any person or
group has become the holder of 50% or more of the outstanding
shares of Common Stock. In the case of (a) above, if the
corporation, person or other entity making the offer does not
purchase or otherwise acquire shares of Common Stock pursuant to
such offer, then the Director's right under this paragraph to
exercise this Option shall terminate, the Director and the
Corporation shall rescind any exercise of this Option pursuant to
this paragraph, and this Option shall be reinstated as if such
exercise had not occurred.
3. Purchase Price. The price per share to be paid by
the Director for the shares subject to this Option shall be
Thirteen and 75/100 Dollars ($13.75).
4. Exercise Terms. Beginning on the dates specified
above, and prior to the expiration of this Option as provided in
Section 2 hereof, the Director may exercise this Option as to all
such number of shares, or as to any part thereof, at any time and
from time to time during the remaining term of this Option;
provided that the Director must exercise this Option for at least
the lesser of 100 shares or the unexercised portion of this
Option. In the event this Option is not exercised with respect
to all or any part of the shares subject to this Option prior to
its expiration, the shares with respect to which this Option was
not exercised shall no longer be subject to this Option.
5. Option Non-Transferable. This Option and all rights
hereunder are neither assignable nor transferable by the Director
otherwise than by will or under the laws of descent and
distribution, and during the Director's lifetime this Option is
exercisable only by him (or by his guardian or legal
representative, should one be appointed). More particularly (but
without limiting the generality of the foregoing), this Option
may not be assigned, transferred (except as aforesaid), pledged
or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of this Option contrary to the
provisions hereof shall be null and void and without legal
effect.
6. Notice of Exercise of Option. This Option may be
exercised by the Director, or by his administrator, executor,
personal representative or qualified transferee, by a written
notice (in substantially the form of the "Notice of Exercise"
attached hereto as Exhibit A) signed by the Director, or by such
administrator, executor, personal representative or qualified
transferee, and delivered to the Corporation at its principal
office in Norcross, Georgia, to the attention of the Chief
Executive Officer, Treasurer, or such other officer as the
Corporation may designate. Any such notice shall (a) specify the
number of shares of Common Stock which the Director or such
administrator, executor, personal representative or qualified
transferee, as the case may be, then elects to purchase
hereunder, and (b) and accompanied by (i) a certified or
cashier's check payable to the Corporation, or personal check
acceptable to the Corporation, in payment of the total price
applicable to such shares as provided herein, or (ii) (subject to
any restrictions referred to in Exhibit A) shares of the Common
Stock, owned by him or her and duly endorsed or accompanied by
stock transfer powers, having a Fair Market Value equal to the
total purchase price applicable to such shares purchased
hereunder, or (iii) such a check, and the number of such shares
whose Fair Market Value when added to the amount of the check
equals the total purchase price applicable to such shares
purchased hereunder. Such notice shall also be accompanied by
such a check or shares of Common Stock in payment of applicable
withholding and employment taxes, or the person exercising this
Option shall authorize the withholding of shares of Common Stock
otherwise issuable under this Option in payment of such taxes,
all as set forth on Exhibit A and subject to any restrictions
referred to therein. Upon receipt of any such notice and
accompanying payments, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Director or to
his administrator, executor, personal representative or qualified
transferee, as the case may be, stock certificates for the number
of shares specified in such notice registered in the name of the
person exercising this Option.
7. Adjustment in Option. If prior to the complete
exercise of this Option, there shall be a change in the
outstanding Common Stock by reason of one or more stock splits,
stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustments, the number,
kind and option price of the shares remaining subject to this
Option shall be equitably adjusted in accordance with the terms
of the Plan, so that the proportionate interest in the
Corporation represented by the shares then subject to the Option
shall be the same as before the occurrence of such events.
8. Termination as a Director. If the Director for any
reason ceases to be a member of the Board of Directors of the
Corporation (such event being hereinafter referred to as a
"Termination"), then:
(a) To the extent this Option shall have become exercisable
on or prior to the date of Termination, it shall remain
exercisable until the Expiration Date; and
(b) Any portion of this Option that had not become
exercisable on or prior to the date of Termination shall
immediately terminate and shall not thereafter become
exercisable.
This Option does not confer upon the Director any right with
respect to continuance as a member of the Board of Directors of
the Corporation.
9. Binding Agreement. This Agreement shall be binding
upon the parties hereto and their representatives, successors and
assigns.
IN WITNESS WHEREOF, the Corporation has caused this Stock
Option Agreement to be executed on behalf of the Corporation and
the Corporation's seal to be affixed hereto and attested by the
Secretary of the Corporation, and the Director has executed this
Agreement under his seal, all as of the day and year first above
written.
LXE INC.
[CORPORATE SEAL]
ATTEST: BY: /s/
-----------------------------
Chief Executive Officer
/s/
- ------------------------ DIRECTOR:
Secretary
/s/
-------------------------(SEAL)
W. Frank Blount
EXHIBIT A
LXE INC.
1989 STOCK INCENTIVE PLAN
NOTICE OF EXERCISE
OF STOCK OPTION
The undersigned hereby notifies LXE Inc. (the "Corporation")
of his election to exercise his option to purchase [BLANK] shares
of the Corporation's common stock, $.01 par value (the Common
Stock"), pursuant to that Stock Option Agreement (the "Agreement")
between the undersigned and the Corporation dated July 26, 1991.
Accompanying this Notice is (1) a certified or a cashier's check
(or other check acceptable to the Corporation) in the amount of
$[BLANK] payable to the corporation, and/or (2) (subject to such
restrictions as may be determined to be necessary or appropriate
to avoid earnings charges or other adverse consequences to the
Corporation under applicable accounting or tax rules or
regulations) [BLANK] shares of the common Stock presently owned
by the undersigned and duly endorsed or accompanied by stock
transfer powers, having an aggregate Fair Market Value (as
defined in the LXE Inc. 1989 Stock Incentive Plan) on the date
hereof of $[BLANK], such amount being equal, in the aggregate, to
the purchase price per share set forth in Section 3 of the
Agreement multiplied by the number of shares being hereby
purchased (in each instance subject to appropriate adjustment
pursuant to Section 7 of the Agreement).
Also accompanying this Notice is my check in the amount of
$[BLANK], in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such
payment is based on advice received from appropriate officials of
the Corporation responsible for the administration of its payroll
and employment tax obligations. Alternatively, or in addition,
and subject to such restrictions as may be determined to be
necessary or appropriate to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, or to avoid earnings charges or
other adverse consequences to the Corporation under applicable
accounting or tax rules or regulations, in full or partial
payment of such taxes:
(1) I deliver herewith an additional [BLANK] shares of the
Common Stock presently owned by me, having an aggregate Fair
Market Value on the date hereof of $[BLANK]; and/or
(2) I hereby authorize the Corporation to withhold, from
the shares of Common Stock otherwise issuable to me pursuant
to this exercise, [BLANK] such shares having an aggregate
Fair Market Value on the date hereof of $[BLANK].
The sum of (i) any such check plus (ii) the Fair Market Value on
the date hereof of any shares of Common Stock specified in the
foregoing clauses (1) and (2) is not less than the amount of
federal and state withholding and employment taxes applicable to
this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a
result of such exercise.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal, this [BLANK] date of [BLANK], 199[BLANK].
DIRECTOR OR HIS ADMINISTRATOR, EXECUTOR, OR
PERSONAL REPRESENTATIVE
-------------------------------------------
EXHIBIT 4
7/26/91 - - New Directors
LXE Inc.
1989 Stock Incentive Plan
Stock Option Agreement
THIS STOCK OPTION AGREEMENT, entered into as of the 26th day
of July, 1991 (the "Date of Grant"), by and between LXE Inc., a
Georgia corporation (hereinafter referred to as the
"Corporation"), and Francis X. Stankard (hereinafter referred to
as the "Director").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors (the "Board") of the
Corporation has adopted a stock incentive plan for directors,
officers and employees of the Corporation or its subsidiary
corporations, which Plan, as amended, is known as the "LXE Inc.
1989 Stock Incentive Plan" (hereinafter referred to as the
"Plan");
WHEREAS, on the Date of Grant the Director has been elected
to serve as a member of the Board, to whom the Corporation's
success is closely tied, and has agreed to so serve; and
WHEREAS, the Plan provides for the automatic grant, to each
new director who is not an employee of the Company or of any
parent or subsidiary of the Company, of a stock option to
purchase shares of the Corporation's common stock as hereinafter
set forth, and the Corporation and the Director desire to enter
into a written agreement with respect to such option in
accordance with the Plan.
NOW THEREFORE, as an incentive and to encourage stock
ownership, and in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Incorporation of Plan. This option is granted pursuant
to the provisions of the Plan and the terms and definitions of
the Plan, as it may be amended from time to time, are
incorporated herein by reference in this Stock Option Agreement
and made a part hereof. A copy of the Plan has been delivered
to, and receipt is hereby acknowledged by, the Director.
2. Grant of Option. Subject to the terms, restrictions,
limitations and conditions stated herein, the Corporation hereby
evidences its grant to the Director of the right and option
(hereinafter referred to as the "Option") to purchase all or any
part of an aggregate of Ten Thousand (10,000) shares of the
Corporation's $.01 par value common stock (the "Common Stock")
beginning as follows:
First Date Number of
Exercisable Shares
----------- ---------
January 26, 1992 3,333
January 26, 1993 3,333
January 26, 1994 3,334
This option shall expire and is not exercisable after 5:00 p.m.,
Atlanta time, on July 26, 1997 (the "Expiration Date"). This
option is not an incentive stock option as defined and
contemplated in Section 422 of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.
Notwithstanding the beginning date or dates for exercise set
forth in the preceding paragraph of this Section, but subject to
the provisions of such paragraph with respect to expiration of
this Option, this Option may be exercised as to all or any
portion of the full number of shares subject thereto if the
Corporation is registered under the Securities Exchange Act of
1934, as amended (the "Act"), and either (a) a tender offer of
exchange offer has been made for shares of the Common Stock,
other than one made by the Corporation or Electromagnetic
Sciences, Inc. ("EMS"), provided that the corporation, person or
other entity making such offer purchases or otherwise acquires
shares of Common Stock pursuant to such offer, or (b) any person
or group (as such terms are defined in Section 13(d)(3) of the
Act), other than EMS, becomes the holder of 50% or more of the
outstanding shares of Common Stock. If either of the events
specified in this paragraph have occurred, this Option shall be
fully exercisable: (x) in the event of (a) above, during the
period commencing on the date the tender offer or exchange offer
is commenced and ending on the date such offer expires and is not
extended; or (y) in the event of (b) above, during the 30-day
period commencing on the date upon which the Corporation is
provided a copy of a Schedule 13D or amendment thereto filed
pursuant to Section 13(d) of the Act and the rules and
regulations promulgated thereunder, indicating that any person or
group has become the holder of 50% or more of the outstanding
shares of Common Stock. In the case of (a) above, if the
corporation, person or other entity making the offer does not
purchase or otherwise acquire shares of Common Stock pursuant to
such offer, then the Director's right under this paragraph to
exercise this Option shall terminate, the Director and the
Corporation shall rescind any exercise of this Option pursuant to
this paragraph, and this Option shall be reinstated as if such
exercise had not occurred.
3. Purchase Price. The price per share to be paid by
the Director for the shares subject to this Option shall be
Thirteen and 75/100 Dollars ($13.75).
4. Exercise Terms. Beginning on the dates specified
above, and prior to the expiration of this Option as provided in
Section 2 hereof, the Director may exercise this Option as to all
such number of shares, or as to any part thereof, at any time and
from time to time during the remaining term of this Option;
provided that the Director must exercise this Option for at least
the lesser of 100 shares or the unexercised portion of this
Option. In the event this Option is not exercised with respect
to all or any part of the shares subject to this Option prior to
its expiration, the shares with respect to which this Option was
not exercised shall no longer be subject to this Option.
5. Option Non-Transferable. This Option and all rights
hereunder are neither assignable nor transferable by the Director
otherwise than by will or under the laws of descent and
distribution, and during the Director's lifetime this Option is
exercisable only by him (or by his guardian or legal
representative, should one be appointed). More particularly (but
without limiting the generality of the foregoing), this Option
may not be assigned, transferred (except as aforesaid), pledged
or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of this Option contrary to the
provisions hereof shall be null and void and without legal
effect.
6. Notice of Exercise of Option. This Option may be
exercised by the Director, or by his administrator, executor,
personal representative or qualified transferee, by a written
notice (in substantially the form of the "Notice of Exercise"
attached hereto as Exhibit A) signed by the Director, or by such
administrator, executor, personal representative or qualified
transferee, and delivered to the Corporation at its principal
office in Norcross, Georgia, to the attention of the Chief
Executive Officer, Treasurer, or such other officer as the
Corporation may designate. Any such notice shall (a) specify the
number of shares of Common Stock which the Director or such
administrator, executor, personal representative or qualified
transferee, as the case may be, then elects to purchase
hereunder, and (b) and accompanied by (i) a certified or
cashier's check payable to the Corporation, or personal check
acceptable to the Corporation, in payment of the total price
applicable to such shares as provided herein, or (ii) (subject to
any restrictions referred to in Exhibit A) shares of the Common
Stock, owned by him or her and duly endorsed or accompanied by
stock transfer powers, having a Fair Market Value equal to the
total purchase price applicable to such shares purchased
hereunder, or (iii) such a check, and the number of such shares
whose Fair Market Value when added to the amount of the check
equals the total purchase price applicable to such shares
purchased hereunder. Such notice shall also be accompanied by
such a check or shares of Common Stock in payment of applicable
withholding and employment taxes, or the person exercising this
Option shall authorize the withholding of shares of Common Stock
otherwise issuable under this Option in payment of such taxes,
all as set forth on Exhibit A and subject to any restrictions
referred to therein. Upon receipt of any such notice and
accompanying payments, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Director or to
his administrator, executor, personal representative or qualified
transferee, as the case may be, stock certificates for the number
of shares specified in such notice registered in the name of the
person exercising this Option.
7. Adjustment in Option. If prior to the complete
exercise of this Option, there shall be a change in the
outstanding Common Stock by reason of one or more stock splits,
stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustments, the number,
kind and option price of the shares remaining subject to this
Option shall be equitably adjusted in accordance with the terms
of the Plan, so that the proportionate interest in the
Corporation represented by the shares then subject to the Option
shall be the same as before the occurrence of such events.
8. Termination as a Director. If the Director for any
reason ceases to be a member of the Board of Directors of the
Corporation (such event being hereinafter referred to as a
"Termination"), then:
(a) To the extent this Option shall have become exercisable
on or prior to the date of Termination, it shall remain
exercisable until the Expiration Date; and
(b) Any portion of this Option that had not become
exercisable on or prior to the date of Termination shall
immediately terminate and shall not thereafter become
exercisable.
This Option does not confer upon the Director any right with
respect to continuance as a member of the Board of Directors of
the Corporation.
9. Binding Agreement. This Agreement shall be binding
upon the parties hereto and their representatives, successors and
assigns.
IN WITNESS WHEREOF, the Corporation has caused this Stock
Option Agreement to be executed on behalf of the Corporation and
the Corporation's seal to be affixed hereto and attested by the
Secretary of the Corporation, and the Director has executed this
Agreement under his seal, all as of the day and year first above
written.
LXE INC.
[CORPORATE SEAL]
ATTEST: BY: /s/
-----------------------------
Chief Executive Officer
/s/
- ------------------------ DIRECTOR:
Secretary
/s/
-------------------------(SEAL)
Francis X. Standard
EXHIBIT A
LXE INC.
1989 STOCK INCENTIVE PLAN
NOTICE OF EXERCISE
OF STOCK OPTION
The undersigned hereby notifies LXE Inc. (the "Corporation")
of his election to exercise his option to purchase [BLANK] shares
of the Corporation's common stock, $.01 par value (the Common
Stock"), pursuant to that Stock Option Agreement (the "Agreement")
between the undersigned and the Corporation dated July 26, 1991.
Accompanying this Notice is (1) a certified or a cashier's check
(or other check acceptable to the Corporation) in the amount of
$[BLANK] payable to the Corporation, and/or (2) (subject to such
restrictions as may be determined to be necessary or appropriate
to avoid earnings charges or other adverse consequences to the
Corporation under applicable accounting or tax rules or
regulations) [BLANK] shares of the common Stock presently owned
by the undersigned and duly endorsed or accompanied by stock
transfer powers, having an aggregate Fair Market Value (as
defined in the LXE Inc. 1989 Stock Incentive Plan) on the date
hereof of $[BLANK], such amount being equal, in the aggregate, to
the purchase price per share set forth in Section 3 of the
Agreement multiplied by the number of shares being hereby
purchased (in each instance subject to appropriate adjustment
pursuant to Section 7 of the Agreement).
Also accompanying this Notice is my check in the amount of
$[BLANK], in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such
payment is based on advice received from appropriate officials of
the Corporation responsible for the administration of its payroll
and employment tax obligations. Alternatively, or in addition,
and subject to such restrictions as may be determined to be
necessary or appropriate to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, or to avoid earnings charges or
other adverse consequences to the Corporation under applicable
accounting or tax rules or regulations, in full or partial
payment of such taxes:
(1) I deliver herewith an additional [BLANK] shares of the
Common Stock presently owned by me, having an aggregate Fair
Market Value on the date hereof of $[BLANK]; and/or
(2) I hereby authorize the Corporation to withhold, from
the shares of Common Stock otherwise issuable to me pursuant
to this exercise, [BLANK] such shares having an aggregate
Fair Market Value on the date hereof of $[BLANK].
The sum of (i) any such check plus (ii) the Fair Market Value on
the date hereof of any shares of Common Stock specified in the
foregoing clauses (1) and (2) is not less than the amount of
federal and state withholding and employment taxes applicable to
this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a
result of such exercise.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal, this [BLANK] date of [BLANK], 199[BLANK].
DIRECTOR OR HIS ADMINISTRATOR, EXECUTOR, OR
PERSONAL REPRESENTATIVE
-------------------------------------------
EXHIBIT 5
4/24/92 - - New Directors
LXE Inc.
1989 Stock Incentive Plan
Stock Option Agreement
THIS STOCK OPTION AGREEMENT, entered into as of the 24th day
of April, 1992 (the "Date of Grant"), by and between LXE Inc., a
Georgia corporation (hereinafter referred to as the
"Corporation"), and William F. Evans (hereinafter referred to as
the "Director").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors (the "Board") of the
Corporation has adopted a stock incentive plan for directors,
officers and employees of the Corporation or its subsidiary
corporations, which Plan, as amended, is known as the "LXE Inc.
1989 Stock Incentive Plan" (hereinafter referred to as the
"Plan");
WHEREAS, on the Date of Grant the Director has been elected
to serve as a member of the Board, to whom the Corporation's
success is closely tied, and has agreed to so serve; and
WHEREAS, the Plan provides for the automatic grant, to each
new director who is not an employee of the Company or of any
parent or subsidiary of the Company, of a stock option to
purchase shares of the Corporation's common stock as hereinafter
set forth, and the Corporation and the Director desire to enter
into a written agreement with respect to such option in
accordance with the Plan.
NOW THEREFORE, as an incentive and to encourage stock
ownership, and in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Incorporation of Plan. This option is granted pursuant
to the provisions of the Plan and the terms and definitions of
the Plan, as it may be amended from time to time, are
incorporated herein by reference in this Stock Option Agreement
and made a part hereof. A copy of the Plan has been delivered
to, and receipt is hereby acknowledged by, the Director.
2. Grant of Option. Subject to the terms, restrictions,
limitations and conditions stated herein, the Corporation hereby
evidences its grant to the Director of the right and option
(hereinafter referred to as the "Option") to purchase all or any
part of an aggregate of Ten Thousand (10,000) shares of the
Corporation's $.01 par value common stock (the "Common Stock")
beginning as follows:
First Date Number of
Exercisable Shares
----------- ---------
October 24, 1992 3,333
October 24, 1993 3,333
October 24, 1994 3,334
This option shall expire and is not exercisable after 5:00 p.m.,
Atlanta time, on April 24, 1998 (the "Expiration Date"). This
option is not an incentive stock option as defined and
contemplated in Section 422 of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.
Notwithstanding the beginning date or dates for exercise set
forth in the preceding paragraph of this Section, but subject to
the provisions of such paragraph with respect to expiration of
this Option, this Option may be exercised as to all or any
portion of the full number of shares subject thereto if the
Corporation is registered under the Securities Exchange Act of
1934, as amended (the "Act"), and either (a) a tender offer of
exchange offer has been made for shares of the Common Stock,
other than one made by the Corporation or Electromagnetic
Sciences, Inc. ("EMS"), provided that the corporation, person or
other entity making such offer purchases or otherwise acquires
shares of Common Stock pursuant to such offer, or (b) any person
or group (as such terms are defined in Section 13(d)(3) of the
Act), other than EMS, becomes the holder of 50% or more of the
outstanding shares of Common Stock. If either of the events
specified in this paragraph have occurred, this Option shall be
fully exercisable: (x) in the event of (a) above, during the
period commencing on the date the tender offer or exchange offer
is commenced and ending on the date such offer expires and is not
extended; or (y) in the event of (b) above, during the 30-day
period commencing on the date upon which the Corporation is
provided a copy of a Schedule 13D or amendment thereto filed
pursuant to Section 13(d) of the Act and the rules and
regulations promulgated thereunder, indicating that any person or
group has become the holder of 50% or more of the outstanding
shares of Common Stock. In the case of (a) above, if the
corporation, person or other entity making the offer does not
purchase or otherwise acquire shares of Common Stock pursuant to
such offer, then the Director's right under this paragraph to
exercise this Option shall terminate, the Director and the
Corporation shall rescind any exercise of this Option pursuant to
this paragraph, and this Option shall be reinstated as if such
exercise had not occurred.
3. Purchase Price. The price per share to be paid by
the Director for the shares subject to this Option shall be
Fifteen and 25/100 Dollars ($15.25).
4. Exercise Terms. Beginning on the dates specified
above, and prior to the expiration of this Option as provided in
Section 2 hereof, the Director may exercise this Option as to all
such number of shares, or as to any part thereof, at any time and
from time to time during the remaining term of this Option;
provided that the Director must exercise this Option for at least
the lesser of 100 shares or the unexercised portion of this
Option. In the event this Option is not exercised with respect
to all or any part of the shares subject to this Option prior to
its expiration, the shares with respect to which this Option was
not exercised shall no longer be subject to this Option.
5. Option Non-Transferable. This Option and all rights
hereunder are neither assignable nor transferable by the Director
otherwise than by will or under the laws of descent and
distribution, or pursuant to a Qualified Domestic Relations
Order, and during the Director's lifetime this Option is
exercisable only by him (or by his guardian or legal
representative, should one be appointed, or qualified
transferee). More particularly (but without limiting the
generality of the foregoing), this Option may not be assigned,
transferred (except as aforesaid), pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be
subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option contrary to the provisions hereof
shall be null and void and without legal effect.
6. Notice of Exercise of Option. This Option may be
exercised by the Director, or by his administrator, executor,
personal representative or qualified transferee, by a written
notice (in substantially the form of the "Notice of Exercise"
attached hereto as Exhibit A) signed by the Director, or by such
administrator, executor, personal representative or qualified
transferee, and delivered to the Corporation at its principal
office in Norcross, Georgia, to the attention of the Chief
Executive Officer, Treasurer, or such other officer as the
Corporation may designate. Any such notice shall (a) specify the
number of shares of Common Stock which the Director or such
administrator, executor, personal representative or qualified
transferee, as the case may be, then elects to purchase
hereunder, and (b) and accompanied by (i) a certified or
cashier's check payable to the Corporation, or personal check
acceptable to the Corporation, in payment of the total price
applicable to such shares as provided herein, or (ii) (subject to
any restrictions referred to in Exhibit A) shares of the Common
Stock, owned by him or her and duly endorsed or accompanied by
stock transfer powers, having a Fair Market Value equal to the
total purchase price applicable to such shares purchased
hereunder, or (iii) such a check, and the number of such shares
whose Fair Market Value when added to the amount of the check
equals the total purchase price applicable to such shares
purchased hereunder. Such notice shall also be accompanied by
such a check or shares of Common Stock in payment of applicable
withholding and employment taxes, or the person exercising this
Option shall authorize the withholding of shares of Common Stock
otherwise issuable under this Option in payment of such taxes,
all as set forth on Exhibit A and subject to any restrictions
referred to therein. Upon receipt of any such notice and
accompanying payments, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Director or to
his administrator, executor, personal representative or qualified
transferee, as the case may be, stock certificates for the number
of shares specified in such notice registered in the name of the
person exercising this Option.
7. Adjustment in Option. If prior to the complete
exercise of this Option, there shall be a change in the
outstanding Common Stock by reason of one or more stock splits,
stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustments, the number,
kind and option price of the shares remaining subject to this
Option shall be equitably adjusted in accordance with the terms
of the Plan, so that the proportionate interest in the Cororation
represented by the shares then subject to the Option shall be the
same as before the occurrence of such events.
8. Termination as a Director. If the Director for any
reason ceases to be a member of the Board of Directors of the
Corporation (such event being hereinafter referred to as a
"Termination"), then:
(a) To the extent this Option shall have become exercisable
on or prior to the date of Termination, it shall remain
exercisable until the Expiration Date; and
(b) Any portion of this Option that had not become
exercisable on or prior to the date of Termination shall
immediately terminate and shall not thereafter become
exercisable.
This Option does not confer upon the Director any right with
respect to continuance as a member of the Board of Directors of
the Corporation.
9. Binding Agreement. This Agreement shall be binding
upon the parties hereto and their respresentatives, successors
and assigns.
IN WITNESS WHEREOF, the Corporation has caused this Stock
Option Agreement to be executed on behalf of the Corporation and
the Corporation's seal to be affixed hereto and attested by the
Secretary of the Corporation, and the Director has executed this
Agreement under his seal, all as of the day and year first above
written.
LXE INC.
[CORPORATE SEAL]
ATTEST: BY: /s/
-----------------------------
Chief Executive Officer
/s/
- ------------------------ DIRECTOR:
Secretary
/s/
-------------------------(SEAL)
William F. Evans
EXHIBIT A
LXE INC.
1989 STOCK INCENTIVE PLAN
NOTICE OF EXERCISE
OF STOCK OPTION
The undersigned hereby notifies LXE Inc. (the "Corporation")
of his election to exercise his option to purchase [BLANK] shares
of the Corporation's common stock, $.01 par value (the Common
Stock"), pursuant to that Stock Option Agreement (the "Agreement")
between William F. Evans ("Director") and the Corporation dated
April 24, 1992. Accompanying this Notice is (1) a certified or a
cashier's check (or other check acceptable to the Corporation) in
the amount of $[BLANK] payable to the Corporation, and/or (2)
(subject to such restrictions as may be determined to be
necessary or appropriate to avoid earnings charges or other
adverse consequences to the Corporation under applicable
accounting or tax rules or regulations) [BLANK] shares of the
common Stock presently owned by the undersigned and duly endorsed
or accompanied by stock tansfer powers, having an aggregate Fair
Market Value (as defined in the LXE Inc. 1989 Stock Incentive
Plan) on the date hereof of $[BLANK], such amount being equal, in
the aggregate, to the purcahse price per share set forth in
Section 3 of the Agreement multiplied by the number of shares
being hereby purchased (in each instance subject to appropriate
adjustment pursuant to Section 7 of the Agreement).
Also accompanying this Notice is my check in the amount of
$[BLANK], in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such
payment is based on advice received from appropriate officials of
the Corporaiton responsible for the administration of its payroll
and employment tax obligations. Alternatively, or in addition,
and subject to such restrictions as may be determined to be
necessary or appropriate to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, or to avoid earnings charges or
other adverse consequences to the Corporation under applicable
accounting or tax rules or regulations, in full or partial
payment of such taxes:
(1) I deliver herewith an additional [BLANK] shares of the
Common Stock presently owned by me, having an aggregate Fair
Market Value on the date hereof of $[BLANK]; and/or
(2) I hereby authorize the Corporation to withhold, from
the shares of Common Stock otherwise issuable to me pursuant
to this exercise, [BLANK] such shares having an aggregate
Fair Market Value on the date hereof of $[BLANK].
The sum of (i) any such check plus (ii) the Fair Market Value on
the date hereof of any shares of Common Stock specified in the
foregoing clauses (1) and (2) is not less than the amount of
federal and state withholding and employment taxes applicable to
this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a
result of such exercise.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal, this [BLANK] date of [BLANK], 199[BLANK].
DIRECTOR OR HIS ADMINISTRATOR, EXECUTOR,
PERSONAL REPRESENTATIVE OR QUALIFIED
TRANSFEREE
-------------------------------------------
EXHIBIT 6
4/27/90
ELECTROMAGNETIC SCIENCES, INC.
OPTION AGREEMENT UNDER THE
1986 DIRECTORS' STOCK OPTION PLAN
THIS OPTION AGREEMENT, entered into as of the 26th day of
April, 1991 (the "Date of Grant"), by and between ELECTROMAGNETIC
SCIENCES, INC., a Georgia corporation (hereinafter referred to as
the "Corporation), and William F. Evans (hereinafter referred to
as the "Director").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors of the Corporation's
predecessor adopted on January 31, 1986, and ratified on April
25, 1986, a stock option plan for its directors, known as the
"Electromagnetic Sciences, Inc. 1986 Directors' Stock Option
Plan" (hereinafter referred to as the "Plan"), which Plan was
adopted by the Corporation pursuant to the merger of such
predecessor with and into the Corporation effective July 3, 1989;
WHEREAS, the Director on the Date of Grant has been elected
for a reguluar term as a member of the Corporation's Board of
Directors at an Annual Meeting of Shareholders, or adjournment
thereof;
WHEREAS, upon the Director's election, the Director has
automatically been granted a stock option under the Plan to
purchase the number of shares of the Corporation's common stock
as hereinafter set forth, and the Corporation and the Director
desire to enter into a written agreement with respect to such
option in accordance with the Plan.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Incorporation of Plan. This option is granted pursuant
to the provisions of the Plan and the terms and definitions of
the Plan are incorporated by reference in this Option Agreement
and made a part hereof. A copy of the Plan has been delivered
to, and receipt is hereby acknowledged by, the Director.
2. Grant of Option. Subject to the terms, restrictions,
limitations and conditions stated herein, the Corporation hereby
evidences its grant to the Director of the right and option
(hereinafter referred to as the "Option") to purchase all or any
part of an aggregate of Seven Hundred Eighty-Two (782) shares of
the Corporation's $.10 par value common stock the "Common
Stock"). The Option shall expire and is not exercisable after
5:00 p.m., Atlanta, time, on the sixth anniversary of the Date of
Grant. This Option is not intended to be, and shall not be
construed or interpreted to be, an incentive stock option for
federal income tax purposes.
3. Purchase Price. The price per share to be paid by the
Director for the shares subject to this Option shall be Eleven
and 50/100 Dollars ($11.50), which price is equal to the Fair
Market Value (as defined in the Plan)of a share of the Common
Stock as of the Date of Grant.
4. Exercise Terms. Beginning on the first anniversary of
the Date of Grant and prior to the expiration of this Option as
provided in paragraph 2 hereof, the Director may exercise this
Option as to all such number of shares, or as to any part
thereof, at any time and from time to time during the remaining
term of this Option; provided that the Director must exercise the
Option for at least the lesser of 25 shares or the unexercised
portion of the Option. In the event this Option is not exercised
with respect to all or any part of the shares subject to this
Option prior to its expiration, the shares with respect to which
this Option was not exercised shall no longer be subject to this
Option.
5. Option Non-Transferable. This Option and all rights
hereunder are neither assignable nor transferable, and may not be
pledged or hypothecated in any way, by the Director otherwise
than by will or under the laws of descent and distribution, and
during the Director's lifetime this Option is exercisable only by
him (or by his guardian or legal representative, should one be
appointed). In the event of the Director's death, this Option
may be exercised by his legatee(s) or other distributee(s) or by
his personal representative. This Option shall not be subject to
execution, attachment or similar process, and any attempted
assignment, transfer, pledge, hypothecation or other disposition
of this Option contrary to the provisions hereof shall be null
and void and without legal effect.
6. Notice of Exercise of Option. This Option may be
exercised by a written notice (in substantially the form of the
"Notice of Exercise" attached hereto as Exhibit A) signed by the
director, or by such other person as is authorized to effect such
exercise, and delivered or mailed to the Corporation at its
principal office in Norcross, Georgia, to the attention of the
President, Treasurer or such other officer as the Corporation may
designate. Any such notice shall (a) specify the number of
shares of Common Stock which such person then elects to purchase
hereunder, and (b) be accompanied by (i) a check acceptable to
the corporation in payment of the total price applicable to such
shares as provided herein, or (ii) shares of Common Stock, owned
by him and duly endorsed or accompanied by stock transfer powers,
having a Fair Market Value equal to the total purchase price
applicable to such shares purchased hereunder, or (iii) a check,
and the number of such shares whose fair market value when added
to the amount of the check equals the total purchase price
applicable to such shares purchased hereunder. Such notice shall
also be accompanied by the Director's check or shares of Common
Stock in payment of applicable withholding and employment taxes,
or Director shall authorize the whithholding of shares of Common
Stock otherwise issuable under this Option in payment of such
taxes, all as set forth on Exhibit A.
Upon receipt of any such notice and accompanying payment,
and subject to the terms hereof and Article VI of the Plan, the
Corporation agrees to cause to be issued one or more stock
certificates aggregating the number of shares specified in such
notice registered in the name of the person exercising this
Option.
7. Antidilution. If, after the Date of Grant and prior to
the complete exercise of this Option, there shall be a change in
the outstanding Common Stock by reason of one or more stock
splits, stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustmens, the Board of
Directors will, in accordance with the terms of the Plan,
equitably adjust the number, kind and option price of the shares
remaining subject to this Option so that the proportionate
interest in the Corporation reprsented by the shares then subject
to the Option shall be the same as before the occurrence of such
event.
In the event the Corproation is dissolved or liquidated or
involved in any merger or combination in which the Corporation is
not a surviving corporation, this option shall terminate, but the
Director shall have the right, immediately prior to such
dissolution, liquidation, merger or combination, to exercise this
Option, in whole or in part, to the extent that it shall not have
been exercised, without regard to the date on which this Option
would otherwise become exercisable pursuant to paragraph 4.
8. Termination as a Director. In the event of the
termination of the Director as a member of the Board of Directors
of the Corporation (other than for reasons of death or
disability) prior to the earlier of the first anniversary of the
Date of Grant, or the first Annual Meeting (or adjournment
thereof) occurring after the Date of Grant of this Option at
which the shareholders shall elect directors, this Option shall
not hereafter become exercisable in whole or in part, and shall
thereupon terminate.
9. Binding Agreement. This Agreement shall be binding upon
the parties hereto and their representatives, successors and
assigns.
IN WITNESS WHEREOF, the Board of Directors of the
Corporation has caused this Option Agreement to be executed on
behalf of the Corporation and the Corporation's seal to be
affixed hereto and attested by an Assistant Secretary of the
Corporation, and the Director has executed this Agreement under
his seal, all as of the day and year first above written.
ELECTROMAGNETIC SCIENCES, INC.
[CORPORATE SEAL]
ATTEST: By: /s/
----------------------------
President
/s/
- -----------------------
Assistant Secretary DIRECTOR
/s/
--------------------------(SEAL)
EXHIBIT A
ELECTROMAGNETIC SCIENCES, INC.
1986 DIRECTORS' STOCK OPTION PLAN
NOTICE OF EXERCISE
The undersigned hereby notifies Electromgnetic Sciences,
Inc. (the "Corporation") of his election to exercise his option
to purchase [BLANK] shares of the Corporation's common stock,
$.10 par value (the "Common Stock"), pursuant to that Option
Agreement between the undersigned and the Corporation dated April
26, 1991. Accompanying this Notice is (1) a check in the amount
of $[BLANK] payable to the Corporation, and/or (2) [BLANK] shares
of the Common Stock presently owned by the undersigned and duly
endorsed or accompanied by stock transfer powers, having an
aggregate Fair Market Value (as defined in the Electromagnetic
Sciences, Inc. 1986 Directors' Stock Option Plan) as of the date
hereof of $[BLANK], such amounts being equal, in the aggregate,
to the purchase price per share set forth in paragraph 3 of said
Agreement multiplied by the number of shares being hereby
purchased (in each instance subject to appropriate adjustment
pursuant to paragraph 7 of such Agreement).
Also accompanying this Notice is my check in the amount of
$[BLANK], in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such
payment is based on advice received from appropriate officials of
the Corporation responsible for the administration of its payroll
and employment tax obligations. Alternatively, or in addition,
and subject to such restrictions as are determined to be
necessary or appropriate to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, or to avoid earnings charges or
other adverse consequences to the Corporation under applicable
accounting or tax rules or regulations, in full or partial
payment of such taxes:
(1) I deliver herewith an additional [BLANK] shares of the
Common Stock presently owned by me, having an aggregate Fair
Market Value as of the date hereof of $[BLANK]; and/or
(2) I hereby authorize the Corporation to withhold, from the
shares of Common Stock otherwise issuable to me pursuant to this
exercise, [BLANK] such shares having an aggregate Fair Market
Value at the date hereof of $[BLANK].
The sum of (i) any such check plus (ii) the Fair Market
Value at the date hereof of any shares of Common Stock specified
in the foregoing clauses (1) and (2) is not less than the amount
of federal and state withholding and employment taxes applicable
to this exercise, and is not greater than the total of all
federal and state income and employment taxes to be owed by me as
a result of such exercise.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal, this [BLANK] day of [BLANK], 19[BLANK].
DIRECTOR OR HIS ADMINISTRATOR, EXECUTOR
OR PERSONAL REPRESENTATIVE
----------------------------------------
