As filed with the Securities and Exchange Commission on December 31, 1996
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-4
Registration Statement
Under The Securities Act of 1933
--------------------------------
ANTEC CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 3661 36-3892082
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
2850 West Golf Road, Rolling Meadows, Illinois 60008, (847)439-4444
-----------------------------------------------------------------------
(Address including zip code, and telephone number, including area code, of registrant's principal executive offices)
James E. Knox
2850 West Golf Road, Rolling Meadows, Illinois 60008, (847)439-4444
-----------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
W. Brinkley Dickerson, Jr Tad R. Smith
Schiff Hardin & Waite Kemp, Smith, Duncan &
7300 Sears Tower Hammond, P.C.
Chicago, IL 60606 2000 State National Plaza
(312) 258-5500 El Paso, TX 79901
(915) 533-4424
</TABLE>
-----------------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [_]
<TABLE>
<S> <C> <C> <C>
Proposed maximum Proposed maximum
Title of each class of securities Amount to be offering price per aggregate offering Amount of
to be registered registered (1) share(2) price (2) registration fee
Common Stock, par value $0.01
per share . . . . . . . . . . . 16,313,966 $8.8125 $143,766.825 $43,566
<FN>
<F1> Represents the estimated maximum number of shares of common stock to be issued pursuant to the Plan of
Merger dated October 28, 1996, between ANTEC Corporation, TSX Corporation ("TSX"), and TSX Acquisition
Corporation.
<F2> The maximum aggregate offering price is calculated in accordance with Rule 457(f)(1) based upon the average
of the high $9.00 and low $8.625 sale prices per share reported on the Nasdaq Stock Market's National Market
on December 27, 1996, for the shares of TSX common stock to be converted into shares of ANTEC common stock.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
===========================================================================
<PAGE> 2
ANTEC CORPORATION
-----------------
CROSS REFERENCE SHEET
---------------------
Pursuant to Item 501 of Regulation S-K, the following shows the
location in the Joint Proxy Statement-Prospectus of the responses to
the Items of Part I of Form S-4.
<TABLE>
<S> <C>
Registration Statement Item and Caption Proxy Statement Caption
--------------------------------------- -----------------------
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus . . . . . . . . . . . . . . Facing page of Registration Statement; Cross
Reference Sheet; Outside Front Cover Page of
Joint Proxy Statement-Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Page of Joint Proxy
Statement-Prospectus; Table of Contents;
Where You Can Find More Information
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information . . . . . . . . . . . . . . . . . . Summary of the Joint Proxy-Statement
Prospectus; Special Meetings of
Stockholders; The Business of ANTEC; The
Business of TSX
4. Terms of the Transaction . . . . . . . . . . . . . . . . . Summary of Joint Proxy Statement-Prospectus;
The Merger; The Plan of Merger; Board of
Directors and Management of ANTEC Following
the Merger; Comparison of Rights of Holders
of ANTEC Common Stock and TSX Common Stock
5. Pro Forma Financial Information . . . . . . . . . . . . . Summary; Pro Forma Financial Information
6. Material Contracts with the Company Being
Acquired . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters . . . . . . Not Applicable
8. Interests of Named Experts and Counsel . . . . . . . . . . The Merger--Opinion of TSX's Financial
Advisor; Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . . . . . . Not Applicable
10. Information with Respect to S-3 Registrants . . . . . . . Summary--Recent Developments
11. Incorporation of Certain Information by Reference . . . . Where You Can Find More Information
12. Information with Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
13. Incorporation of Certain Information by Reference . . . . Not Applicable
14. Information with Respect to Registrants Other
Than S-2 or S-3 Registrants . . . . . . . . . . . . . . . Not Applicable
15. Information with Respect to S-3 Companies . . . . . . . . Summary--Recent Developments: Where You Can
Find More Information
16. Information with Respect to S-2 or S-3 Companies . . . . . Not Applicable
17. Information with Respect to Companies Other Than
S-2 or S-3 Companies . . . . . . . . . . . . . . . . . . . Not Applicable
18. Information if Proxies, Consents or Authorization
Are to Be Solicited . . . . . . . . . . . . . . . . . . . Outside Front Cover Page of Joint Proxy
Statement-Prospectus; Summary of Joint Proxy
Statement-Prospectus; Special Meetings of
Stockholders; Board of Directors and
Management of ANTEC Following the Merger;
The Merger--Interests of Certain Persons in
the Merger; Appraisal or Dissenters' Rights
19. Information if Proxies, Consents or
Authorizations Are Not to Be Solicited, or in an
Exchange Offer . . . . . . . . . . . . . . . . . . . . . . Not applicable
</TABLE>
<PAGE> 3
December 31, 1996
ANTEC LOGO TSX LOGO
MERGER PROPOSED--YOUR VOTE IS VERY IMPORTANT
The Boards of Directors of card to us. If you sign, date
ANTEC Corporation and TSX and mail your proxy card without
Corporation have agreed on a indicating how you want to vote,
merger designed to create one of your proxy will be counted as a
the leading suppliers of hybrid vote in favor of the merger. If
fiber/coax products. The merger you are a TSX stockholder and
is structured so that ANTEC will fail to return your card, the
be the surviving publicly-traded effect in most cases will be a
company and TSX will become a vote against the merger.
wholly-owned subsidiary of
ANTEC. TSX stockholders will Only stockholders of record
receive one share of ANTEC of ANTEC and TSX common stock as
common stock for each share of of December 23, 1996, are
TSX common stock that they own, entitled to attend and vote at
and ANTEC stockholders will the meetings. The dates, times
continue to own their existing and places of the meetings are
shares. We estimate that the as follows:
shares of ANTEC common stock to
be issued to TSX stockholders For TSX Stockholders:
will represent approximately 40% Thursday, February 6, 1997
of the outstanding common stock 10:00 a.m.
of ANTEC after the merger. TSX Corporation
Likewise, the shares of ANTEC 4849 North Mesa, Suite 200
common stock held by ANTEC El Paso, Texas
stockholders prior to the merger
will represent approximately 60% For ANTEC Stockholders:
of the outstanding common stock Thursday, February 6, 1997
of ANTEC after the merger. 10:00 a.m.
Meadows Corporate Auditorium
The merger cannot be 2850 West Golf Road
completed unless the stock- Rolling Meadows, Illinois
holders of both companies
approve it. We have scheduled This Joint Proxy Statement-
special meetings for our stock- Prospectus provides you with
holders to vote on the merger. detailed information about the
YOUR VOTE IS VERY IMPORTANT. proposed merger. We encourage
you to read this entire document
Whether or not you plan to carefully. In addition, you may
attend a meeting, please take obtain information about our
the time to vote by completing companies from documents that we
and mailing the enclosed proxy have filed with the Securities
and Exchange Commission.
/s/ John M. Egan /s/ William H. Lambert
- ------------------------------ --------------------------------
John M. Egan William H. Lambert
President and Chief President and Chief
Executive Officer Executive Officer
ANTEC Corporation TSX Corporation
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORS HAVE APPROVED THE
ANTEC COMMON STOCK TO BE ISSUED UNDER THIS JOINT PROXY STATEMENT-
PROSPECTUS OR DETERMINED IF THIS JOINT PROXY STATEMENT-PROSPECTUS IS
ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Joint Proxy Statement-Prospectus dated December 31, 1996, and first
mailed to stockholders on January 6, 1996.
<PAGE> 4
TABLE OF CONTENTS
-----------------
QUESTIONS AND ANSWERS ABOUT THE ANTEC/TSX MERGER . . . . . . . . 7
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Companies . . . . . . . . . . . . . . . . . . . . . . . 9
Our Reasons for the Merger . . . . . . . . . . . . . . . . . 9
Approval of the Merger . . . . . . . . . . . . . . . . . . . 9
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . 10
Summary Selected Historical Consolidated Financial
Information . . . . . . . . . . . . . . . . . . . . . . 14
Significant Events Affecting Historical Results . . . . . . 17
Recent Developments . . . . . . . . . . . . . . . . . . . . 17
Summary Selected Unaudited Pro Forma Consolidated Financial
Information . . . . . . . . . . . . . . . . . . . . . . 19
Unaudited Pro Forma Consolidated Financial Information . . . 20
Comparative Per Share Data . . . . . . . . . . . . . . . . . 21
SPECIAL MEETINGS OF STOCKHOLDERS . . . . . . . . . . . . . . . . 22
Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Voting Rights; Votes Required for Approval . . . . . . . . . 22
Voting and Revocation of Proxies . . . . . . . . . . . . . . 23
Solicitation of Proxies . . . . . . . . . . . . . . . . . . 23
Other Matters . . . . . . . . . . . . . . . . . . . . . . . 24
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Background of Merger . . . . . . . . . . . . . . . . . . . . 24
Recommendation of the ANTEC Board;
ANTEC's Reasons for the Merger . . . . . . . . . . . . 26
Recommendation of the TSX Board;
TSX's Reasons for the Merger . . . . . . . . . . . . . 29
ANTEC's Financial Advisor . . . . . . . . . . . . . . . . . 33
Opinion of TSX's Financial Advisor . . . . . . . . . . . . . 33
Conduct of Business After the Merger . . . . . . . . . . . . 38
Accounting Treatment . . . . . . . . . . . . . . . . . . . . 39
Certain Effects of the Merger . . . . . . . . . . . . . . . 39
Interests of Certain Persons in the Merger . . . . . . . . . 40
Exchange of Stock Certificates; Fractional Shares . . . . . 41
Federal Securities Laws Consequences;
Stock Transfer Restriction Agreements . . . . . . . . . 42
Nasdaq National Market Listing . . . . . . . . . . . . . . . 43
Commitments with Respect to Other Offers . . . . . . . . . . 43
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . 44
Certain Federal Income Tax Consequences of the Merger . . . 44
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . 45
COMPARABLE PER SHARE MARKET PRICE INFORMATION . . . . . . . . . . 46
<PAGE> 5
THE PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . . 48
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . 48
Treatment of TSX Options . . . . . . . . . . . . . . . . . . 48
Representations and Warranties . . . . . . . . . . . . . . . 48
Certain Covenants . . . . . . . . . . . . . . . . . . . . . 49
Conditions to the Consummation of the Merger . . . . . . . . 50
Termination of the Plan of Merger . . . . . . . . . . . . . 51
Effect of Termination . . . . . . . . . . . . . . . . . . . 52
Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 52
Waiver and Amendment . . . . . . . . . . . . . . . . . . . . 53
CERTAIN AGREEMENTS WITH TCI . . . . . . . . . . . . . . . . . . . 53
Customer Agreements . . . . . . . . . . . . . . . . . . . . 53
Investment Agreement . . . . . . . . . . . . . . . . . . . . 54
Registration Rights Agreement . . . . . . . . . . . . . . . 56
VOTING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 56
THE BUSINESS OF ANTEC . . . . . . . . . . . . . . . . . . . . . . 56
THE BUSINESS OF TSX . . . . . . . . . . . . . . . . . . . . . . . 57
BOARD OF DIRECTORS AND MANAGEMENT OF ANTEC FOLLOWING THE MERGER . 58
Board of Directors . . . . . . . . . . . . . . . . . . . . . 58
Compensation of Directors . . . . . . . . . . . . . . . . . 59
Management . . . . . . . . . . . . . . . . . . . . . . . . . 59
Compensation of Executive Officers . . . . . . . . . . . . . 60
BENEFICIAL OWNERSHIP OF TSX COMMON STOCK AND ANTEC COMMON STOCK . 61
DESCRIPTION OF ANTEC CAPITAL STOCK . . . . . . . . . . . . . . . 64
ANTEC Common Stock . . . . . . . . . . . . . . . . . . . . . 64
ANTEC Preferred Stock . . . . . . . . . . . . . . . . . . . 64
Certain Charter and Bylaw Provisions . . . . . . . . . . . . 65
Transfer Agent and Registrar . . . . . . . . . . . . . . . . 65
COMPARISON OF RIGHTS OF HOLDERS OF ANTEC COMMON STOCK AND TSX
COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . 65
Number of Directors . . . . . . . . . . . . . . . . . . . . 66
Structure of Board . . . . . . . . . . . . . . . . . . . . . 66
Filling of Vacancies and Newly Created Directorships . . . . 66
Removal of Directors . . . . . . . . . . . . . . . . . . . . 67
Stockholder Meetings . . . . . . . . . . . . . . . . . . . . 67
Advance Notice of Nominations and Stockholder Proposals . . 67
Written Consent . . . . . . . . . . . . . . . . . . . . . . 67
Amendment of Certificate (or Articles) of Incorporation . . 68
Amendment of Bylaws . . . . . . . . . . . . . . . . . . . . 69
Required Vote for Certain Business Combinations and Other
Anti-Takeover Provisions . . . . . . . . . . . . . . . 69
Inspection of Records . . . . . . . . . . . . . . . . . . . 71
Payment of Dividends . . . . . . . . . . . . . . . . . . . . 71
Limitation on Personal Liability of Directors and Officers . 72
Duties of Directors . . . . . . . . . . . . . . . . . . . . 72
<PAGE> 6
APPRAISAL OR DISSENTERS' RIGHTS . . . . . . . . . . . . . . . . . 72
PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . 73
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 82
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . 82
GLOSSARY OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . 85
APPENDIX A: Plan of Merger
APPENDIX B: Opinion of Allen & Company
<PAGE> 7
QUESTIONS AND ANSWERS
ABOUT THE ANTEC/TSX MERGER
Q: Why are the two companies Directors of both TSX and
proposing to merge? ANTEC unanimously recommend
voting in favor of the
A: Both ANTEC and TSX proposed merger.
manufacture and distribute
hybrid fiber/coax products. Q: Should I send in my stock
Our products generally are certificates now?
complementary, and the
merger will enable the A: No. After the merger is
combined enterprise to have completed, we will send TSX
a broader product line. In stockholders written
addition, ANTEC's sales instructions for exchanging
organization is their stock certificates.
complemented well by TSX's. ANTEC stockholders will
The combined enterprise keep their current
will own efficient certificates.
facilities to manufacture
products that ANTEC is now Q: Please explain the exchange
acquiring from others or ratio.
having others manufacture
for it. To review the A: TSX stockholders will
reasons for the merger in receive one share of ANTEC
greater detail and related common stock in exchange
uncertainties, see pages 17, for each share of TSX
24 through 33 and 45. common stock. TSX had
proposed a higher ex-
Q: How will I benefit? change ratio during the
negotiation of the merger
A: We believe that and likewise ANTEC had
stockholders of ANTEC and proposed a lower
TSX will benefit by being exchange ratio. The final
owners of a company that is exchange ratio was the
better able to compete ef- product of negotiation and
fectively in its industry is at a level that each
than either ANTEC or TSX company believes is fair to
individually. its stockholders.
Q: What do I need to do now? Q: What about future
dividends?
A: Just sign your proxy card
and mail it to us in the A: Historically, neither ANTEC
enclosed return envelope as nor TSX has paid dividends.
soon as possible, so that ANTEC and TSX have had, and
your shares may be ANTEC will continue to
represented at the special have, a substantial
meetings. Both the TSX and commitment to expanding
ANTEC special meetings will their businesses, and that
take place on February 6, expansion has required the
1997. The Boards of cash that otherwise might
<PAGE> 8
be available for dividends. Q: What are the tax
consequences to
stockholders of the merger?
Q: When do you expect the
merger to be completed? A: The exchange of shares by
TSX stockholders generally
A: We are working towards com- will be tax-free to TSX
pleting the merger as stockholders for federal
quickly as possible, income tax purposes. The
hopefully during the week merger will be tax-free to
following the stockholders ANTEC stockholders for
meetings. federal income tax pur-
poses. To review the tax
consequences to
stockholders in greater
detail, see page 44.
<PAGE> 9
SUMMARY
------
This summary highlights selected information from this document and
may not contain all of the information that is important to you. To
understand the Merger fully, and for more complete descriptions of the
legal terms of the Merger, you should read carefully this entire
document and the documents we have referred you to. See "WHERE YOU
CAN FIND MORE INFORMATION" on page 82.
A glossary of capitalized terms used in this Joint Proxy Statement-
Prospectus is included at the end of this document prior to the
Appendices.
THE COMPANIES facture and distribute hybrid
fiber/coax products. Our prod-
ANTEC CORPORATION ucts generally are complemen-
2850 West Golf Road tary, and the Merger will enable
Rolling Meadows, Illinois 60008 the combined enterprise to have
(847) 439-4444 a broader product line. In ad-
dition, ANTEC's sales organ-
ANTEC is an international ization is complemented well by
communications technology com- TSX's. The combined enterprise
pany specializing in the design, will own efficient facilities to
engineering, manufacturing, manufacture products that ANTEC
materials management and distri- is now buying from others or
bution of products for hybrid having others manufacture for
fiber/coax broadband networks. it. We believe that the
ANTEC concentrates primarily on stockholders of ANTEC and TSX
serving the cable television will be benefited by the greater
industry. strength of the combined
enterprise.
TSX CORPORATION
4849 North Mesa, Suite 200 To review the reasons for the
El Paso, Texas 79912 Merger in greater detail, as
(915) 533-4600 well as related uncertainties,
see pages 17, 24 through 33 and
TSX is a leading manufacturer 45.
of high technology optical nodes
and distribution amplifiers for APPROVAL OF THE MERGER
worldwide cable television
markets. Nodes provide the By ANTEC STOCKHOLDERS:
interface between a fiber optic
network and a coaxial dis- The affirmative vote of a
tribution system. Distribution majority of the shares of ANTEC
amplifiers strengthen the signal common stock present and
either on its way to the node or entitled to vote at the special
from the node. meeting of stockholders is
required to approve the Merger.
OUR REASONS FOR THE MERGER Anixter International Inc.
("Anixter"), which holds
The cable television equip- approximately 31% of the ANTEC
ment industry is highly compet- common stock, has agreed to vote
itive. Both ANTEC and TSX manu- in favor of the Merger.
<PAGE> 10
By TSX STOCKHOLDERS: stock that they own. No frac-
tional shares currently are out-
The affirmative vote of a standing or will be issued.
majority of the shares of TSX Options to purchase TSX common
common stock outstanding on the stock will become vested (to the
record date is required to ap- extent unvested) as a result of
prove the Merger. Tele-Commun- the Merger and will be converted
ications, Inc. ("TCI"), which into options to purchase ANTEC
holds approximately 41% of the common stock at the same exer-
TSX common stock, has agreed to cise price and on generally the
vote in favor of the Merger. same other existing terms of the
TSX options.
OUR RECOMMENDATIONS
TO STOCKHOLDERS TSX stockholders should not
send in their stock certificates
To ANTEC STOCKHOLDERS: until requested to do so after
the Merger is completed.
The ANTEC Board believes that
the Merger is in your best --------------------------------
interest and unanimously recom- Ownership of ANTEC Following the
mends that you vote FOR the pro- Merger
posal to approve the Plan of --------------------------------
Merger and the issuance of
shares of ANTEC common stock to We anticipate that ANTEC will
TSX stockholders in the Merger. issue approximately 15.4 million
shares of ANTEC common stock to
To TSX STOCKHOLDERS: TSX stockholders in the Merger,
assuming that none of the
The TSX Board believes that approximately 1.7 million
the Merger is in your best in- options to purchase TSX common
terest and unanimously recom- stock that currently are out-
mends that you vote FOR the pro- standing is exercised prior to
posal to approve the Plan of the Merger. Based on that num-
Merger. ber, the shares of ANTEC common
stock issued to TSX stockholders
THE MERGER in the Merger will constitute
approximately 40% of the out-
The Plan of Merger is at- standing common stock of ANTEC
tached as Appendix A to this after the Merger.
Joint Proxy Statement-Prospec-
tus. We encourage you to read --------------------------------
the Plan of Merger as it is the Board of Directors and Manage-
legal document that governs the ment of ANTEC Following the
Merger. Merger (see pages 58 through 61)
--------------------------------
- --------------------------------
What TSX Stockholders Will Re- When the Merger is complete,
ceive (see page 48) we expect that John Egan will
- -------------------------------- continue as chief executive
officer of ANTEC. We also
As a result of the Merger, expect that William Lambert, who
TSX stockholders will receive is the chairman and chief exec-
one share of ANTEC common stock utive officer of TSX, will con-
for each share of TSX common tinue with the combined enter-
<PAGE> 11
prise--he has agreed to continue standard. Similarly, each party
for at least nine months--in is required to deliver various
order to assist in the integra- letters from its independent
tion of the two businesses auditors to the effect that the
following the Merger. Merger qualifies for pooling of
interests accounting treatment.
The board of directors of Certain of the conditions to the
ANTEC initially will consist of Merger may be waived by the
eight members, consisting of the company entitled to assert the
seven current members plus Mr. condition.
Lambert, who ANTEC has agreed to
appoint as a director after the --------------------------------
Merger is completed. Termination of the Plan of
Merger (see page 51)
- -------------------------------- --------------------------------
Other Interests of Officers and
Directors in the Merger We can agree to terminate the
(see pages 40 and 41) Plan of Merger without
- ------------------------------- completing the Merger, and
either of us can terminate the
In considering the Boards' Plan of Merger under various
recommendations that you vote in circumstances, including if
favor of the Merger, you should (a) the Merger is not completed
be aware that Mr. Lambert (who by April 30, 1997, for instance
is also a director) and another because the conditions
TSX officer, have employment summarized above are not met,
agreements that provide them (b) the required stockholder
with interests in the Merger approvals are not received,
that are different from, or in (c) a court or other
addition to, yours. Please governmental authority prohibits
refer to page 40 for more infor- the Merger, or (d) the other
mation concerning these party materially fails to comply
interests. with its representations or
warranties or obligations under
- -------------------------------- the Plan of Merger.
Conditions to the Merger
(see pages 50 through 51) -------------------------------
- -------------------------------- Termination Fees (see page 52)
-------------------------------
The completion of the Merger
depends upon satisfaction of a The Plan of Merger requires
number of conditions, including ANTEC or TSX to pay to the other
the continued accuracy of each a termination fee of $6 million
party's representations and if the Plan of Merger is
warranties, the performance by terminated under certain
each party of its obligations circumstances.
under the Plan of Merger, and
the absence of any events or -------------------------------
changes with respect to either Regulatory Approvals
having, or which reasonably (see page 44)
could be expected to have, an -------------------------------
adverse effect on that party.
Each of these conditions is The Hart-Scott-Rodino
subject to a "materiality" Antitrust Improvements Act of
<PAGE> 12
1976, as amended, prohibited us based upon and subject to the
from completing the Merger until matters expressed in the
after we have furnished certain opinion, the Merger is fair,
information and materials to the from a financial point of view,
Antitrust Division of the to TSX stockholders. ANTEC
Department of Justice and the received advice from its
FTC and a required waiting financial advisor, but did not
period had ended. The required request a written opinion.
information was furnished and
the waiting period ended on In connection with delivering
December 26, 1996. However, the its opinion, Allen & Co.
Department of Justice and the performed a variety of analyses.
FTC continue to have the The analyses included comparing
authority to challenge the TSX's and ANTEC's relative
Merger on antitrust grounds contributions to the combined
before or after the Merger is company with respect to various
completed. revenue, earnings, balance sheet
and market value data;
- ------------------------------- estimating and analyzing the pro
Accounting Treatment forma effect of the Merger on
(see page 39) earnings per share; estimating
- ------------------------------- the present value of TSX common
stock using a discounted cash
We expect the Merger to flow methodology; comparing
qualify as a pooling of ANTEC's and TSX's historical
interests, which means that we share prices and operating and
will treat our companies as if financial ratios with other
they had always been combined publicly-traded companies'
for accounting and financial comparable data; comparing the
reporting purposes. terms of the Merger with those
of other selected transactions;
- -------------------------------- and comparing the amount paid in
Opinion of Financial Advisor the Merger with premiums paid in
(see pages 33 through 38) other selected transactions.
- --------------------------------
-------------------------------
In deciding to approve the Material Federal Income Tax
Merger, TSX's Board considered Consequences (see page 44)
the opinion from its financial -------------------------------
advisor, Allen & Company
Incorporated ("Allen & Co."), We have structured the Merger
that the Merger is fair, from a so that neither ANTEC, TSX nor
financial point of view, to the our stockholders will recognize
stockholders of TSX. This opinion any gain or loss for federal
is attached as Appendix B to this income tax purposes in the
Joint Proxy Statement-Prospectus. Merger (except for the payment
We encourage you to read this of certain transfer taxes if any
opinion. Allen & Co. has orally TSX stockholders transfer
confirmed to the TSX Board that, ownership of their stock as part
as of December 30, 1996, it remains of the exchange). We have
the opinion of Allen & Co. that conditioned the Merger on our
receipt of legal opinions that
such is the case. Although the
<PAGE> 13
Plan of Merger allows us to --------------------------------
waive the receipt of the Listing of ANTEC Common Stock
opinions, we will not waive this (see page 43)
condition without first --------------------------------
obtaining your approval.
The shares of ANTEC common
- ------------------------------- stock issued in connection with
No Appraisal Rights the Merger will be listed on the
(see page 72) Nasdaq Stock Market's National
- ------------------------------- Market.
Under Delaware and Nevada --------------------------------
law, neither ANTEC nor TSX Dividends After the Merger
stockholders have any right to --------------------------------
dissent from the Merger and
receive the appraised value of Historically, neither ANTEC
their shares in cash in nor TSX has paid dividends.
connection with the Merger. ANTEC and TSX have had, and
ANTEC will continue to have, a
- ------------------------------- substantial commitment to
Comparative Per Share Market expanding their businesses, and
Price Information (see page 46) that expansion has required the
- ------------------------------- cash that otherwise might be
available for dividends.
Shares of ANTEC and TSX
common stock are listed on the
Nasdaq Stock Market's National
Market. On October 1, 1996, the
last full trading day on the
National Market prior to the
public announcement of the
Merger, ANTEC stock closed at
$15.125 per share and TSX stock
closed at $13.75 per share. On
October 25, 1996, the last full
trading day on the National
Market prior to the public
announcement that the parties
had entered into a definitive
plan of merger, ANTEC stock
closed at $11.875 per share and
TSX stock closed at $9.063 per
share. On December 27, 1996,
ANTEC stock closed at $8.75 per
share and TSX stock closed at
$8.50 per share.
<PAGE> 14
SUMMARY SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
--------------------------------------------------------------
We are providing the following summary financial information to
aid you in your analysis of the financial aspects of the Merger. This
information was derived from our historical financial statements (and
related notes) contained in the annual reports and other information
that we have filed with the SEC and should be read in conjunction with
that information. See "WHERE YOU CAN FIND MORE INFORMATION" on page
82. The historical financial statements for the full years were
audited; those for interim periods were not audited. The unaudited
financial information reflects all adjustments (consisting only of
normal recurring accruals) which are considered necessary to present
fairly the financial information for such periods. The results of
operations for any interim period are not necessarily indicative of
results for a full year, and historical results are not necessarily
indicative of future results.
<PAGE> 15
<TABLE>
<CAPTION>
ANTEC CORPORATION
Nine Months Ended
September 30, Years Ended December 31,
---------------------- --------------------------------------------------------
1996 1995 (1) 1995 (1) 1994 (1) 1993 1992 1991
---- -------- -------- -------- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net sales $ 483,132 $ 489,699 $ 658,237 $ 553,510 $ 427,601 $ 300,974 $ 258,337
Cost of sales 367,919 372,544 504,167 433,898 344,648 242,279 203,877
--------- --------- --------- --------- --------- --------- ---------
Gross profit 115,213 117,155 154,070 119,612 82,953 58,695 54,460
Selling, general and administrative
expenses 85,226 90,705 117,869 77,442 57,830 43,869 44,400
Amortization of goodwill 3,734 3,555 4,817 3,160 2,772 2,757 2,757
Non-recurring items (2) - 21,681 21,681 - - - -
--------- --------- --------- --------- --------- --------- ---------
Operating income 26,253 1,214 9,703 39,010 22,351 12,069 7,303
Other expense (income):
Interest expense and other, net 6,957 8,352 10,972 4,506 3,329 3,479 4,732
Gain on sale of Canadian business(3) (3,835) - - - - - -
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before income tax expense
(benefit) 23,131 (7,138) (1,269) 34,504 19,022 8,590 2,571
Income tax expense (benefit) 11,465 (686) 2,350 15,616 8,972 4,640 2,230
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) $ 11,666 ($6,452) ($3,619) $ 18,888 $ 10,050 $ 3,950 $ 341
========= ========= ========= ========= ========= ========== =========
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital $ 134,100 $ 156,156 $ 130,458 $ 151,104 $ 70,522 $ 49,795 $ 42,460
Total assets 441,742 477,691 456,918 438,017 243,717 205,757 188,420
Long-term debt 109,661 145,922 117,920 125,197 18,000 70,800 57,100
Stockholders' equity 249,498 225,176 237,222 229,746 157,387 80,507 89,118
========= ========= ========= ========= ========= ========= =========
NET INCOME (LOSS) PER COMMON AND COMMON $ 0.50 $ (0.28) $ (0.16) $ 0.89
EQUIVALENT SHARE ========= ========= ========= =========
PRO FORMA INFORMATION (4):
Net income $ 11,545 $ 6,210
========= =========
Net income per common and common
equivalent share:
Primary $ 0.56 $ 0.31
========= =========
Fully diluted $0.55 $ 0.30
========= =========
- ---------------------------------
<FN>
<F1> 1995 and 1994 include the impact of several 1994 strategic acquisitions.
<F2> A non-recurring charge in the third quarter of 1995 resulted from ANTEC's decision to reorganize, streamline and consolidate
its existing businesses in order to reduce costs of operations and to refocus its product and market development activities.
<F3> In the third quarter of 1996, ANTEC sold its Canadian distribution business.
<F4> Pro forma net income and net income per share have been determined assuming the September 1993 initial public offering of
ANTEC had occurred on December 31, 1991, and the proceeds of that initial public offering were used to reduce long-term debt
by approximately $59.6 million and redeem ANTEC preferred stock that was outstanding at that time for approximately $30
million.
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
TSX CORPORATION
Six Months
Ended
October 26/28, Years Ended April 30,
-------------------- -----------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net sales $ 41,380 $ 44,325 $ 92,640 $ 72,421 $ 37,681 $ 34,575 $ 35,500
Cost of sales (2) 25,169 24,812 52,620 42,350 25,548 25,869 24,855
--------- --------- --------- --------- --------- --------- ---------
Gross profit 16,211 19,513 40,020 30,071 12,133 8,706 10,645
Selling, general and administrative expenses 10,325 8,876 18,764 15,355 10,899 11,283 11,970
Unusual items of (income) loss (1)(2) 2,109 - - - (759) 2,743 -
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss) 3,777 10,637 21,256 14,716 1,993 (5,320) (1,325)
Interest expense (income) and other, net (642) (205) (796) 258 1,749 1,562 1,299
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations before
extraordinary gain and income tax expense 4,419 10,842 22,052 14,458 244 (6,882) (2,624)
Income tax expense 958 3,906 5,674 6,006 199 56 18
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations before
extraordinary gain 3,461 6,936 16,378 8,452 45 (6,938) (2,642)
Income (loss) from discontinued operations,
net of tax - - - - (164) 884 1,829
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary gain 3,461 6,936 16,378 8,452 (119) (6,054) (813)
Extraordinary gain, net of tax - - - - 527 - -
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) $ 3,461 $ 6,936 $ 16,378 $ 8,452 $ 408 $ (6,054) $ (813)
========= ========= ========= ========= ========= ========= =========
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital $ 44,178 $ 34,744 $ 42,026 $ 24,087 $ 10,819 $ 13,996 $ 19,491
Total assets 73,473 52,903 69,077 41,536 28,281 28,825 32,759
Long-term debt - - - - - 16,900 17,006
Stockholders' equity 60,253 44,788 55,911 32,675 16,800 3,815 10,031
========= ========= ========= ========= ========= ========= =========
PER SHARE DATA - FULLY DILUTED
Income (loss) from continuing operations
before extraordinary gain $ 0.22 $ 0.43 $ 1.02 $ 0.55 $ 0.01 $ (1.05) $ (0.40)
Income (loss) from discontinued operations - - - - $ (0.02) $ 0.13 $ 0.28
Extraordinary gain - - - - $ 0.06 - -
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) per share $ 0.22 $ 0.43 $ 1.02 $ 0.55 $ 0.05 $ (0.92) $ (0.12)
========= ========= ========= ========= ========= ========= =========
<FN>
- --------------------
<F1> In the second quarter of fiscal 1993, TSX, based on estimates made at that time, anticipated and recorded a
$2.7 million unusual charge to earnings to facilitate, among other things, the consolidation of its El Paso
and Juarez facilities and the consolidation of its advertising insertion and CATV distribution segments.
These estimates were too high, resulting in an unusual item of income in the fourth quarter of fiscal 1994 of
$0.8 million.
<F2> In the second quarter of fiscal 1997, TSX recorded a one-time charge of $3.6 million to effect the downsizing
of its advertising insertion business segment due to the poor performance of the segment's digital
advertising insertion product line. The provision was established primarily to write down assets associated
with the downsizing and to accrue for severance and other related costs. Of the $3.6 million, $2.1 million
was reported as unusual items of expense, while $1.5 million, related to the write-down of inventories, was
reflected as cost of sales.
</TABLE>
<PAGE> 17
SIGNIFICANT EVENTS AFFECTING HISTORICAL RESULTS
-----------------------------------------------
Our companies report quarterly and annual earnings results in
their SEC filings using methods required by generally accepted
accounting principles ("GAAP"). Sometimes the financial results
reported in this way include unusual or infrequent events and
transactions which are not expected to occur regularly in the future.
Unusual or infrequent events and transactions which we believe would
be helpful to review in understanding our companies' past performance
and future prospects are briefly described in the footnotes to the
preceding financial information.
RECENT DEVELOPMENTS
-------------------
We both are heavily dependent on spending for products we sell by
cable television systems in general (approximately 80% of ANTEC's
sales and 100% of TSX's sales reported in our operating results for
our latest years), and by TCI, the largest U.S. cable system operator,
in particular (approximately 19% of ANTEC's sales and 44% of TSX's
sales reported in our operating results for our latest years). Such
spending in the past has not been predictable and currently is
substantially below our most recent expectations.
Technical developments and strategic decisions by cable systems
operators and their competitors will significantly affect our business
and may affect our respective businesses in different ways and to
different degrees. Cable systems are now being bypassed by direct
broadcast satellites services. New digital technologies enable the
compression of many channels into the bandwidth currently used by one
analog channel. TCI and Time Warner Inc., the largest and second
largest operators of cable systems, respectively, have reportedly
placed orders for substantial quantities of new digital set top boxes
which provide additional channels without substantial upgrading of
their systems. Wireless technologies which enable local coaxial
systems to be bypassed are on the horizon. Interactive television is
not developing as rapidly as originally anticipated. For instance, it
was recently reported that three regional telephone companies may be
taking steps to shut down their joint venture for the development of
programming for interactive television in which they had invested
approximately half a billion dollars in the past two years.
More direct in its impact on us was the October 1996 announcement
by TCI that it was temporarily ceasing to accept shipments of the
traditional products we sell while continuing to accept shipments of
digital set top and cable telephony products for demonstration markets
already started. Our near term financial performance will clearly be
adversely affected. Even if normal purchasing resumes sometime next
year, it appears that TCI intends to limit its expenditures for the
coaxial distribution portion of its cable systems. In the past, the
majority of ANTEC's sales to TCI have been for rebuilding, extending
and maintaining this portion of TCI's cable systems. Most of TSX's
<PAGE> 18
sales to TCI have been of products for that portion of the cable
system that is ahead of the coaxial distribution system. We are
unable to predict when, if at all, TCI will once again begin accepting
shipment of our products, or on which products TCI or our other
customers will concentrate their purchases. Also unknown is the
result of the ongoing negotiations on the continuation of ANTEC's
arrangement to provide material handling services to TCI. See
"CERTAIN AGREEMENTS WITH TCI--Customer Agreements."
Late in the second quarter of fiscal 1997, which ended
October 26, 1996, TSX management established a downsizing plan to
address the diminished marketability and profitability of its
advertising insertion segment s digital ad insertion product line.
Due to technical problems and the sizable resources that would be
required to ensure the continued viability of this product line, the
downsizing plan redefined the segment's product offering and scope of
operations. Effective with the third quarter of fiscal 1997, the
segment no longer manufactured or actively marketed a digital ad
insertion product line although it will continue to accept orders for
less significant product lines. A result of the downsizing plan was
a reduction in the segment's work force by December 30, 1996, of
approximately fifty employees, with eight employees remaining
primarily to provide on-going support and service for the segment's
customer base. The downsizing plan is intended to eliminate all or
substantially all of the operating losses this segment has been
experiencing and charges resulting from the establishment of the plan
were included in TSX's second quarter of fiscal 1997. Included in the
charges is a $1.1 million write-down of trade receivables due to
payment disputes regarding satisfactory resolution of digital ad
insertion product technical problems. These disputes appear to have
been prompted or exacerbated by TSX's announced intention to stop
selling these products. After the downsizing announcements,
management believed its relationship with some customers and the
collectibility of those accounts receivable to be significantly
impaired.
As a result of the Merger, ANTEC expects to achieve cost savings
through the consolidation and elimination of certain duplicative
functions and operational and logistical efficiencies. In making
these changes, ANTEC intends to take into account the reduction in
sales and sales expectations caused by the actions of TCI and others.
No adjustment has been made in the pro formas presented in this Joint
Proxy Statement-Prospectus for the charges which will be incurred by
ANTEC in connection with these changes. The extent of these changes
and therefore the amount of the charge have not yet been determined.
Other factors which could affect our future performance are discussed
in the annual reports and other information that we have filed with
the SEC. See "WHERE YOU CAN FIND MORE INFORMATION" on page 82.
<PAGE> 19
SUMMARY SELECTED UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
--------------------------------------------
We expect that the Merger will be accounted for as a "pooling of
interests," which means that for accounting and financial reporting
purposes we will treat our companies as if they had always been
combined. For a more detailed description of pooling of interest
accounting see "THE MERGER--Accounting Treatment" on page 39.
We have presented below unaudited pro forma consolidated
financial information that reflects the pooling of interests method of
accounting and is intended to give you a better picture of what our
businesses might have looked like had they always been combined.
Since TSX's and ANTEC's fiscal years end more than 93 days apart
(TSX's on April 30 and ANTEC's on December 31), in order to meet the
reporting requirements for pro forma presentation, the amounts used
for TSX are amounts for the twelve months ended the last Saturday in
October 1995, 1994, and 1993, and for the nine months ended the last
Saturday in July 1996 and 1995. The companies would have performed
differently had they been combined, and you should not rely on the pro
forma information as being indicative of the historical results that
we would have achieved or the future results that we will experience
after the Merger. The information below does not reflect cost savings
that are expected as a result of the Merger or the charges that will
be incurred to implement such savings. The information reflects the
favorable income tax rate achieved by TSX in the quarter ended July
27, 1996, which ANTEC may not be able to maintain after the Merger.
See "PRO FORMA FINANCIAL INFORMATION" on page 73.
<PAGE> 20
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Nine Months Ended
September 30, Years Ended December 31,
--------------------------- ----------------------------------------------
1996 1995 1995 1994 1993
---- ---- ---- ---- ----
(In thousands except per share data)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA: (1)
Net sales $ 550,220 $ 546,767 $ 738,235 $ 601,903 $ 459,828
Cost of sales 404,986 402,842 546,948 462,963 366,678
--------- --------- --------- --------- ---------
Gross profit 145,234 143,925 91,287 138,940 93,150
Operating expenses:
Selling, general and
administrative expenses 100,305 103,012 134,689 90,011 67,990
Amortization of goodwill 3,734 3,555 4,817 3,160 2,772
Non-recurring items (2) - 21,681 21,681 - -
--------- --------- --------- --------- ---------
104,039 128,248 161,187 93,171 70,762
--------- --------- --------- --------- ---------
Operating income 41,195 15,677 30,100 45,769 22,388
Other expense (income):
Interest expense (income)
and other, net 6,078 8,265 10,801 5,527 5,020
Gain on sale of Canadian
business (3) (3,835) - - - -
--------- --------- -------- --------- ---------
Income from continuing operations before
income tax expense 38,952 7,412 19,299 40,242 17,368
Income tax expense 14,348 5,177 10,497 17,526 9,098
--------- --------- --------- --------- ---------
Income from continuing operations $ 24,604 $ 2,235 $ 8,802 $ 22,712 $ 8,270
========= ========= ========= ========= =========
Pro forma income from continuing operations (4) $ 9,765 (4)
=========
Income from continuing operations per common
and common equivalent share:
Primary $ 0.62 $ 0.06 $ 0.23 $ 0.62 $ 0.36 (4)
========= ========= ========= ========= =========
Fully diluted $ 0.62 $ 0.06 $ 0.23 $ 0.62 $ 0.35 (4)
========= ========= ========= ========= =========
Weighted average common and
common equivalent shares:
Primary 39,663 39,039 38,417 36,745 27,325
========= ========= ======== ======== =========
Fully diluted 39,663 39,039 38,417 36,745 27,556
========= ========= ======== ======== =========
BALANCE SHEET DATA (AT END OF PERIOD) (1)(5):
Working capital $ 178,459
Total assets 511,449
Long-term debt 109,661
Total stockholders' equity 306,325
- --------------------
<FN>
<F1> Certain amounts in the historical financial statements of TSX have been reclassified to conform to ANTEC's presentation in
the pro forma combined presentation.
<F2> A non-recurring charge in the third quarter of 1995 resulted from ANTEC's decision to reorganize, streamline and
consolidate its existing business in order to reduce costs of operations and to refocus its product and market development
activities.
<F3> In the third quarter of 1996, ANTEC sold its Canadian distribution business.
<F4> Pro forma net income and net income per share have been determined assuming the September 1993 initial public offering of
ANTEC had occurred on December 31, 1991, and the proceeds of that initial public offering were used to reduce long-term
debt by approximately $59.6 million and redeem all of the ANTEC preferred stock for approximately $30 million.
<F5> Reflects $5.4 million ($3.2 million net of tax) for the estimated liability for currently known fees and other expenses
related to the Merger.
</TABLE>
<PAGE> 21
COMPARATIVE PER SHARE DATA
--------------------------
The following table sets forth certain book value and earnings
per share data for ANTEC Corporation and TSX Corporation on a
historical and pro forma combined basis. The pro forma earnings per
share data is derived from the Unaudited Pro Forma Consolidated
Financial Information appearing elsewhere in this Proxy Statement-
Prospectus, which gives effect to the Merger as a pooling of interests
as if the Merger had been consummated at the beginning of the earliest
period presented. The information set forth below should be read in
conjunction with the Summary Selected Historical Consolidated
Financial Information of ANTEC Corporation and TSX Corporation and the
Unaudited Pro Forma Consolidated Financial Information, including the
notes thereto, appearing elsewhere in this Proxy Statement-Prospectus
and the consolidated financial statements of ANTEC Corporation and TSX
Corporation included in documents incorporated by reference in this
Proxy Statement-Prospectus. See "WHERE YOU CAN FIND MORE
INFORMATION".
<TABLE>
<CAPTION>
ANTEC Corporation TSX Corporation (1)
--------------------------- ------------------------------
Pro Forma Pro Forma
Historical Combined Historical Equivalent (2)
---------- --------- ---------- --------------
<S> <C> <C> <C> <C>
Book value per share as of:
September 30, 1996 $10.90 $8.00 $3.90 $8.00
December 31, 1995 $10.36 $7.30 $2.92 $7.30
Income from continuing operations per common
and common equivalent share: (3)
For the nine months ended:
September 30, 1996
Primary $0.50 $0.62 $0.80 $0.62
Fully diluted $0.50 $0.62 $0.80 $0.62
September 30, 1995
Primary ($0.28) $0.06 $0.54 $0.06
Fully diluted ($0.28) $0.06 $0.54 $0.06
For the years ended:
December 31, 1995
Primary ($0.16) $0.23 $0.77 $0.23
Fully diluted ($0.16) $0.23 $0.77 $0.23
December 31, 1994
Primary $0.89 $0.62 $0.25 $0.62
Fully diluted $0.89 $0.62 $0.25 $0.62
December 31, 1993
Primary $0.56 $0.36 ($0.27) $0.36
Fully diluted $0.55 $0.35 ($0.27) $0.35
- --------------------
<FN>
<F1> All per share data reflected herein give effect to the TSX stock splits.
<F2> The equivalent pro forma per share data for TSX is computed by multiplying ANTEC's pro forma per share
information by 1.00, the assumed conversion number.
<F3> The reporting requirements governing the preparation of pro forma financial information require that they be
prepared using fiscal years that end within 93 days of each other. TSX's fiscal year ends April 30, and
ANTEC's fiscal year ends December 31. As a result, TSX's historical statements of operations had to be
adjusted to within 93 days of ANTEC's year end. Therefore, the unaudited pro forma condensed consolidated
statements of operations for the years ended December 31, 1995, 1994 and 1993, represent ANTEC's fiscal years
that ended on those dates combined with TSX's twelve months ended the last Saturday in October 1995, 1994 and
1993, respectively. The unaudited pro forma condensed consolidated statement of operations for the nine
months ended September 30, 1996 and 1995 represents ANTEC's nine months ended September 30, 1996 and 1995,
combined with TSX's nine months ended the last Saturday in July 1996 and 1995, respectively.
</TABLE>
<PAGE> 22
SPECIAL MEETINGS OF STOCKHOLDERS
--------------------------------
We are sending you this Joint Proxy Statement-Prospectus in order
to provide you with important information regarding the Merger and to
solicit your proxy for use at the special meetings (and any
adjournments or postponements thereof). The special meetings are
scheduled to be held at the times and places described in the
Presidents' letter that begins this Joint Proxy Statement-Prospectus,
and this document also serves as the official notice of those
meetings. Both ANTEC and TSX have established December 23, 1996, as
the Record Date for their respective meetings. Only stockholders of
record of ANTEC and TSX common stock on the Record Date are entitled
to attend and vote at the special meetings.
Purposes
- --------
ANTEC. At their special meeting (and any adjournments or
postponements thereof), the stockholders of ANTEC will be asked (a) to
approve the Plan of Merger, including the issuance of ANTEC common
stock to TSX's stockholders, and (b) to consider such other business
as may properly be presented at the special meeting.
TSX. At their special meeting (and any adjournments or
postponements thereof), the stockholders of TSX will be asked (a) to
approve the Plan of Merger, and (b) to consider such other business as
may properly be presented at the meeting.
Each copy of this Joint Proxy Statement-Prospectus that is being
sent to stockholders is accompanied by an appropriate proxy card.
Voting Rights; Votes Required for Approval
- ------------------------------------------
ANTEC. On the Record Date, there were 22,996,056 shares of ANTEC
common stock outstanding and entitled to vote at the ANTEC special
meeting, held by approximately 461 stockholders of record. Each of
these holders is entitled to cast one vote per share. The presence,
in person or by proxy, of the holders of a majority of the outstanding
shares is necessary to constitute a quorum at the ANTEC special
meeting. The affirmative vote, in person or by proxy, of the holders
of a majority of the shares of ANTEC common stock present and entitled
to vote at the special meeting is required to approve the Merger and
the issuance of ANTEC common stock to TSX's stockholders.
As of the Record Date, Anixter International Inc. ("Anixter")
owned 7,113,500 shares of ANTEC common stock, or approximately 31% of
the shares entitled to vote at the ANTEC special meeting. Pursuant to
the Anixter Voting Agreement, Anixter has agreed to vote all of its
shares of ANTEC common stock in favor of the approval of the Merger.
See "VOTING AGREEMENTS."
<PAGE> 23
TSX. On the Record Date, there were approximately 15,423,726
shares of TSX common stock outstanding and entitled to vote at the TSX
special meeting, held by approximately 305 stockholders of record,
including participants in security position listing. Each of these
holders is entitled to cast one vote per share. The presence, in
person or by proxy, of the holders of a majority of the outstanding
shares is necessary to constitute a quorum at the TSX special meeting.
The affirmative vote, in person or by proxy, of the holders of a
majority of the shares of TSX common stock outstanding on the Record
Date is required to approve the Plan of Merger.
As of the Record Date, TCI owned 6,327,000 shares of TSX common
stock, or approximately 41% of the shares entitled to vote at the TSX
special meeting. Pursuant to the TCI Voting Agreement, TCI has agreed
to cause all of its shares of TSX common stock to be voted in favor
of the approval of the Plan of Merger. See "VOTING AGREEMENTS."
Voting and Revocation of Proxies
- --------------------------------
All shares of common stock represented at the special meetings by
properly executed proxies will be voted in accordance with the
instructions indicated in such proxies, except to the extent such
proxies are revoked in advance of a vote. IF A STOCKHOLDER SIGNS AND
RETURNS A PROXY WITHOUT VOTING INSTRUCTIONS, AND THE PROXY IS NOT
REVOKED, THE PROXY WILL BE VOTED FOR THE APPROVAL OF THE PLAN OF
MERGER. Broker non-votes (i.e., shares held by brokers or nominees
which are represented at a meeting but with respect to which the
broker or nominee is not empowered to vote on a particular proposal)
and abstentions will be treated as shares that are present for
purposes of determining the presence of a quorum. However, broker
non-votes and abstentions will not be counted as votes cast for or
against the proposal to approve the Plan of Merger and, as a result,
will have the same effect as votes cast against the Merger in the case
of TSX and will not have any effect in the case of ANTEC.
A stockholder may revoke his or her proxy at any time in advance
of a vote by delivering to the Secretary of ANTEC or TSX, as the case
may be, a signed notice of revocation or a later-dated signed proxy or
by attending the applicable special meeting and voting in person.
Attendance at a special meeting will not, in and of itself, constitute
the revocation of a proxy.
Solicitation of Proxies
- -----------------------
We will each bear our own expenses of soliciting proxies from our
stockholders for our respective special meetings. In addition to
solicitation by use of the mails, our directors, officers and
employees may solicit proxies in person or by telephone, telegram or
by any other means of communication. These individuals will not
receive any special compensation for soliciting proxies, but they will
be reimbursed for their out-of-pocket expenses. In addition, Morrow &
<PAGE> 24
Co. has been retained to assist in solicitation for a fee of $4,000
plus expenses.
Other Matters
- -------------
In the event that insufficient votes in favor of the Merger are
received prior to the scheduled meeting dates, we may decide to
postpone or adjourn the special meetings, in which event the proxies
that have been received that either have been voted for the Merger or
contain no instructions will be voted for adjournment. We are not
aware of any business to be brought before the respective special
meetings other than that described herein. If, however, other matters
are properly brought before either of the special meetings or any
adjournments or postponements thereof, the persons appointed as
proxies will have discretionary authority to vote the shares
represented by properly executed proxies in accordance with their
discretion and judgment as to the best interests of the corporation
with respect to which the proxies have been granted.
THE MERGER
----------
Background of Merger
- --------------------
Our two companies first discussed a business combination in
September 1994. These discussions began with a conversation between
Larry Romrell, a director of TSX and an executive officer of TCI, and
John Egan, the chief executive officer of ANTEC, on the benefits of
combining our two companies. After the receipt of some information
from TSX, ANTEC proposed that the parties explore the merger of TSX
into ANTEC on the basis of approximately .22 of a share of ANTEC
common stock for each share of TSX common stock. TSX rejected this
proposal. Although TSX did not make a specific counterproposal, it
was clear to both of us that we were too far apart on the value of TSX
to bridge the gap by further exploration, and the discussions were
terminated.
In connection with these discussions, TSX consulted with its
financial advisor, Allen & Co. After termination of the discussions
with ANTEC, with the assistance of Allen & Co., TSX periodically
explored potential acquisitions and possible business combinations
with other parties.
On or about April 28, 1996, William Lambert, the chief executive
officer and a director of TSX, and another director of TSX met with
the chief executive officer of General Instrument to discuss a
possible business combination with TSX. Mr. Lambert subsequently had
three telephone conversations with the chief executive officer of
General Instrument, but the discussions were limited to general terms
and no specifics concerning a possible price or other details were
<PAGE> 25
ever discussed. By June 1996, the discussions between parties had not
progressed and the discussions with General Instrument concerning a
potential business combination with TSX terminated.
In July 1996, Mr. Lambert received information from a third party
that Harmonic Lightwave ("HLIT") might be interested in a possible
merger with TSX. A director of TSX met with the chief executive
officer and a director of HLIT in August 1996. On August 21, 1996,
Mr. Lambert and the chief executive officer of HLIT met to discuss the
potential merger of TSX and HLIT. On August 22, 1996, Mr. Lambert, a
director of TSX, the chief executive officer of HLIT, two directors of
HLIT and the chief executive officer of TCI met to discuss the
potential merger of HLIT with TSX. The parties discussed the possible
business combination in general terms only, and no price or other
specifics were ever discussed. Following this meeting, Mr. Lambert, a
director of TSX and the chief executive officer of TCI privately met
to discuss the potential benefits and disadvantages of the potential
merger with HLIT. They determined that there were significant
difficulties to a merger of HLIT and TSX, which included the different
corporate cultures and disparity of price to earnings ratios. Mr.
Lambert subsequently met with the chairman of HLIT in San Jose,
California on September 16, 1996, and, after the meeting, concluded
that the disadvantages of any proposed merger with HLIT outweighed the
potential benefits of the merger with HLIT.
In August 1996, the benefits of combining ANTEC and TSX were
again raised in a conversation between Messrs. Romrell and Egan. Mr.
Egan promptly contacted Mr. Lambert, and in mid-August, we started
exchanging information about our businesses pursuant to a
confidentiality agreement. During the next four weeks, we analyzed
this information, discussed with the individual members of our
respective boards of directors the possibility of a transaction, and
explored whether there was an exchange ratio which would be mutually
acceptable. In mid-September, we concluded that, based on the
available information, an exchange ratio of 1.05 shares of ANTEC
common stock for each share of TSX common stock would be mutually
acceptable.
At this point, our counsel began preparation of the necessary
documentation, and ANTEC retained an investment banker to assist it in
the review and analysis of the proposed merger. On September 26,
1996, after the TSX Board had met to consider the proposed merger, we
executed an agreement which prohibited us for the next fifteen
business days from exploring alternate transactions with anyone else.
On October 2, we issued a public announcement that we were discussing
a possible merger based on an exchange ratio of 1.05 shares of ANTEC
common stock for each share of TSX common stock. Subsequent to this
announcement, we conducted on-site due diligence and further
negotiated the terms of the proposed merger. Also in October 1996,
TCI announced that it was temporarily ceasing to accept shipments of
the traditional products we sell while continuing to accept shipments
of digital set top and cable telephony products.
<PAGE> 26
Pursuant to the investment agreement which TSX entered into at
the time TCI invested in TSX, TCI has the ability to veto certain
significant transactions by TSX including changes of control of TSX.
TCI therefore had the ability to block the proposed Merger. As a
consequence, ANTEC confirmed with TCI that it supported the proposed
Merger and secured from TCI its agreement to vote its shares in favor
of the proposed Merger. To obtain the consent of the TSX Board to this
agreement with TCI (as potentially required by TSX's charter), ANTEC
was required to obtain for the benefit of TSX a similar agreement from
Anixter, ANTEC's largest stockholder, to vote its shares in favor of
the Merger. See "CERTAIN RELATED AGREEMENTS WITH TCI--Investment
Agreement," "VOTING AGREEMENTS" and "COMPARISON OF RIGHTS OF HOLDERS
OF TSX COMMON STOCK AND ANTEC COMMON STOCK--Required Vote For Certain
Business Combinations and Other Anti-Takeover Provisions."
Our boards of directors, which had been consulted informally
throughout the discussion and negotiation process, met formally in the
case of TSX on September 26, October 8 and October 26, 1996, and in
the case of ANTEC on October 16 and 25, 1996, to consider the proposed
Merger. The reasons for their approval of the Merger and the fairness
opinion obtained by TSX's Board in connection therewith are described
below. On October 28, 1996, we executed the agreements providing for
the Merger and issued a press release announcing that we had done so.
The negotiation of the terms of the Merger was an evolving
process from the beginning to the final Board meetings. The principal
negotiators were Messrs. Egan and Lambert. The final exchange ratio
of one share of ANTEC common stock for each share of TSX common stock
was not agreed upon until we had completed our due diligence and were
aware of TCI's decision to temporarily cease accepting shipments of
the traditional products we sell.
Recommendation of the ANTEC Board;
ANTEC's Reasons for the Merger
- ----------------------------------
At both formal meetings of the ANTEC Board, at which the ANTEC
Board received presentations by ANTEC senior management and its legal
and financial advisors regarding the Merger, and during informal
discussions with senior management and its advisors, the ANTEC Board
considered the Merger and its possible benefits and detriments. Based
upon this consideration, the ANTEC Board determined that the Merger
was in the best interests of ANTEC and its stockholders and approved
the Plan of Merger, the issuance of ANTEC common stock in the Merger,
and the related transactions. THE ANTEC BOARD UNANIMOUSLY RECOMMENDS
THAT HOLDERS OF ANTEC COMMON STOCK VOTE FOR THE PLAN OF MERGER AND THE
ISSUANCE OF ANTEC COMMON STOCK IN THE MERGER.
In reaching its determination to approve the Merger and to
recommend that ANTEC's stockholders approve the Plan of Merger and the
issuance of ANTEC common stock in the Merger, the ANTEC Board
considered a number of factors, including those listed below. In view
of the wide variety of factors considered by the ANTEC Board in
<PAGE> 27
connection with its evaluation of the Merger, and the complexity of
those matters, the ANTEC Board did not consider it practicable to, nor
did it attempt to, quantify or otherwise assign relative weights to
the specific factors it considered in reaching its determination.
BROADENED PRODUCT OFFERING. TSX's primary products are optical
nodes and distribution amplifiers. ANTEC currently sells only limited
quantities of these products and those it does sell are manufactured
by others. As a result, ANTEC's offering of hybrid fiber/coax
products is not as comprehensive as its principal competitors. We
believe that the combination of the two companies will enhance the
opportunity which would otherwise be available to sell not only
ANTEC's current hybrid fiber/coax products, but TSX's products as
well.
COMPLEMENTARY TERRITORIAL COVERAGE. Approximately one-half of
TSX's sales are foreign sales, and it has only one significant
domestic customer, TCI. In contrast, less than 15% of ANTEC's sales
are foreign sales, and, although TCI is also its largest customer,
ANTEC has a relatively diversified customer base in the United States.
These complementary coverages should create opportunities for the
combined enterprise that do not exist for either ANTEC or TSX
separately.
MANUFACTURING FACILITIES. TSX has a state-of-the-art
manufacturing facility in Juarez, Mexico that has significant excess
capacity. ANTEC believes that this excess capacity can be utilized to
manufacture products which ANTEC currently is purchasing from others
or having others manufacture for it.
COST SAVINGS. In addition to the reduced costs which would
result from the matters discussed above, there are duplicate
facilities and personnel which can be eliminated by combining the two
companies. Further, the cash which TSX will have available after
payment of costs associated with the Merger can be utilized to reduce
ANTEC's revolving debt which carries a higher rate than the rate which
can be earned on the cash from short-term investments.
ENHANCED RELATIONSHIP WITH LARGEST CUSTOMER. TCI, the largest
operator of cable systems, is the largest customer of both TSX and
ANTEC. It is believed that as the result of the combined enterprise
being an even more important supplier to TCI and the only one in which
it has significant financial interest, the combined enterprise will
have greater opportunities to expand the business it does with TCI.
It is further believed that these benefits will outweigh the
disadvantage of being so dependent on one customer and the concerns
other customers may have about the relationship between TCI and the
combined enterprise.
ANTEC'S BUSINESS, CONDITION AND PROSPECTS. The ANTEC Board
considered information with respect to the financial condition,
results of operations and business prospects of ANTEC, as well as
current industry, economic and market conditions, and the likely
<PAGE> 28
implications of the Merger for ANTEC's business. In evaluating
ANTEC's prospects, the ANTEC Board considered ANTEC's competitive
position and the challenges facing its businesses, including increased
competition for the services provided by its customers, particularly
by DBS, and the implications of that competition on capital spending
by the cable industry. The Board also considered the implications of
the recent decision by TCI to temporarily suspend purchases of certain
equipment from vendors.
TSX'S BUSINESS, CONDITION AND PROSPECTS. In evaluating the
Merger, the ANTEC Board considered information with respect to the
financial condition, results of operations and business prospects of
TSX and current industry, economic and market conditions as they would
be likely to affect TSX. The ANTEC Board considered the segment in
which TSX primarily operates--and reviewed the performance of TSX and
its prospects for growth in these segments. The Board also considered
the implications of the recent decision by TCI to reduce its purchases
from vendors.
PRO FORMA IMPACT ON ANTEC. The ANTEC Board considered
information relating to the pro forma impact under pooling of
interests accounting of a combination of ANTEC with TSX on the
financial condition and results of operations of the combined entity.
The ANTEC Board also considered the circumstances under which the
issuance of additional stock in connection with the Merger would be
dilutive on the earnings per share of the combined entity.
STOCK AS THE CONSIDERATION. The ANTEC Board reviewed the
historical market prices of the ANTEC and TSX common stocks and
considered how development in their markets would affect the two
companies. It was concluded that the future events would not
significantly alter the relative value of the two companies.
CONDITIONS AND TERMINATION PROVISIONS. The ANTEC Board reviewed
the conditions to consummation of the Merger and the circumstances
under which ANTEC or TSX would have the right to terminate the Plan of
Merger. In that connection, the ANTEC Board considered the provisions
of the Plan of Merger that prohibit TSX and ANTEC from soliciting or
encouraging other acquisition proposals or from negotiating with any
third parties with respect to other proposals. The ANTEC Board also
considered the terms and conditions of the TCI Voting Agreement,
pursuant to which TCI, which currently owns approximately 41% of TSX's
common stock (and has options to purchase approximately 854,000 shares
of TSX common stock), would agree to vote all such shares in favor of
the Merger. The ANTEC Board also reviewed the various amounts that
might be payable by or to ANTEC if the Plan of Merger is terminated
under certain circumstances. See "VOTING AGREEMENTS," "THE PLAN OF
MERGER--Termination of the Plan of Merger" and "--Effect of
Termination."
CERTAIN STOCKHOLDER MATTERS. The ANTEC Board, in evaluating the
Merger, also considered the effect that the Merger would have on the
<PAGE> 29
composition of the stockholder body of ANTEC relative to its
composition before the Merger.
MANAGEMENT'S RECOMMENDATION. The ANTEC Board heard presentations
from, and discussed the terms and conditions of the Merger with,
senior management of ANTEC and representatives of its legal counsel
and financial advisors. The ANTEC Board considered senior
management's view of the strategic rationale for the Merger and the
potential opportunities that would be created by the combination of
the two companies.
Recommendation of the TSX Board;
TSX's Reasons for the Merger
- --------------------------------
At the meeting of the TSX Board held on September 26, 1996, the
TSX Board met with the senior management of TSX and its legal and
financial advisors regarding the Merger. At its meeting beginning on
October 26, 1996, and completed on October 28, 1996, the TSX Board
received and considered presentations of the senior management and its
legal and financial advisors regarding the Merger, and the TSX Board
unanimously approved the Merger, Plan of Merger and other related
transactions. At a meeting held on December 31, 1996, the TSX Board
was advised by Allen & Co. that it remains the opinion of Allen & CO.,
based upon and subject to the matters expressed in the written opinion,
that the Merger is fair to the TSX stockholders from a financial point
of view. See discussion below "--Opinion of TSX's Financial Advisor."
At both meetings, the TSX Board determined that the Merger was in the
best interests of the stockholders of TSX. THE TSX BOARD UNANIMOUSLY
RECOMMENDS THAT HOLDERS OF TSX COMMON STOCK VOTE FOR THE MERGER.
In reaching its determination to approve the Merger, the TSX
Board considered a number of factors, including those listed below.
In view of the wide variety of factors considered by the TSX Board in
connection with its evaluation of the Merger, and the complexity of
those matters, the TSX Board did not consider it practicable to, nor
did it attempt to, quantify or otherwise assign relative weights to
the specific factors it considered in reaching its determination.
TSX'S BUSINESS, CONDITION AND PROSPECTS. In evaluating the terms
of the Merger, the TSX Board considered information with respect to
the historical growth and financial condition, results of operations
and business prospects of TSX, as well as current industry, economic
and market conditions. In evaluating TSX's prospects, the TSX Board
considered the continued strength of TSX's operations, as well as the
<PAGE> 30
challenges facing its businesses, including the effects of new
technological developments, such as DBS, which have created greater
competition for cable television systems than was expected, the
concentration of sales to TCI over the past years, the uncertainty of
the implication of the recent decision by TCI to temporarily suspend
purchases of certain equipment from vendors, and the effect of
increased competition in TSX's international market, which for the
first time in the last three fiscal years reflected a reduced demand
in fiscal 1996.
ANTEC'S BUSINESS, CONDITION AND PROSPECTS. In evaluating the
Merger, the TSX Board considered information with respect to the
financial condition, results of operations and business prospects of
ANTEC, on both an historical and prospective basis, and current
industry, economic and market conditions as they would be likely to
affect ANTEC.
BENEFITS OF A COMBINATION. The TSX Board reviewed the potential
benefits of a combination of the two companies. The senior management
of TSX discussed with the TSX Board the current operations of ANTEC
and the opportunities that would be created for the benefit of TSX
stockholders from the combination of the two companies, including the
utilization of current manufacturing capacity of TSX to replace
significant product purchases by ANTEC from other manufacturers and
reduction of TSX's present concentration of sales to TCI. The TSX
Board discussed with the senior management how assets of ANTEC would
complement TSX's existing assets and provide opportunities for revenue
enhancements and cost savings, including opportunities for cross
promotion and improved distribution of TSX products through ANTEC's
more extensive marketing capabilities. The TSX Board also noted that
the substantial cash reserves of TSX would be available, after the
combination of the companies, to reduce ANTEC debt, which the TSX
Board expected to have a positive effect, for the benefit of the
combined stockholder group, on ANTEC's cash flow, credit standing,
balance sheet and earnings.
OPINION OF FINANCIAL ADVISOR. At its meeting on October 26,
1996, the TSX Board considered as favorable to its determination the
oral opinion rendered by Allen & Co., subsequently confirmed in
writing, that, as of October 26, 1996, and based upon and subject to
matters expressed in that opinion, the Merger was fair, from a
financial point of view, to the stockholders of TSX. The written
opinion of Allen & Co. is attached to this Joint Proxy Statement-
Prospectus as Appendix B. As discussed above and also discussed below
under "--Opinion of TSX's Financial Advisor," Allen & Co. has orally
confirmed to the TSX Board that, as of December 30, 1996, it remains
the opinion of Allen & Co. that, based upon and subject to the matters
expressed in the opinion, the Merger is fair, from a financial point of
view, to the stockholders of TSX.
In connection with its consideration of the opinion of Allen &
Co., the TSX Board noted that the premium represented by the value to
<PAGE> 31
be received in the Merger per share of TSX common stock over the price
per share of TSX common stock one day prior to the October 26, 1996
(the date of the Allen & Co. opinion), was 31%. The TSX Board noted
that the premium compared favorably to the premiums paid in certain
selected stock-for-stock merger and acquisition transactions reviewed
by Allen & Co. in connection with its opinion. The TSX Board also
noted that Allen & Co. had concluded in its analysis that the value to
be received by holders of TSX common stock in the Merger was within
the reference range of multiples of certain financial information
analyzed by Allen & Co. for selected cable equipment manufacturing and
distribution companies whose securities are publicly traded (comprised
of ANTEC, Scientific-Atlanta, Inc., General Instrument Corporation, C-
Cor Electronics, Inc., Augat, Inc., Amphenol Corporation, and Oak
Industries, Inc.). The TSX Board took into account the historical
market prices and recent trading activity of the TSX common stock and
considered information included in the analysis of Allen & Co.
regarding the historical market prices of the ANTEC common stock and
the selected cable equipment manufacturing and distribution companies
listed above. The TSX Board noted that Allen & Co. had found in its
analysis that the value to be received by holders of TSX common stock
in the Merger was within the reference range of multiples paid in
selected acquisitions or combinations involving other companies in
various segments of the communications equipment industry.
The TSX Board considered information analyzed by Allen & Co.
relating to the pro forma impact of a combination of TSX and ANTEC on
the financial condition and results of operations of the combined
entity and the likely effect of the issuance of additional ANTEC
common stock in the Merger on earnings per share and cash flow of the
combined entity. The TSX Board also considered the relative
contribution by TSX and ANTEC to the combined company with respect to
revenues, gross profit, earnings, net income, total assets, book value
and other values, as analyzed by Allen & Co., and the calculation by
Allen & Co. of the range of present values of a share of TSX common
stock utilizing a discounted cash flow methodology, which showed that
the value of the consideration to be received by stockholders of TSX
in the Merger per share of TSX common stock was within the range of
per share present values calculated by Allen & Co.
LACK OF OTHER PROPOSALS. In evaluating the Merger, the TSX Board
also considered that no other parties had proposed or expressed an
interest in exploring a business combination with TSX from the period
commencing with the October 2, 1996, joint announcement by ANTEC and
TSX that they were in discussions regarding a possible business
combination through the October 28, 1996, meeting of the TSX Board.
In light of the fact that the Merger represented a unique strategic
combination for TSX, the TSX Board did not solicit other indications
of interest from third parties with respect to the possible
acquisition of TSX or any of its businesses, nor did it authorize or
instruct its financial advisors to solicit any such indications of
interest.
<PAGE> 32
CONDITIONS AND TERMINATION PROVISIONS. The TSX Board reviewed
the conditions to consummation of the Merger and the circumstances
under which TSX or ANTEC would have the right to terminate the Plan of
Merger. In that connection, the TSX Board considered the provisions
of the Plan of Merger that prohibit ANTEC and TSX from soliciting or
encouraging other acquisition proposals or, subject to the fiduciary
duties of the Boards, from negotiating with any third parties with
respect to other proposals. The TSX Board also considered the terms
of the Anixter Voting Agreement, pursuant to which Anixter, which
beneficially owns approximately 31% of ANTEC's common stock, would
agree to vote all such shares in favor of the Merger. The TSX Board
also reviewed the various amounts that might be payable by or to TSX
if the Plan of Merger is terminated under certain circumstances. See
"THE PLAN OF MERGER--Termination of the Plan of Merger" and "--Effect
of Termination."
ABILITY OF SHAREHOLDERS OF TSX TO OBTAIN A CONTINUING EQUITY
INTEREST IN ANTEC. The TSX Board considered that, pursuant to the
terms of the Merger, holders of TSX Common Stock will receive equity
securities of ANTEC, thus enabling TSX stockholders to participate in
the value that may be generated through the combination of the two
companies through their combined equity participation as stockholders
of ANTEC, while realizing the immediate premium for their TSX shares
and obtaining tax-free treatment. The TSX Board also considered that
ANTEC will have considerably greater market capitalization and public
float than TSX, thus providing TSX stockholders with enhanced
liquidity.
The TSX Board considered the fact that the Plan of Merger does
not contain any provisions that either limit the effect of changes in
the price of ANTEC common stock prior to the consummation of the
Merger on the value of the consideration to be received by the holders
of TSX common stock in the Merger or permit TSX to terminate the Plan
of Merger based upon such changes and that, accordingly, the value of
such consideration could change depending upon the performance of
ANTEC common stock between the execution of the Plan of Merger and the
consummation of the Merger. While recognizing that the absence of
such provisions exposed the TSX stockholders to some risk, the TSX
Board considered this risk to be mitigated by (a) a review of the
historical trading prices of both the ANTEC common stock and the TSX
common stock and the fact that, generally, industry changes affecting
ANTEC common stock should similarly affect TSX common stock and (b)
the fact that TSX stockholders would be able to participate in any
appreciation in the value of ANTEC common stock between the
announcement of the transaction and the consummation of the Merger.
The TSX Board recognized that, while such provisions might provide
limited protection against declines in the share price of the ANTEC
common stock to be received, they also generally would limit the
benefits from any appreciation in that price. The TSX Board also was
advised that ANTEC had stated that it would not consider a transaction
involving anything other than a fixed exchange ratio.
<PAGE> 33
The TSX Board also considered that the voting power of TSX is
currently concentrated in TCI and that, by virtue of the existing TCI
Investment Agreement, TCI has the ability to veto certain significant
transactions, including certain changes of control of TSX. In
evaluating the Merger, the TSX Board reviewed the pro forma stock
ownership of ANTEC following the Merger and considered the fact that,
although TCI and Anixter would each be significant stockholders, no
single stockholder would control ANTEC and that stockholders of TSX
who become stockholders of ANTEC would retain the potential for
obtaining a premium for their shares in the event of any subsequent
change of control of ANTEC, although the TSX Board also considered the
fact that the total capitalization of ANTEC after the consummation of
the Merger would limit the number of potential purchasers of ANTEC.
MANAGEMENT'S RECOMMENDATION. The TSX Board received and reviewed
presentations from, and discussed the terms and conditions of the
Merger with, senior executive officers of TSX. The TSX Board
considered senior management's view of the strategic rationale for the
Merger and the potential growth opportunities that would be created by
the combination of the two companies. The TSX Board considered the
view of senior management that the combination of TSX and ANTEC would
create an entity with worldwide resources and a broad product
offering.
ANTEC's Financial Advisor
- -------------------------
While ANTEC did retain a financial advisor to assist it with its
analysis of the Merger, it did not request its financial advisor to
provide an opinion on the fairness of the Merger to ANTEC's
stockholders.
Opinion of TSX's Financial Advisor
- ----------------------------------
Allen & Co. has acted as TSX's financial advisor in
connection with the Merger and related matters, based upon Allen &
Co.'s qualifications, expertise and reputation, as well as Allen &
Co.'s prior investment banking relationship and familiarity with TSX.
In this connection, Allen & Co. has advised the TSX Board with respect
to the Merger and, on October 26, 1996, at the meeting of the TSX
Board at which the Plan of Merger contemplated thereby was approved,
Allen & Co. delivered a written opinion to the effect that the
consummation of the Merger is fair, from a financial point-of-view,
to the stockholders of TSX. As discussed above, Allen & Co. has
orally confirmed to the TSX Board that, as of December 30, 1996,
it remains the opinion of Allen & Co., based upon and subject to
the matters expressed in the written opinion, that the Merger is fair
to the TSX stockholders from a financial point of view.
THE FULL TEXT OF ALLEN & CO.'S WRITTEN OPINION DATED OCTOBER 26,
1996, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED, AND
<PAGE> 34
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS APPENDIX B TO
THIS PROXY STATEMENT AND IS INCORPORATED HEREIN BY REFERENCE.
STOCKHOLDERS OF TSX ARE URGED TO, AND SHOULD, READ THIS OPINION
CAREFULLY AND IN ITS ENTIRETY.
In arriving at its written opinion, Allen & Co. considered, among
other factors it deemed relevant (a) the terms of the Plan of Merger
and related documentation (which prior to the delivery of Allen &
Co.'s opinion had not been executed by the parties); (b) the nature of
the operations and financial histories of TSX and ANTEC, including
discussions with senior management of TSX and ANTEC about the
respective businesses and prospects of TSX and ANTEC relating to,
among other things, TSX's and ANTEC's operating budget and financial
outlook, as well as their respective strategic objectives; (c) TSX's
and ANTEC's filings with the Securities and Exchange Commission,
including audited and unaudited financial statements for TSX and
ANTEC; (d) certain publicly available reports on TSX and ANTEC
independently prepared by various research analysts; (e) the
historical trading information for the common stock of TSX and ANTEC;
(f) the impact the Merger would have on the earnings of ANTEC; (g)
certain financial and stock market information for certain other
companies in businesses related to those of TSX or ANTEC; (h) certain
financial information relating to certain merger and acquisition
transactions involving companies in businesses related to those of TSX
or ANTEC; and (i) certain publicly available information relating to
premiums paid in certain selected stock-for-stock merger and
acquisition transactions. In addition to its review and analyses of
the specific information set forth above, Allen & Co.'s opinion
reflected and gave effect to its assessment of general economic,
monetary, market and industry conditions existing as of the date of
its opinion as they may affect the business and prospects of TSX and
ANTEC.
In rendering its opinion, Allen & Co. did not conduct an
independent appraisal of TSX's or ANTEC's assets, or independently
verify the information concerning TSX's or ANTEC's operations or other
data which it considered in its review and, for the purpose of
expressing its opinion, it assumed that all such information was
accurate, complete and current. In arriving at its opinion, Allen &
Co. was not authorized to solicit, and did not solicit interest from
any third party with respect to TSX or any of its assets.
The following is a brief summary of certain analyses performed by
Allen & Co. and reviewed with TSX's Board on October 26, 1996, in
connection with Allen & Co.'s opinion to TSX's Board on such date:
RELATIVE CONTRIBUTION ANALYSIS. Allen & Co. analyzed TSX's and
ANTEC's relative contribution to the combined company with respect to
revenues; gross profit; earnings before interest, taxes, depreciation
and amortization ("EBITDA"); earnings before interest and taxes
("EBIT"); pre-tax income; net income; total assets; book value;
tangible book value; Equity Value (defined as the market value of the
outstanding equity) and Enterprise Value (defined as Equity Value plus
<PAGE> 35
debt less cash). As a result of the Merger, as of October 26, 1996,
TSX's contribution to the combined company's Equity Value (equivalent
to TSX stockholders' ownership of the combined company) would have
been approximately 40.8%. In comparison, TSX's contribution to
ANTEC's pro forma pre-tax income and net income for the fiscal year
ended December 31, 1996, is projected to be approximately 39.0% and
49.1%, respectively, and TSX's contribution to ANTEC's pro forma book
value and tangible book value as of September 30, 1996, would have
been approximately 19.7% and 42.7%, respectively. As of October 26,
1996, TSX's contribution to the combined company's Enterprise Value
would have been approximately 29.7%. In comparison, TSX's
contribution to ANTEC's pro forma revenue, gross profit, EBITDA and
EBIT for the fiscal year ended December 31, 1996, is projected to be
approximately 10.3%, 17.8%, 24.0% and 27.6%, respectively, and TSX's
contribution to ANTEC's pro forma total assets as of September 30,
1996, would have been approximately 14.0%.
The Equity Value and Enterprise Value for TSX were calculated
based on estimates by each company of fully diluted outstanding shares
utilizing the treasury-stock method and (a) an assumed purchase price
per share of TSX common stock equal to $11.875, the product of the per
share closing price of ANTEC common stock on October 25, 1996
($11.875) and the Exchange Ratio (the "Original Assumed Purchase
Price") and (b) on the per share closing price of ANTEC common stock
on October 25, 1996. The results of these contribution analyses are
not necessarily indicative of the contributions that the respective
businesses may have in the future.
Allen & Co.'s analyses of TSX's contribution to pro forma results
of operations of ANTEC were based on discussions with senior
management of TSX and ANTEC about the respective business and
prospects of TSX and ANTEC which, as described above, are subject to
certain assumptions which Allen & Co. did not independently verify.
PRO FORMA MERGER ANALYSIS. Allen & Co. analyzed certain pro
forma effects resulting from the Merger, including, among other
things, the impact of the Merger on the projected earnings per share
("EPS") of ANTEC for the fiscal years ended 1996 and 1997, based on
discussions with managements of both companies with respect to their
respective financial outlooks for each company on a stand-alone basis
and their assessments of the potential strategic benefits to be
derived from the Merger. The results of the pro forma merger analysis
suggested that the Merger could be accretive to ANTEC's EPS in fiscal
years 1996 and 1997. The actual results achieved by the combined
company may vary from the prospective outlooks of managements of TSX
and ANTEC and the variations may be material.
DISCOUNTED CASH FLOW ANALYSIS. Allen & Co. calculated a range of
present values of a share of TSX common stock utilizing a discounted
cash flow ("DCF") methodology. The DCF methodology utilized by Allen
& Co. valued TSX by estimating the present value of future free cash
flows potentially available to the company's equity holders. Free
cash flow represents the amount of cash generated by the subject
<PAGE> 36
company and available for principal, interest and dividend payments
after providing for the ongoing operations of the business. At the
end of the projection period, Allen & Co. applied a range of multiples
to TSX's projected EBITDA to reflect the value of TSX for the period
beyond the forecasted time horizon. The range of EBITDA multiples
considered was 7.0x to 10.0x and the discount rates used ranged from
12.0% to 16.0%. On the basis of such varying assumptions, Allen & Co.
calculated a present value of TSX common stock ranging from $9.43 to
$12.91 per share. Such analysis was based upon many factors and
assumptions, many of which are beyond the control of TSX.
ANALYSIS OF CERTAIN PUBLICLY TRADED COMPANIES. To provide
contextual data and comparative market information, Allen & Co.
compared selected historical share price and operating and financial
ratios for TSX to the corresponding data and ratios of the following
cable equipment manufacturing and distribution companies whose
securities are publicly traded: (a) Scientific - Atlanta, Inc.; (b)
General Instrument Corporation; (c) C-COR Electronics, Inc.; (d)
Augat, Inc.; (e) ANTEC; (f) Amphenol Corporation; and (g) Oak
Industries, Inc.
Such data and ratios included, among other things, Enterprise
Value as a multiple of latest twelve months ("LTM") revenues, EBITDA
and EBIT, as well as the ratios of the current stock price to LTM EPS
and calendar year 1996 estimated EPS (as estimated by research
analysts and compiled by First Call and Institutional Brokers Estimate
Service).
Such analysis indicated that (a) the median values of Enterprise
Value as a multiple of LTM revenues, EBITDA and EBIT as of October 26,
1996, for cable equipment manufacturing and distribution companies
were 1.1x, 8.3x and 11.7x, respectively, as compared to the
corresponding multiples of TSX, based on the Original Assumed Purchase
Price, of 2.1x, 8.3x and 9.0x, respectively, and (b) the median values
of the ratios of current stock price to LTM EPS and calendar year 1996
estimated EPS for cable equipment manufacturing and distribution
companies were 21.1x and 18.3, respectively, as compared to the
corresponding multiples of TSX, based on the Original Assumed Purchase
Price, of 13.8x and 15.7, respectively.
Allen & Co. also noted that for ANTEC, the above multiples were
0.6x, 7.9x, 11.0x, 22.5x and 19.8x, respectively.
No company utilized in the Public Companies analysis as a
comparison is identical to TSX. Accordingly, an analysis of the
results of the foregoing necessarily involves complex considerations
and judgments concerning differences in the financial and operating
characteristics of TSX relative to other public companies.
TRANSACTION ANALYSIS. Allen & Co. reviewed available information
for 15 selected transactions involving the combination or acquisition
of companies in various segments of the communications equipment
industry during the last four years (the "M&A Transactions-Set").
<PAGE> 37
Allen & Co. reviewed the Enterprise Value of the acquired company as a
multiple of revenues, EBITDA and EBIT for the latest reported twelve
months prior to the announcement of such transactions, and Equity
Value as a multiple of LTM net income, for those transactions where
such information was available.
The medians of the ratios of Enterprise Value to each of LTM
revenues, EBITDA and EBIT in the M&A Transactions-Set were 1.5x, 7.5x
and 10.3x, as compared to the corresponding multiples for TSX, based
on the Original Assumed Purchase Price, of 2.1x, 8.3x and 9.0x,
respectively. The median of the ratio of Equity Value to LTM net
income in the M&A Transactions-Set was 21.5x, as compared to the
corresponding multiple for TSX, based on the Original Assumed Purchase
Price, of 13.8x.
None of the companies or transactions used in the foregoing
transaction analyses was directly comparable to TSX or the proposed
transaction.
STOCK PREMIUM ANALYSIS. Allen & Co. reviewed publicly available
information relating to premiums paid in stock-for-stock merger and
acquisition transactions in the $100 million to $550 million range
that have been announced since January 1, 1994. Allen & Co. reviewed
the price paid per share as a premium to the price of the stock of the
acquired company one day, one week and one month prior to the
announcement of the transaction.
The medians of the premiums paid to the price per share one day,
one week and one month prior to announcement of the transactions were
21.2%, 26.8% and 32.6%, respectively. The premiums represented by the
Original Assumed Purchase Price over the price per share of TSX common
stock one day prior to October 26, 1996 (the "one-day premium"), the
day that Allen & Co. delivered its opinion to the TSX Board, was
31.0%. Because both TSX and ANTEC made announcements during the one
week and one month preceding October 26, 1996, which materially
impacted their stock prices, Allen & Co. believed that the one-day
premium was most relevant for purposes of the stock premium analysis.
At the December 31, 1996, TSX Board meeting, Allen & Co. noted
that as of December 30, 1996, the last full trading day on the National
market prior to Allen & Co.'s oral update of its written opinion,
the closing price per share of ANTEC common stock was $8.75 (the "Updated
Assumed Purchase Price"), as compared to the Original Assumed Purchase
price of $11.875 on October 25, 1996, the last full trading day on the
National Market prior to the delivery of Allen & Co.'s written opinion.
The Updated Assumed Purchase Price is 26.3% below the Original Assumed
Purchase Price and 7.2% below the low end of the present value range for
TSX common stock calculated by Allen & Co. in October 1996 utilizing a
DCF methodology. Senior management of TSX and ANTEC indicated to
Allen & Co. their respective views that each company's financial
performance was being, and in the near term would continue to be, adversely
impacted by TCI's announcement in October 1996 to temporarily cease
accepting shipments of each company's traditional products (TCI has
accounted recently for approximately 19% of ANTEC's sales and 44%
of TSX's sales).
<PAGE> 38
Based on discussions with senior management of ANTEC and TSX, Allen &
Co. was of the view that the reduced consideration represented by the
difference between the Updated Assumed Purchase Price and the Original
Assumed Purchase Price reflected in large part the market perceptions
of the likely impact on both companies of the reduced order flow
indicated by the TCI announcement, and as such, Allen & Co. has orally
confirmed to the TSX Board that, as of December 30, 1996, it remains the
opinion of Allen & Co., based upon and subject to the matters expressed
in the written opinion, that the Merger is fair to the TSX stockholders
from a financial point of view.
The preparation of a fairness opinion is a complex process and is
not necessarily susceptible to a partial analysis or summary
description. Allen & Co. believes that its analyses must be
considered as a whole and that selecting portions of its analyses,
without considering all analyses, would create an incomplete view of
the process underlying its opinion.
The TSX Board selected Allen & Co. as its financial advisor
because it is an investment banking firm with recognized expertise in
the cable and telecommunications industries, which has substantial
experience in transactions similar to the Merger and is familiar with
TSX and its business. Allen & Co. is an investment banking firm
engaged in, among other things, the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwriting, competitive biddings, secondary distributions of listed
and unlisted securities, private placements and valuations for
corporate and other purposes. In the ordinary course of Allen & Co.'s
trading and brokerage activities, Allen & Co. or its affiliates may at
any time hold long or short positions, may trade or otherwise effect
transactions, for its own account or for the account of customers, in
debt or equity securities of TSX and ANTEC. Since March 31, 1992,
Allen & Co. has provided certain investment banking, financial
advisory and financing services to TSX. In addition to cash
compensation for its services, TSX, for services rendered by Allen &
Co. from April 1992 to April 1994, issued warrants to Allen & Co. to
purchase 900,000 shares of TSX common stock. Allen & Co. has
exercised all of the warrants and sold the underlying stock between
January 1995 and May 1995. For the services provided in connection
with the Merger and related matters, TSX has agreed to pay Allen & Co.
a cash fee consisting of (a) a $500,000 fee for the opinion, plus (b)
a fee equal to 1/2% of the transaction value less the opinion fee
(approximately $175,000) contingent upon completion of the Merger.
Conduct of Business After the Merger
- ------------------------------------
As described under "THE MERGER--Recommendations of the ANTEC
Board; ANTEC's Reasons for the Merger" and "-- Recommendations of the
TSX Board; TSX'S Reasons for the Merger" several of the reasons for
the Merger involve the synergies that are expected from combining the
two businesses. These are likely to include the elimination of
<PAGE> 39
duplicate administrative functions, the combination of the two sales
functions, the shifting to TSX's Juarez facility of the manufacturing
of some of the products that ANTEC currently purchases from others and
the reduction of ANTEC's revolving debt. It is ANTEC's and TSX's
intent that the actions necessary to derive these benefits be taken as
promptly following the Merger as practicable.
Accounting Treatment
- --------------------
It is a condition to the consummation of the Merger that we
receive from Ernst & Young LLP and KPMG Peat Marwick LLP letters to
the effect that they concur with the conclusions of ANTEC's and TSX's
management that the Merger, if consummated, will qualify as a
transaction to be accounted for in accordance with the pooling of
interests method of accounting under Opinion No. 16, Business
Combinations, of the Accounting Principles Board of the American
Institute of Certified Public Accountants. Under this accounting
method, the assets and liabilities of TSX will be carried forward to
ANTEC at their historical recorded bases. The reported balance sheet
amounts and results of operations of the separate corporations for
prior periods will be combined, reclassified and conformed, as
appropriate, to reflect the combined financial position and results of
operations for ANTEC. See "PRO FORMA FINANCIAL INFORMATION."
Certain Effects of the Merger
- -----------------------------
The purpose of the Merger is to combine ANTEC and TSX. This is
being done through the merger of TSX with TSX Acquisition Corporation,
a newly-formed, wholly-owned subsidiary of ANTEC. As a result of the
Merger, TSX will become a wholly-owned subsidiary of ANTEC, and former
holders of TSX common stock will receive ANTEC common stock and no
longer have any direct interest in TSX or be able to vote with respect
to the future affairs of TSX. Although former holders of TSX common
stock will no longer enjoy the possibility of a direct interest in any
future appreciation in their equity interest in TSX, after the Merger
such former holders will enjoy the possibility of future appreciation
in their equity interest in ANTEC, which will include TSX.
The current certificate of incorporation and bylaws of ANTEC will
continue as its certificate of incorporation and bylaws after the
completion of the Merger and will govern the ANTEC common stock and
management of ANTEC thereafter. See "DESCRIPTION OF ANTEC CAPITAL
STOCK" and "COMPARISON OF RIGHTS OF HOLDERS OF ANTEC COMMON STOCK AND
TSX COMMON STOCK."
Following completion of the Merger, since TSX will be a wholly-
owned subsidiary of ANTEC, the TSX common stock will be delisted from
the Nasdaq Stock Market's National Market. TSX expects that the TSX
common stock will continue to be listed and traded on the National
Market until the consummation of the Merger.
<PAGE> 40
Interests of Certain Persons in the Merger
- ------------------------------------------
In considering the recommendations of the ANTEC Board and the TSX
Board with respect to the Merger, stockholders of ANTEC and TSX should
be aware that certain members of the TSX Board and management of TSX
have certain interests in the Merger that may be in addition to or
different from the interests of stockholders of ANTEC or TSX
generally. The ANTEC Board and the TSX Board were aware of these
interests and considered them, among other factors, in approving the
Merger. These interests are summarized below.
EMPLOYMENT AGREEMENTS WITH TSX SENIOR MANAGEMENT. The three
members of TSX's senior management, William Lambert, George Fletcher
and Harold Tamburro, all had employment agreements with TSX providing
them with certain benefits in the event of a "change in control" of
TSX or a termination of employment under certain circumstances. In
general, these benefits included the right to receive (a) the cash
value of unexercised stock options and (b) a payment by TSX, upon
termination of employment by the employee following a reduction in
responsibilities by TSX or a termination of employment by TSX for
other than for cause, in an amount equal to twice the annual salary
and annual cash incentive compensation of the employee. The payment
of cash with respect to the value of unexercised stock options is not
permitted in a transaction that will be accounted for as a pooling.
As a result, TSX asked each of these three employees to waive his
right to receive that cash. In addition, ANTEC and TSX proposed a
continuation of Messrs. Lambert's and Fletcher's employment following
the completion of the Merger or, in the alternative, a consulting
arrangement pursuant to which they would assist the combined
enterprise at least during the transition period following the Merger.
(A continuation of Mr. Tamburro's employment was not proposed due to
the desire to achieve administrative savings following the Merger.)
Messrs. Lambert and Fletcher chose to remain as employees, and
the employment agreements with Messrs. Lambert and Fletcher have been
amended so that they provide for the waiver of the right to receive
the cash value of options and for the continued employment by TSX, for
nine months in the case of Mr. Lambert and for two years in the case
of Mr. Fletcher, at their current salaries. They do not provide for
any incentive compensation during those periods. In addition, they
provide for the payment by TSX of the change in control payments to
which they would be entitled if their employment were not continued,
$1,262,567 in the case of Mr. Lambert and $661,466 in the case of Mr.
Fletcher, together with interest, upon the ultimate termination of
their respective employment. Mr. Lambert's employment agreement
grants certain registration rights to him with respect to TSX stock
issuable upon the exercise of options to purchase 600,000 shares and
such registration rights will also be applicable to ANTEC shares
purchased upon exercise of the options after the Merger.
Mr. Tamburro, because of disagreement regarding the amount to be
received upon the termination of his employment following the Merger,
<PAGE> 41
chose to exercise his rights under his employment agreement to resign
effective November 18, 1996. At that time he was paid the severance
benefits provided by his employment agreement and it was agreed that
his stock options would be converted into options for ANTEC stock upon
the consummation of the Merger in lieu of any cash payments therefor.
DESIGNATION OF WILLIAM LAMBERT TO ANTEC BOARD. In the Plan of
Merger, ANTEC has agreed to have Mr. Lambert elected to the ANTEC
Board effective upon completion of the Merger.
DIRECTOR AND OFFICER LIABILITY INSURANCE AND INDEMNIFICATION.
The Plan of Merger provides that all rights to indemnification for
acts or omissions occurring prior to the consummation of the Merger of
the current or former directors and officers of TSX, as provided in
the TSX Articles or the TSX Bylaws, will continue in effect following
the Merger. Subject to the limitations on indemnity contained in the
TSX Articles and TSX Bylaws, ANTEC and TSX have agreed to indemnify
the current or former directors, officers, employees or agents of TSX
as follows: (a) ANTEC will indemnify against acts and omissions
occurring prior to the completion of the Merger, to the extent any
actions arise out of the approval by the TSX Board of the Plan of
Merger and the transactions contemplated therein; (b) TSX will
indemnify against all other acts and omissions occurring prior to the
completion of the Merger; and (c) ANTEC and TSX jointly and severally
will indemnify against acts and omissions occurring from and after the
completion of the Merger. The Plan of Merger provides that the
coverage of TSX's directors' and officers' insurance policy for events
occurring prior to the consummation of the Merger will be extended for
five years thereafter.
VOTING ARRANGEMENTS. Certain voting agreements have been
entered into between ANTEC and TCI and between Anixter and TSX. For a
description of the principal terms of these agreements, see "VOTING
AGREEMENTS." As of December 23, 1996, TCI owned approximately 41% of
the voting power of the outstanding TSX common stock (and has options
to purchase approximately 854,000 shares), and Anixter controlled
approximately 31% of the voting power of the outstanding ANTEC common
stock.
Exchange of Stock Certificates; Fractional Shares
- -------------------------------------------------
At or prior to the completion of the Merger, ANTEC will deposit
with The Bank of New York (the "Exchange Agent") certificates
representing the shares of common stock of ANTEC to be issued in the
Merger in exchange for the outstanding shares of TSX common stock.
Since there are no fractional shares of TSX common stock outstanding,
there will be no fractional shares issued. As soon as practicable
after the completion of the Merger, the Exchange Agent will mail a
form of transmittal letter to the holders of TSX common stock. That
form will contain instructions with respect to the surrender of
certificates representing TSX common stock in exchange for
certificates representing shares of ANTEC common stock.
<PAGE> 42
STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE FORM OF TRANSMITTAL LETTER AND INSTRUCTIONS.
No dividend or other distribution declared on ANTEC common stock
after the completion of the Merger will be paid to the holder of any
unsurrendered certificates for shares of TSX common stock until such
holder surrenders his or her certificates.
When the Exchange Agent receives a surrendered certificate or
certificates from a stockholder, together with the properly signed
transmittal form, it will promptly issue and mail to such holder a
certificate representing the number of shares of ANTEC common stock to
which such holder is entitled, plus the amount, without interest, of
dividends or other distributions, if any, which have previously become
payable with respect to the shares of ANTEC common stock so issued.
A certificate for ANTEC common stock may be issued in a name
other than the name in which the surrendered certificate is registered
if (a) the certificate surrendered is properly endorsed and
accompanied by all documents required to evidence and effect the
transfer to the new holder and (b) the person requesting the issuance
of the ANTEC certificate either pays to the Exchange Agent in advance
any transfer or other taxes due or establishes to the satisfaction of
the Exchange Agent that such taxes have been paid or are not
applicable.
The Exchange Agent will issue stock certificates evidencing ANTEC
common stock in exchange for lost, stolen or destroyed certificates
for TSX common stock upon the receipt of a lost certificate affidavit
and, if reasonably required by ANTEC, a bond indemnifying ANTEC for
any claim that may be made against ANTEC arising out of the lost,
stolen, or destroyed certificates.
After the completion of the Merger, no transfers will be
permitted on the stock transfer books of TSX. If, after the
completion of the Merger, certificates representing shares of TSX
common stock are presented for transfer to the Exchange Agent, they
will be canceled and exchanged for certificates representing ANTEC
common stock.
None of ANTEC, TSX, the Exchange Agent or any other person will
be liable to any former holder of TSX common stock for any amount
delivered in good faith to a public official pursuant to applicable
abandoned property, escheat or similar laws.
Federal Securities Laws Consequences;
Stock Transfer Restriction Agreements
- -------------------------------------
The ANTEC common stock issued pursuant to the Merger will be
freely transferable under the Securities Act, except for shares issued
to any TSX stockholder who is considered to be an "affiliate" of ANTEC
or TSX for purposes of Rule 145 under the Securities Act or of ANTEC
<PAGE> 43
for purposes of Rule 144 under the Securities Act. The definition of
"affiliate" is complex and depends on the specific facts, but
generally encompasses directors, senior officers, 10% stockholders and
any other person with the power to direct the management and policies
of the issuer in question.
Stockholders who are affiliates of ANTEC or TSX may not sell
shares of ANTEC common stock received in the Merger except (a)
pursuant to an effective registration statement under the Securities
Act, (b) in compliance with an exemption from the registration
requirements of the Securities Act or (c) in compliance with Rule 144
and Rule 145 of the Securities Act. Generally, those rules permit
resales of stock received in a registered offering by an affiliate of
ANTEC or TSX as long as ANTEC has complied with certain reporting
requirements and the selling stockholder complies with certain volume
and manner of sale restrictions set forth in Rule 144 and Rule 145.
In addition, all of the affiliates of ANTEC and TSX have agreed
not to sell any ANTEC or TSX securities until the date on which
financial results of the combined operations of TSX and ANTEC covering
at least 30 days after the completion of the Merger have been
published (within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies) by ANTEC in an effective
registration statement, Annual Report on Form 10-K, Quarterly Report
on Form 10-Q or Current Report on Form 8-K filed with the SEC, or any
publicly disclosed quarterly earnings report or press release or other
authorized public disclosure by ANTEC that includes the combined
results of operation of TSX and ANTEC. These restrictions are
intended to fulfill one of the requirements for pooling accounting
treatment for the Merger.
TCI and Mr. Lambert will each have registration rights to cover
sales by them of shares of ANTEC common stock received by them in the
Merger, including shares underlying options held by them to purchase
ANTEC common stock. See "CERTAIN AGREEMENTS WITH TCI--Registration
Rights Agreement" and "THE MERGER--Interests of Certain Persons in the
Merger--EMPLOYMENT AGREEMENTS WITH TSX SENIOR MANAGEMENT."
Nasdaq National Market Listing
- ------------------------------
The Plan of Merger requires ANTEC to file an application with the
Nasdaq Stock Market for approval to list the shares of ANTEC common
stock issued in the Merger on the Nasdaq Stock Market's National
Market, subject to official notice of issuance. A notification form
for listing of additional shares of ANTEC common stock on the National
Market was filed on December 11, 1996.
Commitments with Respect to Other Offers
- ----------------------------------------
Under the Plan of Merger, ANTEC and TSX have agreed not to
encourage, solicit, initiate, engage or participate in any discussions
<PAGE> 44
or negotiations with, or provide any information or access to
information to, any third party regarding any transaction that might
be an alternative to the Merger. See "THE PLAN OF MERGER--Certain
Covenants--SOLICITATION OF TAKEOVER PROPOSALS."
Regulatory Approvals
- --------------------
The Merger is subject to the pre-merger notification requirements
of the Hart-Scott-Rodino Act. ANTEC, TSX and TCI have filed pre-
merger notification forms with the FTC and the Department of Justice
under the Hart-Scott-Rodino Act with respect to Merger. The TCI
filing was required because of the amount of ANTEC common stock that
will be issued to TCI in the Merger. The Hart-Scott-Rodino waiting
period expired on December 26, 1996.
Prior to, or after, the expiration of the Hart-Scott-Rodino Act
waiting period, the FTC or the Department of Justice could take such
action under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking divestiture of substantial
assets of ANTEC or TSX. ANTEC and TSX do not believe that the
consummation of the Merger will result in a violation of any antitrust
laws. However, there can be no assurance that a challenge to the
Merger on antitrust grounds will not be made or, if such a challenge
is made, of the result. Consummation of the Merger is conditioned
upon, among other things, the absence of any injunction or other order
issued by any court or agency of competent jurisdiction or other legal
restraint preventing the consummation of the Merger. ANTEC and TSX do
not believe that any additional governmental filings in the United
States, other than the filing of Articles of Merger with the Secretary
of State of the State of Nevada, are required with respect to the
Merger.
Certain Federal Income Tax Consequences of the Merger
- -----------------------------------------------------
The following is a summary of the anticipated material federal
income tax consequences of the Merger to ANTEC and TSX and the
stockholders of TSX. The discussion is based on current provisions of
the Code, the regulations thereunder, and applicable judicial and
administrative interpretations on the date hereof, any of which is
subject to change at any time. It is based upon the parties'
understanding of the federal income tax laws as currently interpreted
and does not address issues of state or local taxation. The summary
of the anticipated material tax consequences of the Merger to the
stockholders of TSX which follows is limited to those persons who hold
shares of TSX common stock as "capital assets" (generally property
held for investment) within the meaning of Section 1221 of the Code.
We do not address all aspects of federal income taxation that may be
important to particular taxpayers in light of their personal
circumstances or to taxpayers subject to special treatment under the
federal income tax laws (including life insurance companies, foreign
persons, tax-exempt entities, holders who acquired their common stock
<PAGE> 45
pursuant to the exercise of employee stock options or otherwise as
compensation and persons who hold, directly or indirectly, 10% or more
of TSX common stock or any class of TSX common stock) and do not
address any aspect of state, local or foreign taxation. No rulings
have been or will be requested from the IRS with respect to any of the
matters discussed herein. There can be no assurance that future
legislation, regulations, administrative rulings or court decisions
will not alter the tax consequences set forth below.
It is a condition to the Merger that our companies will receive
favorable opinions of Schiff Hardin & Waite and Kemp, Smith, Duncan &
Hammond, P.C., to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a)(i)(A) of the Code.
Under the Plan of Merger, we are allowed to waive many of the
conditions to the Merger, including the receipt of the federal tax
opinions. However, we will not waive the condition regarding the
receipt of the federal tax opinions without first obtaining your
approval.
TAX CONSEQUENCES TO ANTEC AND TSX. No gain or loss will be
recognized by ANTEC or TSX as a result of the Merger.
RECEIPT OF TSX COMMON STOCK IN EXCHANGE FOR ANTEC COMMON STOCK.
A TSX stockholder who receives shares of ANTEC common stock in
exchange for shares of TSX common stock will not recognize federal
gain or loss upon receipt of such shares of ANTEC common stock. The
stockholder's tax basis in the stock received will be the same as the
stockholder's tax basis in the shares exchanged in the Merger. The
holding period of the ANTEC common stock received by the stockholders
of TSX in the Merger will include the period during which the shares
of TSX common stock surrendered in exchange therefore were held, but
only if such TSX common stock was held as a capital asset as of the
completion of the Merger.
THIS FEDERAL INCOME TAX DISCUSSION IS FOR GENERAL INFORMATION
ONLY AND MAY NOT APPLY TO ALL HOLDERS OF TSX COMMON STOCK. SUCH
HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER.
FORWARD-LOOKING STATEMENTS
--------------------------
This Joint Proxy Statement-Prospectus contains statements that
may be "forward-looking" for purposes of the new "safe harbor" section
of the Private Securities Litigation Reform Act of 1996. In
particular, some of the statements in "SUMMARY--Recent Developments"
on page 17, "THE MERGER--Recommendation of the ANTEC Board; Reasons for
the Merger" on pages 26 through 29, "THE MERGER--Recommendation of the
TSX Board; Reasons for the Merger" on pages 29 through 33, "THE
MERGER--Opinion of TSX's Financial Advisor" on pages 33 through 38,
and "PRO FORMA FINANCIAL INFORMATION" on pages 73 through 82, and in
the summaries of these sections, may be forward-looking. We want to
<PAGE> 46
caution our stockholders that given the recent developments in the
cable television industry, it is difficult, if not impossible, to
predict accurately what will happen to our businesses in the future.
Some of these developments are discussed or referred to in
"SUMMARY--Recent Developments," and we urge you to read that
information carefully. As a consequence of these uncertainties, it
could be that some of the assumptions that we made in approving and
recommending the Merger--particularly with regard to how our
respective businesses are likely to perform relative to each other in
the future--could be wrong and our actual results could differ
materially. Errors in our assumptions could mean that the exchange
ratio of one-for-one was too high or too low, or possibly even that
the Merger was inadvisable. While this certainly is not our
expectation, as a result of our advising you of this uncertainty the
Private Securities Litigation Reform Act provides certain protection
for us for any forward-looking statements that ultimately are proven
inaccurate.
COMPARABLE PER SHARE MARKET PRICE INFORMATION
---------------------------------------------
ANTEC common stock and TSX common stock are listed on the Nasdaq
Stock Market's National Market. (Until May 2, 1995, TSX was listed on
the American Stock Exchange.) The ANTEC ticker symbol is ANTEC. The
TSX ticker symbol is TSXX.
The table sets forth, for the calendar quarters indicated, the
reported high and low closing sale prices of ANTEC and TSX common
stock as reported in published financial sources. For TSX these
prices have been adjusted to reflect stock splits.
<PAGE> 47
<TABLE>
<CAPTION>
ANTEC TSX
Common Stock Common Stock
------------ ------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
1994
1st quarter . . . . . . . . . . . . . . 28.250 19.500 3.047 1.578
2nd quarter . . . . . . . . . . . . . . 27.000 19.500 5.297 2.922
3rd quarter . . . . . . . . . . . . . . 37.750 23.500 8.422 4.547
4th quarter . . . . . . . . . . . . . . 28.500 16.625 15.672 8.047
1995
1st quarter . . . . . . . . . . . . . . 25.625 16.750 12.578 9.750
2nd quarter . . . . . . . . . . . . . . 23.750 15.000 15.828 10.531
3rd quarter . . . . . . . . . . . . . . 19.125 13.375 18.672 13.828
4th quarter . . . . . . . . . . . . . . 18.000 11.500 15.672 12.172
1996
1st quarter . . . . . . . . . . . . . . 19.313 14.875 14.531 10.328
2nd quarter . . . . . . . . . . . . . . 17.750 14.000 20.672 12.672
3rd quarter . . . . . . . . . . . . . . 16.375 13.813 19.500 10.750
4th quarter (through December 27, 1996) 17.625 8.750 17.000 8.250
</TABLE>
On October 1, 1996, the last full trading day prior to the public
announcement of the discussions regarding the Merger, the closing
price was $15.125 for ANTEC common stock and $13.75 TSX common stock.
On October 25, 1996, the last full trading day prior to the execution
of the Plan of Merger, the closing price was $11.875 for ANTEC common
stock and $9.063 for TSX common stock. On December 27, 1996, the most
recent practicable date prior to the printing of this Joint Proxy
Statement-Prospectus, the closing price was $8.75 for ANTEC common
stock and $8.50 for TSX common stock. Stockholders are urged to
obtain current market quotations prior to making any decisions with
respect to the Merger.
<PAGE> 48
THE PLAN OF MERGER
------------------
The following is a summary of certain provisions of the plan of
merger, a copy of which is attached as appendix a to this joint proxy
statement-prospectus and is incorporated herein by reference. This
summary is qualified in its entirety by reference to the full text of
the plan of merger. Capitalized terms used and not defined below have
the respective meanings assigned to them in the plan of merger. All
holders of Antec and TSX common stock are encouraged to read the plan
of merger carefully and in its entirety.
The Merger
- ----------
The combination of ANTEC and TSX will be accomplished through the
merger of TSX Acquisition Corporation, a newly-formed, wholly-owned
subsidiary of ANTEC, with and into TSX. TSX will be the surviving
corporation in the Merger and will become a wholly-owned subsidiary of
ANTEC. The Plan of Merger contains the terms and conditions for the
Merger.
The Merger will be completed following the satisfaction (or
waiver) of the conditions contained in the Plan of Merger, including
the approval of the Merger by our stockholders, when Articles of
Merger are filed with the Secretary of State of the State of Nevada.
We currently expect that the completion of the Merger will occur
promptly after the special meetings. As part of the Merger each
outstanding share of TSX common stock will be converted into the right
to receive one share of ANTEC common stock.
All stockholders of ANTEC will continue to own the same number of
shares of ANTEC common stock. Because of the Merger ANTEC will issue
approximately 15.4 million shares of its common stock and the options
described below, and each stockholder's percentage ownership of ANTEC
will decrease.
Treatment of TSX Options
- ------------------------
The options that are outstanding pursuant to TSX stock option
plans and agreements will be automatically converted in the Merger
into options to purchase the same number of shares of ANTEC common
stock at the same exercise price and on generally the same other
existing terms of the TSX options. Vested TSX options will remain
vested following the completion of the Merger, and unvested TSX
options will vest upon completion of the Merger.
Representations and Warranties
- ------------------------------
The Plan of Merger contains various representations and
warranties by TSX and ANTEC as to, among other things, their (a) legal
<PAGE> 49
status under the laws of their respective states of incorporation, (b)
subsidiaries and other investments, (c) capitalization, (d) corporate
authority to enter into the Merger and related transactions, (e)
required filings and approvals, (f) financial statements and SEC
filings, (g) absence of certain material changes or events, (h)
absence of certain litigation, (i) tax filings and other tax matters,
(j) compliance with laws, (k) material contracts, (l) undisclosed
liabilities, and (m) the availability of "pooling of interest"
accounting. Since the representations and warranties do not survive
the completion of the Merger, they function primarily as a due
diligence device and a closing condition (i.e., they have to continue
to be true in all material respects until the closing).
The Plan of Merger provides that the directors, officers and
stockholders of the parties will not be liable for breaches of the
representations, warranties or other provisions of the Plan of Merger.
Certain Covenants
- -----------------
The Plan of Merger contains various covenants and agreements that
govern our actions until the Merger. The covenants that we consider
the most important are summarized below.
CONDUCT OF BUSINESS. We have agreed to conduct our respective
businesses in the ordinary course consistent with past practices and
to use reasonable efforts to preserve intact our business
organizations, to keep available the services of officers and key
employees and to preserve advantageous business relationships. In
furtherance of this agreement, the Plan of Merger places restrictions
on our ability, among other things, to (a) incur indebtedness, (b)
adjust, split, combine or reclassify any shares of stock, (c) declare
dividends or redeem shares of stock, (d) grant any rights to acquire
any shares of stock, (e) issue shares of stock except pursuant to the
exercises of stock options, (f) make material dispositions or
acquisitions of assets, (g) enter into, terminate or amend certain
material contracts, (h) increase employee compensation, (i) amend the
certificate of incorporation or bylaws or (j) take any action that
would affect or delay the receipt of required governmental approvals,
result in a material breach of contract or affect the accounting
treatment of the Merger. We also have agreed that we will not take
any action that would, or that reasonably could be expected to, result
in (a) any of the representations and warranties becoming untrue in
any material respect, (b) any of the conditions to the Merger not
being satisfied or (c) a violation of any provision of the Plan of
Merger.
SOLICITATION OF ACQUISITION PROPOSALS. The Plan of Merger
provides that both of us will immediately cease any existing
discussions or negotiations with respect to any Alternate Transactions
(defined below). Further, we have agreed not to, directly or
indirectly, solicit, initiate or encourage the submission of any
proposal for an Alternate Transaction or participate in any
<PAGE> 50
discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Alternate Transaction. We have
agreed to promptly inform the other of any inquiry, offer or proposal
that either of us receives in respect to any Alternate Transaction and
to furnish the other with a copy of any such inquiry, offer or
proposal that is in writing. We may, however, take and disclose to
our stockholders a position with respect to a tender offer by a third
party as required by Rules 14d-9 and 14e-2(a) of the Securities
Exchange Act of 1934 or make such disclosures to our stockholders as
may be required under law.
"Alternate Transaction" means (a) any merger, consolidation, or
other business combination in which the holders of ANTEC or TSX, as
the case may be, would hold less than a majority of the voting
interest of the surviving entity, (b) the disposition of 10% or more
of the assets of the company and its subsidiaries taken as a whole, in
a single transaction or series of transactions, (c) any tender offer
or exchange offer for 10% or more of the outstanding shares of common
stock or the filing of a registration statement under the Securities
Act in connection therewith, (d) the issuance, sale or other
disposition (including by way of merger, consolidation, share exchange
or any similar transaction) of securities representing 10% or more of
the voting power of ANTEC or TSX or any of their respective
subsidiaries or (e) any public announcement of a proposal, plan or
intention of accomplishing any of the foregoing or any agreement to
engage in any of the foregoing.
INDEMNIFICATION AND INSURANCE. As discussed under "THE
MERGER--Certain Interested Persons in the Merger--DIRECTOR AND OFFICER
LIABILITY INSURANCE AND INDEMNIFICATION," ANTEC and TSX have agreed to
provide various indemnities and insurance coverages in favor of the
officers and directors of TSX.
OTHER COVENANTS. The Plan of Merger contains various other
covenants, including covenants relating to the preparation and
distribution of this Joint Proxy Statement-Prospectus, access to
information, stockholders' approvals, publication of financial
statements after the completion of the Merger and listing of ANTEC
common stock on the Nasdaq Stock Market's National Market.
Conditions to the Consummation of the Merger
- --------------------------------------------
Under the Plan of Merger, various conditions are required to be
satisfied before the parties are obligated to complete the Merger.
For the most part these conditions are customary and include such
items as the receipt of stockholder, regulatory, and Nasdaq listing
approval, the receipt of corporate and tax legal opinions and the
receipt of comfort letters from the independent auditors. In
addition, the obligations of the parties are subject to the continued
accuracy of the other party's representations and warranties, the
<PAGE> 51
performance by the other party of its obligations under the Plan of
Merger, and the absence of any events or changes with respect to the
other party having, or which reasonably could be expected to have, an
adverse effect on the other party. Each of these three conditions is
subject to a "materiality" standard. Similarly, each party is
required to receive various letters from the parties' independent
auditors to the combined effect that the Merger qualifies for pooling
of interests accounting treatment. See "THE MERGER--Accounting
Treatment." Certain of the conditions to the Merger may be waived by
the company entitled to assert the condition. After approval of the
transactions contemplated in the Plan of Merger, we are required under
the Plan of Merger to obtain further stockholder approval before
waiving any portion of the Plan of Merger that changes the
consideration or form of consideration. In addition, although the
Plan of Merger allows us to waive the receipt of federal tax opinions,
we will not waive this condition without first obtaining your
approval.
Termination of the Plan of Merger
- ---------------------------------
TERMINATION BY MUTUAL CONSENT. The Plan of Merger may be
terminated and the Merger abandoned at any time prior to the
completion of the Merger by our mutual written consent.
TERMINATION BY EITHER ANTEC OR TSX. The Plan of Merger may be
terminated, and the Merger abandoned, by either of us if: (a) the
Merger has not been completed by April 30, 1997 (provided that this
right to terminate will not be available to a party whose failure to
fulfill any obligation under the Plan of Merger resulted in the
failure of the Merger to occur on or before that date); (b) a
material breach of the Plan of Merger has occurred on the part of the
other party in the representations, warranties or covenants or any
failure to comply with other obligations of the other party or any
other circumstances such that certain enumerated conditions to the
Merger could not be satisfied; (c) any court or other governmental
entity has issued a order, decree or ruling or has taken any action
having the effect of prohibiting the Merger; or (d) the requisite vote
of the stockholders of either of us in favor of the Merger and the
resulting issuance of shares was not obtained at the special meetings
(including any adjournment or postponement).
TERMINATION BY TSX. In addition to the foregoing, the Plan of
Merger may be terminated and the Merger abandoned at any time prior to
the completion of the Merger by TSX if Ernst & Young LLP is unable to
provide the pooling letter described in the Plan of Merger because of
an error or omission in the information provided by ANTEC to Ernst &
Young LLP prior to the date of the Plan of Merger. See "THE
MERGER--Accounting Treatment."
TERMINATION BY ANTEC. In addition to the foregoing, the Plan of
Merger may be terminated and the Merger abandoned at any time prior to
the completion of the Merger by ANTEC if KPMG Peat Marwick LLP is
<PAGE> 52
unable to provide the pooling letter described in the Plan of Merger
because of an error or omission in the information provided by TSX to
KPMG Peat Marwick LLP prior to the date of the Plan of Merger. See
"THE MERGER--Accounting Treatment."
Effect of Termination
- ---------------------
Generally, if the Plan of Merger is terminated by either of us as
described above, the Plan of Merger will become void without any
liability on the part of any party other than for material breaches
occurring prior to termination. However, the provisions of the Plan
of Merger providing for confidentiality of certain information,
indemnification by ANTEC of TSX officers and directors, agreements of
ANTEC not to acquire additional shares of TSX common stock, non-
survival of representations, warranties and agreements, expenses, and
publicity will survive termination.
If either party terminates the Plan of Merger because (a) the
Plan of Merger was not approved by the requisite vote of TSX
stockholders or (b) any court or other governmental entity issued an
order, decree or ruling or took any other action having the effect of
prohibiting the Merger and compelling TSX to consider an Alternate
Transaction because it could be more favorable to TSX's stockholders,
or if ANTEC terminates the Plan of Merger because KPMG Peat Marwick
LLP was unable to provide a pooling letter due to an error or omission
in information provided by TSX to it, then TSX will pay to ANTEC
liquidated damages of $6,000,000. If either party terminates the Plan
of Merger because (a) the Plan of Merger was not approved by the
requisite vote of ANTEC stockholders or (b) any court or other
governmental entity issued an order, decree or ruling or took any
other action having the effects of prohibiting the Merger and
compelling ANTEC to consider an Alternate Transaction because it could
be more favorable to ANTEC's stockholders, or if TSX terminates the
Plan of Merger because Ernst & Young LLP was unable to provide a
pooling letter due to an error or omission in information provided by
ANTEC to it, then ANTEC will pay to TSX liquidated damages of
$6,000,000.
Fees and Expenses
- -----------------
We have agreed that certain expenses will be borne 40% by TSX and
60% by ANTEC in the event that the Plan of Merger is terminated prior
to the completion of the Merger. These expenses generally consist of
the expenses attendant to the preparation, filing and distribution of
the Joint Proxy Statement-Prospectus, the filing fees paid in
connection with the Hart-Scott-Rodino Act, and the filing fees
relating to the listing of the ANTEC common stock on the Nasdaq Stock
Market's National Market. All other costs and expenses incurred in
connection with the Merger will be paid by the party incurring such
expense.
<PAGE> 53
Waiver and Amendment
- --------------------
We may (a) extend the time for the performance of any of the
obligations or other acts of the parties to the Plan of Merger, (b)
waive any inaccuracies in the representations and warranties contained
in the Plan of Merger or in any document, certificate or writing
delivered pursuant to the Plan of Merger, (c) waive compliance with
any of the agreements or conditions contained in the Plan of Merger or
(d) amend the Plan of Merger. However, after stockholder approval,
any waiver or amendment may not change the amount or form of the
consideration to be delivered to the TSX stockholders without further
approval. In addition, the TCI Voting Agreement and Anixter Voting
Agreement impose restrictions on the granting of waivers without TCI's
and Anixter's consent.
CERTAIN AGREEMENTS WITH TCI
---------------------------
TCI is the largest stockholder of TSX. TCI is also the largest
customer of both TSX and ANTEC. TCI purchased products accounting for
approximately 44% of TSX's 1996 fiscal year consolidated net sales
from continuing operations, and products and services accounting for
approximately 19% ANTEC's 1995 consolidated net sales from continuing
operations.
The following is a summary of certain provisions of agreements
that ANTEC or TSX have entered into with TCI. Copies of these
agreements, to the extent they are material, are filed as exhibits to
the Registration Statement and are incorporated by reference, or have
been filed as exhibits to TSX's 1994 and 1995 Form 10-Ks and are
deemed incorporated by reference. See "WHERE TO FIND ADDITIONAL
INFORMATION." The following summaries are qualified by reference to
the complete text of the relevant agreements.
Customer Agreements
- -------------------
TSX entered into a Master Purchase Agreement (the "TCI Master
Purchase Agreement"), dated June 21, 1993, with TCI. The TCI Master
Purchase Agreement expires on December 31, 1996. The TCI Master
Purchase Agreement establishes prices at which TCI is to purchase from
TSX a minimum of 20% of certain products purchased by TCI from all
sources during the term of the TCI Master Purchase Agreement. No
penalties accrue to TCI if it does not purchase the percentage of
equipment agreed to, and TCI is not obligated to purchase any
products. TSX's obligation to sell to TCI at the prices stipulated to
in the TCI Master Purchase Agreement is conditioned upon TCI's
purchase from TSX of at least 20% of the total amount of certain
equipment purchased by TCI from all sources during the term of the TCI
Master Purchase Agreement. TSX has agreed under certain circumstances
not to sell the products or services covered by the TCI Master
Purchase Agreement for a price less than that available to TCI, except
<PAGE> 54
for the limited purpose of conducting special or promotional sales, in
which case TSX is required to offer contemporaneously to TCI the same
pricing volume and terms of any such special or promotional sale. TSX
is uncertain of the significance of the TCI Master Purchase Agreement
on TCI's decision to purchase TSX's products and TSX does not know if
TCI has purchased 20% of its total agreement-covered needs from TSX.
Sales under the TCI Master Purchase Agreement have exceeded $60
million to date, and prior to the TCI Master Purchase Agreement TCI
purchased products of the type covered by the TCI Master Purchase
Agreement from TSX. Regardless of whether the parties renew the TCI
Master Purchase Agreement or enter into a new master purchase
agreement with ANTEC, neither ANTEC nor TSX expect that this will
have a material impact on the business of the combined companies or
the relationship of the combined companies with TCI.
ANTEC is currently managing certain TCI inventories for a fee of
$800,000 a month. This agreement continues through May 31, 1998 and
year to year thereafter, unless terminated by TCI upon 90 days notice
and the payment of a specified termination fee. Pursuant to TCI's
request, the parties are now discussing the replacement of this
arrangement with an alternative arrangement such as an arrangement for
ANTEC to acquire and maintain certain inventories for TCI's benefit.
It is unknown at this time: whether such an arrangement can be
negotiated to the mutual satisfaction of the parties; if it can,
whether such an arrangement, which could require substantially more
working capital, will be as beneficial to ANTEC as the current
arrangement; if it cannot, whether ANTEC will be able to convince TCI
to continue the present arrangement; and if it can, what the terms of
the arrangement will be. ANTEC currently has an agreement with TCI to
keep certain ANTEC inventories at certain TCI locations, which
agreement terminates on May 31, 1999, or earlier if TCI purchases the
inventories.
Both ANTEC and TSX continually have open purchase orders from TCI
and agreements establishing the terms of those purchases.
Investment Agreement
- --------------------
Pursuant to an Investment Agreement (the "TCI Investment
Agreement") dated March 14, 1994, between TSX and TCI, TCI purchased
6,327,000 shares of TSX common stock for a cash purchase price of
approximately $12.4 million. The shares purchased by TCI in the
transaction represented 49% of TSX's outstanding common stock upon
completion of the transaction. As part of the TCI Investment
Agreement, TSX borrowed $4.6 million from TCI pursuant to an unsecured
promissory note dated March 14, 1994, payable by TSX to TCI. This
note was repaid in full on January 17, 1995.
The TCI Investment Agreement grants TCI the right to appoint two
members of TSX's five member board of directors as long as TCI holds
25% or more of TSX's outstanding common stock; if TCI holds less than
<PAGE> 55
25% of the outstanding common stock it has the right to appoint only
one director. As of December 23, 1996, TCI held approximately 41% of
TSX's outstanding common stock. Consequently, two representatives of
TCI presently serve on the board of directors of TSX. In addition,
the TCI Investment Agreement provides that TSX must obtain super
majority (4 of 5) approval of the Board of Directors to: (a) incur
additional liabilities, including debt for borrowed money, in excess
of $5 million per year; (b) issue any capital stock or the right to
acquire capital stock of TSX except pursuant to employee and director
stock option plans; (c) remove the chief executive officer of TSX or
make a change in the number of directors of TSX; (d) declare or pay
any dividend or distribution on its capital stock other than a
dividend solely in the form of shares of its capital stock; (e) sell a
material portion of the assets of TSX or any subsidiary or merge TSX
or any subsidiary with another entity; (f) engage in transactions
between TSX or any of its subsidiaries and officers or directors of
TSX which exceed $1 million; (g) acquire or enter into any kind of
business other than the kind of business currently carried on by TSX
and its subsidiary; (h) make any repurchase or redemption of any
shares of its capital stock; or (j) make capital expenditures in
excess of $2 million per transaction or series of related
transactions. So, the Merger with ANTEC required the approval of four
of five, and was unanimously approved by all five, TSX directors.
The TCI Investment Agreement provides for certain preemptive
rights to TCI to maintain its percentage equity interest in TSX by
purchasing additional shares of TSX common stock and convertible
securities, rights and options, as in and when TSX issues additional
shares of common stock and securities convertible into, or
exchangeable or exercisable for, additional shares of common stock,
except under certain conditions. The purchase price to be paid by TCI
upon exercise of its preemptive rights is to be equal to the
consideration paid by the third-party purchasers or the fair market
value thereof in case of property as consideration. As of the date of
this Joint Proxy Statement-Prospectus, options to purchase 854,339
shares of TSX common stock had been granted to TCI pursuant to the
TCI Investment Agreement.
The TCI Investment Agreement requires TSX to amend, at TCI's
request, the TSX Articles and TSX Bylaws to the extent that they are
inconsistent or silent with respect to the provisions of the TCI
Investment Agreement requiring nomination, election and meeting of
directors, supermajority board approval and preemptive rights, and TSX
expects that such provisions may require, if requested by TCI, minor
conforming amendments to the TSX Articles or TSX Bylaws. Any
amendments to the TSX Articles would require the approval of TSX's
stockholders.
The TCI Investment Agreement and the obligations of the parties
thereunder terminate upon the earlier to occur of (a) written consent
of TSX and TCI, (b) the 20th anniversary date of the TCI Investment
Agreement or (c) at such time as TCI ceases to hold at least 20% of
the outstanding shares of TSX common stock. After the Merger, TCI
<PAGE> 56
will cease to hold at least 20% of the outstanding shares of TSX
common stock and, hence, the TCI Investment Agreement will terminate.
ANTEC will not be entering into a similar agreement with TCI following
the Merger.
Registration Rights Agreement
- -----------------------------
In connection with entering into the TCI Investment Agreement,
TSX and TCI entered into the TCI Registration Rights Agreement (the
"TSX Registration Rights Agreement"), under which TSX granted TCI and
its permitted transferees certain rights entitling TCI and its
permitted transferees to require TSX to register the shares of TSX
common stock held by TCI during the term of the TSX Registration
Rights Agreement and any and all shares or other securities issued by
TSX in exchange for or in respect of such shares. TSX is obligated to
pay all costs and expenses in connection with registration of such
shares, including counsel fees, but excluding brokerage commissions
and underwriting discounts. Each of TSX and TCI indemnify the other,
upon customary terms and conditions, in respect of any registration of
such shares.
ANTEC and TCI entered into a new Registration Rights Agreement
(the "ANTEC Registration Rights Agreement") to be effective following
the Merger. The ANTEC Registration Rights Agreement reflects the
conversion of TSX common stock into ANTEC common stock and otherwise
is substantially identical to the TSX Registration Rights Agreement.
VOTING AGREEMENTS
-----------------
TCI and ANTEC also have entered into a voting agreement (the "TCI
Voting Agreement") pursuant to which TCI has agreed to vote or cause
to be voted the shares of TSX Common Stock owned or controlled by TCI
in favor of the Merger and the transactions contemplated by the Plan
of Merger. This obligation is, in general, subject to the fulfillment
of all of the preconditions to the Merger contained in the Plan of
Merger. The TCI Voting Agreement will terminate upon the termination
of the Plan of Merger in accordance with its terms or, if earlier,
upon consummation of the Merger.
Additionally, TSX and Anixter have entered into a voting
agreement (the "Anixter Voting Agreement") pursuant to which Anixter
has agreed to vote in favor of the Merger and the transactions
contemplated by the Plan of Merger. Anixter's obligations under the
Anixter Voting Agreement are identical to TCI's obligations under the
TCI Voting Agreement.
THE BUSINESS OF ANTEC
---------------------
ANTEC is an international communications technology company
specializing in the design, engineering, manufacturing, materials
<PAGE> 57
management and distribution of products for hybrid fiber/coax
broadband networks. ANTEC concentrates primarily on serving the cable
television industry and, as a result, has been able to identify and
respond to the needs of cable operators making the technological shift
to an open network architecture. ANTEC strives to develop new
products and technological applications, both through its own
engineering resources and by forging strategic alliances with other
companies.
ANTEC is one of the leading suppliers to the cable industry for
fiber optic products. ANTEC also supplies cable system operators with
almost all of the products required in a cable television system,
including headend, distribution, drop and in-home subscriber products.
ANTEC serves its customers through an efficient delivery network of
sales or stocking locations throughout the world. ANTEC maintains
complete inventories and is able to provide overnight, as well as
staged delivery, of product on an "as needed" basis.
The ANTEC business was originally formed in 1969 as a division of
Anixter Inc., a subsidiary of Anixter. ANTEC was incorporated as a
wholly-owned subsidiary of Anixter Inc. in 1993. In September 1993,
ANTEC completed an initial public offering with the sale of ANTEC
common stock by ANTEC and Anixter. Subsequently, Anixter sold
additional shares of its ANTEC common stock and is currently the
beneficial owner of approximately 31% of the outstanding ANTEC common
stock.
ANTEC is incorporated in Delaware. ANTEC's executive offices are
located at 2850 West Golf Road, Rolling Meadows, Illinois 60008, and
its telephone number is (847) 439-4444.
For additional information regarding ANTEC's business, see "WHERE
YOU CAN FIND MORE INFORMATION."
THE BUSINESS OF TSX
-------------------
TSX Corporation, through its subsidiary Texscan Corporation, is a
leading manufacturer of high technology optical nodes and distribution
amplifiers for worldwide cable television markets. Nodes provide the
interface between a fiber optic network and a coaxial distribution
system. Distribution amplifiers strengthen the signal either on its
way to the node or from the node. These products are primarily
produced at TSX's plant in Juarez, Mexico.
Additionally, TSX focuses on the continued development of
distribution electronics incorporating significant fiber optic
technology. Through its own salesmen, independent representatives and
distributors, TSX markets its cable television equipment worldwide
principally to cable television system operators, who are able to
purchase from TSX a major portion of the electronics needed to
construct, operate and maintain a cable television system.
<PAGE> 58
Historically, the cable television fiber and distribution amplifier
segment has been the most significant business segment of TSX.
As announced on November 5, 1996, TSX is in the process of
substantially downsizing its advertising insertion segment, which
designs and manufactures advertising insertion electronics and
character generators at TSX's facility in Salt Lake City, Utah.
TSX was formed in April 1993 as a holding company formed as part
of a reorganization in which Texscan Corporation, a Delaware
corporation, became the wholly-owned subsidiary of TSX.
The principal executive offices of TSX are located at 4849 North
Mesa, Suite 200, El Paso, Texas 79912. TSX's telephone number is
(915) 533-4600.
For additional information regarding TSX's business, see "WHERE
YOU CAN FIND MORE INFORMATION."
BOARD OF DIRECTORS AND MANAGEMENT OF ANTEC
FOLLOWING THE MERGER
------------------------------------------
Board of Directors
- ------------------
The following table sets forth the name, the age as of December
31, 1996, and principal positions held during the past five years by
each of the persons who are expected to serve as directors of ANTEC
following the consummation of the Merger. Immediately following the
consummation of the Merger, the ANTEC Board is expected to consist of
its seven current members plus William Lambert, who is expected to be
appointed as a director of ANTEC upon the consummation of the Merger.
<TABLE>
<CAPTION>
Name and Age Principal Occupation and Other Directorships
- ------------ --------------------------------------------
<S> <C>
Rod F. Dammeyer (56) Director of ANTEC since 1993; President and Director since 1985, and Chief Executive
Officer since 1993 of Anixter, a provider of networking and cabling solutions;
President and Chief Executive Officer since 1994 and Director since 1992 of Great
American Management and Investment, Inc., a diversified manufacturing company; a
Managing Director of EGI Corporate Investments, Inc., a diversified management and
investment company, since 1996; a Managing Director of the general partner of
Zell/Chilmark Fund, L.P. since 1995; Director of Lukens, Inc., Falcon Building
Products, Inc., Capsure Holdings Corp., IMC Global Inc., Revco D.S., Inc., Jacor
Communications, Inc., Teletech Holdings, Inc. and Sealy Corporation; and Trustee of
Van Kampen Merritt closed-end mutual funds and series trusts.
John M. Egan (49) Director of ANTEC since 1993, President and Chief Executive Officer of ANTEC and its
predecessors since 1980.
<PAGE> 59
James L. Faust (54) Director of ANTEC since 1995; Executive Vice President, International of ANTEC since
1995. During 1989 to 1994 he held various executive positions with General
Instrument Corporation.
William H. Lambert (59) Chairman of the Board, President and Chief Executive Officer of TSX since 1988.
Vice President and General Manager of various divisions and subsidiaries of General
Instrument Corporation, including the Jerrold Distributions Systems Division, the
Jerrold Satellite Systems Division and the Jerrold Canada Division, from 1973 to
1988.
John R. Petty (66) Director of ANTEC since 1993; Chairman of Nippon Credit Trust Company, a bank, since
1990; Private investor; Chairman and Chief Executive Officer of Marine Midland
Banks, Inc. from 1983 to 1988; Director of Anixter.
Samuel K. Skinner (58) Director of ANTEC since 1995; President and Director of Unicom Corp., an electrical
utilities company, since 1993; Director of LTV Corporation; Chief of Staff to the
President of the United States from 1992 to 1993; United States Secretary of
Transportation from 1989 to 1992.
Bruce Van Wagner (71) Director and Chairman of ANTEC since 1993; Vice Chairman in 1992 and Chairman from
1987 to 1992 of Anixter Inc., a subsidiary of Anixter.
Mary Agnes Wilderotter (41) Director of ANTEC since 1993; Executive Vice President of AT&T Wireless Services
since October 1995; Regional President of California/Nevada/Hawaii region and Senior
Vice President from 1991 to October 1995 of McCaw Cellular Communications, Inc., a
provider of personal communications services; Senior Vice President of U.S. Computer
Services from 1988 to 1991.
</TABLE>
For certain additional information concerning the persons
expected to serve as directors of ANTEC, see ANTEC's Proxy Statement
used in connection with its 1996 Annual Meeting of Stockholders (the
"1996 ANTEC Proxy Statement"), the relevant portions of which are
incorporated by reference into the ANTEC Form 10-K. See "WHERE YOU
CAN FIND MORE INFORMATION."
Compensation of Directors
- -------------------------
For information concerning the compensation paid to non-employee
directors on the ANTEC Board, see the 1996 ANTEC Proxy Statement, the
relevant portions of which are incorporated by reference into the
ANTEC Form 10-K. See "WHERE YOU CAN FIND MORE INFORMATION."
Management
- ----------
Set forth below are the name and expected title of each person
who is expected to serve as an executive officer of ANTEC following
consummation of the Merger, the age as of December 31, 1996, and the
principal positions held by each such person during the past five
years. While William Lambert will continue with the combined
enterprise in a senior capacity in order to assist in the integration
<PAGE> 60
of the two businesses following the Merger, his precise role has not
yet been determined.
<TABLE>
<CAPTION>
Name and Age Office
- ------------ ------
<S> <C>
John M. Egan (49) President and Chief Executive Officer of ANTEC and its predecessors since 1980;
President of Anixter Communications, a division of Anixter Inc., from 1986 to 1990;
Director of the National Cable Television Association and the Walter Kaits
Foundation, an association seeking to help the cable industry diversify its
management workforce to include minorities.
Lawrence A. Margolis (49) Executive Vice President and Secretary of ANTEC since 1992; Vice President, General
Counsel and Secretary of Anixter Inc. from 1986 to 1992; General Counsel and
Secretary of Anixter Inc. from 1984 to 1986. Prior to 1984, partner at the law firm
of Schiff Hardin & Waite.
Gordon E. Halverson (54) Executive Vice President, Sales of ANTEC since 1990; held various executive
positions with predecessors of ANTEC from 1969 to 1990.
James L. Faust (54) Executive Vice President, International since 1995; held various executive positions
with General Instrument Corporation from 1989 to 1994.
James A. Bauer (54) Senior Vice President Communications and Administration since January 1995; held
various executive positions for ANTEC from September 1993 to December 1994; held
various executive positions with Ameritech, Wisconsin Bell and Illinois Bell from
1983 to 1993.
Daniel J. Distel (50) Vice President and Controller of ANTEC and its predecessors since 1982; Corporate
Controller for U.S. Reduction Co., an aluminum smelting company, from 1979 to 1982.
James E. Knox (59) General Counsel and Assistant Secretary of ANTEC since February 1996. Senior Vice
President, General Counsel and Secretary of Anixter since 1986; partner at Mayer,
Brown & Platt from 1992 to 1996.
Randall L. Talcott (36) Treasurer of ANTEC since May 1996; acting treasurer of ANTEC from 1994 to May 1996;
various positions with Anixter from 1990 to 1994.
</TABLE>
For certain additional information concerning the persons
expected to serve as executive officers of ANTEC, see the 1996 ANTEC
Proxy Statement, the relevant portions of which are incorporated by
reference into the ANTEC Form 10-K. See "WHERE YOU CAN FIND MORE
INFORMATION."
Compensation of Executive Officers
- ----------------------------------
TSX has entered into amendments to the employment agreement with
its senior officers that are contingent upon the completion of the
Merger. For a description of these employment agreements, see "THE
MERGER--Interests of Certain People in the Merger--EMPLOYMENT
AGREEMENTS WITH TSX SENIOR MANAGEMENT."
<PAGE> 61
For information concerning the employment agreements with, and
the compensation paid to, the chief executive officer and the other
four most highly compensated executive officers of ANTEC for the 1995
fiscal year, see the 1996 ANTEC Proxy Statement, the relevant portions
of which are incorporated by reference into the ANTEC Form 10-K. For
information concerning the compensation paid to its senior officers
for the 1995 fiscal year, see TSX's Proxy Statement used in connection
with its 1996 Annual Meeting of Stockholders, the relevant portions of
which are incorporated by reference into the TSX Form 10-K. See
"WHERE YOU CAN FIND MORE INFORMATION."
BENEFICIAL OWNERSHIP OF TSX COMMON STOCK AND ANTEC COMMON STOCK
---------------------------------------------------------------
The following table sets forth information regarding the
beneficial ownership of TSX common stock and ANTEC common stock as of
the Record Date, and ANTEC common stock immediately after the Merger
based upon the holdings as of the Record Date (referred to in the
table as "Combined Company Shares"). The information provided covers
beneficial ownership by each person who is known to be the beneficial
owner of 5% or more of the outstanding TSX common stock or ANTEC
common stock, and each director and executive officer, individually
and as a group, of TSX and ANTEC. TSX and ANTEC believe that each of
the beneficial owners of the respective common stock listed below,
based on such information furnished by such owners, has sole voting
and investment power (or shares such powers with his or her spouse)
with respect to the shares, subject to the information contained in
the notes to the table.
<TABLE>
<CAPTION>
Percent of
Percent of Number of Outstanding
Percent of Number of Outstanding Combined Combined
Number of Outstanding ANTEC ANTEC Company Company
Beneficial Owner TSX Shares TSX Shares Shares Shares Shares Shares
---------------- ---------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
5% STOCKHOLDERS
---------------
Anixter International Inc.(1) -- -- 7,113,500 31.1 7,113,500 18.6
Two North Riverside Plaza
Chicago, Illinois 60606
LGT Asset Management, Inc.(2) -- -- 2,164,800 9.5 2,164,800 5.6
50 California, 27th Floor
San Francisco, California
94111
State of Wisconsin(2) -- -- 1,987,800 8.7 1,987,800 5.2
Investment Board
P.O. Box 7842
Madison, Wisconsin 53707
Tele-Communications, Inc.(3) 7,181,339 44.1 -- -- 7,181,339 18.3
Terrace Tower II, 5619 DTC
Parkway
Englewood, Colorado 80111
The Capital Group Companies, Inc.(2)(4) 1,203,150 7.8 1,455,000 6.4 2,658,150 6.9
333 South Hope Street
Los Angeles, California 90071
TSX DIRECTORS(5)
-------------
William H. Lambert 603,000 3.8 -- -- 603,000 1.5
J. C. Sparkman 12,500 * -- -- 12,500 *
Lewis Solomon 31,600 * -- -- 31,600 *
Larry E. Romrell 12,500 * -- -- 12,500 *
Talton R. Embry 12,500 * -- -- 12,500 *
TSX OFFICERS(5)
------------
Harold Tamburro (6) 13,380 * -- -- 24,630 *
George L. Fletcher 15,000 * -- -- 30,000 *
TSX Officers and Directors as group 700,480 4.3 -- -- 726,730 1.9
ANTEC DIRECTORS(5)
---------------
Rod F. Dammeyer (7) -- -- 7,500 * 7,500 *
John M. Egan -- -- 372,692 1.6 373,892 *
James L. Faust -- -- 16,556 * 16,556 *
John R. Petty (7) -- -- 17,500 * 17,500 *
Samuel K. Skinner -- -- 2,500 * 2,500 *
Bruce Van Wagner (8) -- -- 159,333 * 159,333 *
Mary Agnes Wilderotter (9) -- -- 8,700 * 8,700 *
ANTEC OFFICERS(5)
--------------
Lawrence A. Margolis -- -- 128,430 * 128,430 *
Gordon E. Halverson -- -- 85,065 * 85,065 *
ANTEC Officers and Directors as a -- -- 913,454 3.8 913,454 2.3
group
- --------------------
* = Less than 1%.
<PAGE> 63
<FN>
<F1> Samuel Zell and Ann Lurie are beneficiaries and trustees of trusts that are general partners in partnerships
holding, together with the direct holdings of these individuals, approximately 23% of the stock of Anixter.
Mr. Zell and Mrs. Lurie disclaim beneficial ownership of the shares of ANTEC common stock held by Anixter.
<F2> According to a Schedule 13G filed with the SEC.
<F3> According to Amendment Number 3 to Schedule 13D filed with the SEC on November 26, 1996, the beneficial
ownership of TCI includes 854,339 shares of TSX common stock that TCI may acquire pursuant to stock option
agreements between TCI and TSX, which options were granted pursuant to the terms and conditions of the TCI
Investment Agreement.
<F4> According to a Schedule 13G filed with the SEC, The Capital Group Companies, Inc. ("Capital"), as parent
holding company of Capital Research and Management Company (an investment adviser and wholly-owned
subsidiary) and Capital Guardian Trust Company (a bank and wholly-owned subsidiary), at February 9, 1996, has
the sole power to dispose of 1,203,150 shares of TSX common stock and sole voting power as to 315,000 shares
of TSX common stock. Capital disclaims beneficial ownership as to all shares.
<F5> Includes shares of TSX common stock or ANTEC common stock, as the case may be, issuable upon the exercise of
options granted to the following individuals in the following amounts: Lambert - 600,000 shares; Sparkman,
Romrell and Embry - 12,500 shares; Solomon - 16,100 shares; Fletcher -15,000 shares; Tamburro - 11,250
shares; Dammeyer, Petty and Wilderotter - 7,500 shares; Skinner - 2,500 shares; Egan - 367,717 shares;
Halverson - 83,733 shares; Margolis - 124,617 shares; Van Wagner - 125,333 shares; all directors and
executive officers of ANTEC as a group 815,432 shares. As a result of and upon completion of the Merger,
existing options for an additional 15,000 shares and 11,250 shares of TSX common stock become vested for Mr.
Fletcher and Mr. Tamburro, respectively.
<F6> Mr. Tamburro is a former officer of TSX.
<F7> Messrs. Dammeyer's and Petty's shares do not include 7,113,500 shares owned by Anixter of which Mr. Petty is
a director and Mr. Dammeyer is a director, president and chief executive officer. Messrs. Dammeyer and Petty
disclaim beneficial ownership of these shares.
<F8> Includes 9,000 shares owned by Mr. Van Wagner's wife. Mr. Van Wagner disclaims beneficial ownership of these
shares.
<F9> Includes 200 shares owned by Mrs. Wilderotter's children. Mrs. Wilderotter disclaims beneficial ownership of
these shares.
</TABLE>
<PAGE> 64
DESCRIPTION OF ANTEC CAPITAL STOCK
-----------------------------------
The authorized capital stock of ANTEC consists of 50,000,000
shares of common stock, par value $.01 per share, and 5,000,000
shares of preferred stock, par value $1.00 per share.
ANTEC Common Stock
- ------------------
Based on the number of shares of ANTEC common stock and TSX
common stock outstanding as of the Record Date and giving effect to
the issuance of the approximately 15,423,726 shares of ANTEC common
stock that will be issued to the stockholders of TSX in the Merger,
there will be approximately 38,419,782 shares of ANTEC common stock
outstanding upon completion of the Merger. In addition, as part of
the Merger, options to purchase an additional 1,744,579 shares of TSX
common stock will be converted into options to purchase ANTEC common
stock. Based on the number of stockholders of record of ANTEC and TSX
as of the Record Date, and assuming no duplication, ANTEC is expected
to have approximately 766 holders of record upon completion of the
Merger.
Holders of ANTEC common stock are entitled to receive ratably
such dividends, if any, as may be declared by the ANTEC Board out of
funds legally available therefor, subject to any preferential dividend
rights of outstanding preferred stock. Upon the liquidation,
dissolution or winding up of ANTEC, the holders of ANTEC common stock
are entitled to receive ratably the net assets of ANTEC available
after the payment of all debts and other liabilities and subject to
the prior rights of any outstanding preferred stock.
Holders of ANTEC common stock are entitled to one vote for each
share held on all matters submitted to a vote of stockholders and do
not have cumulative voting rights. Holders of a majority of the
shares of common stock entitled to vote in any election of directors
may elect all of the directors standing for election.
Holders of common stock have no preemptive, subscription,
redemption or conversion rights. The shares of ANTEC common stock,
when issued to holders of outstanding shares of TSX common stock in
connection with the Merger, will be validly issued, fully paid and
non-assessable.
The rights, preferences and privileges of holders of ANTEC common
stock are subject to, and may be adversely affected by, the rights of
the holders of shares of any series of preferred stock which ANTEC may
designate and issue in the future.
ANTEC Preferred Stock
- ---------------------
ANTEC preferred stock may be issued with such preferences, voting
rights and conversion rights as the ANTEC Board, without further
approval by the stockholders, may determine by duly adopted
resolution. The issuance of preferred stock may have the effect of
<PAGE> 65
delaying, deferring or preventing a change in control of ANTEC. As of
the Record Date, there were no shares of ANTEC preferred stock issued
and outstanding. ANTEC has no present plans to issue any shares of
preferred stock.
Certain Charter and Bylaw Provisions
- ------------------------------------
ANTEC's Certificate incorporates certain provisions permitted
under the DGCL relating to the liability of directors. The provisions
eliminate a director's liability for monetary damages for a breach of
fiduciary duty, including gross negligence, except in circumstances
involving certain wrongful acts, such as the breach of a director's
duty of loyalty or acts and omissions which involve intentional
misconduct or knowing violations of the law. These provisions do not
eliminate a director's duty of care. Moreover, the provisions do not
apply to claims against a director for violation of certain laws,
including federal securities laws. ANTEC's Bylaws contain provisions
to indemnify the directors and officers to the fullest extent
permitted under the DGCL.
Transfer Agent and Registrar
- ----------------------------
The transfer agent and registrar for ANTEC's common stock is The
Bank of New York.
COMPARISON OF RIGHTS OF HOLDERS OF ANTEC
COMMON STOCK AND TSX COMMON STOCK
The rights of stockholders of a corporation are governed by the
laws of the state in which the corporation is incorporated, as well as
the governing instruments of the corporation itself--that is, its
articles (or certificate) of incorporation and bylaws. ANTEC is
incorporated under the laws of the State of Delaware and the rights of
the holders of ANTEC common stock are therefore governed by the DGCL,
the ANTEC Certificate and the ANTEC Bylaws. TSX is incorporated
under the laws of the State of Nevada and the rights of the holders of
TSX common stock are therefore governed by the NRS, the TSX Articles
and the TSX Bylaws. Upon consummation of the Merger, TSX stockholders
will become ANTEC stockholders, and, as a result, their rights will be
governed by the DGCL, the ANTEC Certificate and the ANTEC Bylaws. The
following is a summary of certain material differences between the
DGCL and NRS, as well as differences between the ANTEC Certificate and
ANTEC Bylaws and the TSX Articles and the TSX Bylaws. The TCI
Investment Agreement contains provisions which affect certain
provisions of the TSX Articles and the TSX Bylaws, and TSX is, under
the terms of the TCI Investment Agreement, obligated to amend, at the
request of TCI, the TSX Articles and the TSX Bylaws to cause them
affirmatively to set forth provisions consistent with the provisions
of the TCI Investment Agreement. For further information on the TCI
Investment Agreement, see "CERTAIN AGREEMENTS WITH TCI-- Investment
Agreement."
<PAGE> 66
Number of Directors
- -------------------
TSX. Under the TSX Articles, the number of directors of TSX may
not be less than three directors nor more than nine directors. TSX's
board of directors has currently fixed the number of directors at
five.
ANTEC. The ANTEC Bylaws provide that the number of directors
must be at least one, with the number of directors to be fixed from
time to time by action of the stockholders or of the directors, or, if
the number is not fixed, the number will be two. ANTEC's board of
directors has currently fixed the number of directors at seven; after
the consummation of the Merger, ANTEC's board of directors will be
increased to eight.
Structure of Board
- ------------------
TSX. Under the TSX Articles and TSX Bylaws, the directors are
divided into three classes, with each class serving a staggered term
of three years.
ANTEC. The ANTEC Bylaws provide that each director holds office
until the next annual meeting of stockholders. The entire board of
directors is therefore elected each year. Although Delaware law
allows directors to be divided into three separate classes with
staggered terms of office, neither the ANTEC Certificate nor the ANTEC
Bylaws provide for classification of directors.
Filling of Vacancies and Newly Created Directorships
- ----------------------------------------------------
TSX. Under the TSX Bylaws, any vacancy in the board of directors
or any newly created directorship resulting from an increase in the
authorized number of directors may be filled only by the affirmative
vote of a majority of the board of directors, although less than a
quorum, or by the sole remaining director, or, in the event of the
failure of the Board of Directors or sole remaining director to so
act, or if the Board of Directors so determines, by the stockholders
at the next annual meeting at which directors are to be elected;
PROVIDED, HOWEVER, that, if the holders of any class or classes of
TSX's stock, voting separately, are entitled to elect one or more
directors, vacancies and newly created directorships of such class or
classes may be filled by a majority of the directors elected by such
class or classes then in office, or by a sole remaining director so
elected.
ANTEC. Under the ANTEC Bylaws, any vacancy in the board of
directors or any newly created directorship resulting from an increase
in the authorized number of directors may be filled by election at an
annual meeting or special meeting of stockholders called for that
purpose or by the Board of Directors.
<PAGE> 67
Removal of Directors
- --------------------
TSX. Under the NRS and the TSX Articles, a TSX director may be
removed only upon the affirmative vote of the holders of not less than
two-thirds of the stock of TSX generally entitled to vote in the
election of directors, which vote only may be taken at a meeting of
stockholders called expressly for that purpose. At least 30 days
prior to such meeting of stockholders, written notice of such meeting
must be sent to the director or directors whose removal will be
considered at such meeting.
ANTEC. The ANTEC Bylaws provide that, except as may be otherwise
provided by DGCL, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors. The DGCL
does not provide otherwise.
Stockholder Meetings
- --------------------
TSX. Under the TSX Articles, special meetings of the
stockholders may only be called by a majority of the Board of
Directors. At annual or special meetings of stockholders, only such
new business may be conducted and only such proposals will be acted
upon as have been brought before the annual or special meeting by, or
at the direction of, a majority of the Board of Directors or by any
stockholder who complies with the notice provisions set forth in
Article Eighth of the TSX Articles. See "COMPARISON OF RIGHTS OF
HOLDERS OF ANTEC COMMON STOCK AND TSX COMMON STOCK--Advance Notice of
Nominations and Stockholder Proposals."
ANTEC. Under the ANTEC Bylaws, a special meeting may be called by
the directors or by any officers instructed by the directors to call
the meeting.
Advance Notice of Nominations and Stockholder Proposals
- -------------------------------------------------------
TSX. Under the TSX Articles, a stockholder may nominate
individuals for election as directors or introduce business at an
annual or special meeting only if the stockholder provides advance
written notice of the nomination or proposed business in accordance
with procedures established in the TSX Articles.
ANTEC. The ANTEC Certificate does not require advance notice of
stockholder nominations of directors or of other business to be
considered at an annual or special meeting of stockholders.
Written Consent
- ---------------
TSX. The TSX Articles and Bylaws permit the stockholders to take
action by written consent in lieu of an annual or special meeting of
stockholders, unless the stock of the class from which consent is
sought is listed on the New York Stock Exchange or the American Stock
<PAGE> 68
Exchange or is traded through any other exchange or agency which
requires such action to be taken at a meeting. None of the classes of
TSX stock are currently listed on any such exchange.
ANTEC. The ANTEC Bylaws permit any action required by the DGCL
to be taken at any annual or special meeting of stockholders, or any
action which may be taken at any annual or special meeting of
stockholders, to be taken without a meeting, without prior notice and
without a vote, if consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
consent must be given to those stockholders who have not consented in
writing. The ANTEC Bylaws specifically provide that action taken
pursuant to this paragraph is subject to the provision of the DGCL
regarding stockholder action by written consent in lieu of a meeting.
Amendment of Certificate (or Articles) of Incorporation
- -------------------------------------------------------
TSX. Under the TSX Articles, TSX reserves the right to amend or
repeal any provision contained in the TSX Articles as promulgated or
subsequently restated or as prescribed by law, and all rights and
powers conferred on the stockholders, directors and officers are
subject to this reserved power. Notwithstanding the foregoing, the
affirmative vote of the holders of at least two-thirds (or such
greater proportion as may otherwise be required pursuant to any
specific provision of the TSX Articles) of the stock of TSX entitled
to vote generally in the election of directors is required to amend,
repeal or adopt any provisions inconsistent with the provisions of the
TSX Articles relating to the Board of Directors, action by written
consent, the calling of special meetings of the stockholders, the
procedures to be followed with respect to submission of the proposals
for the conduct of business at stockholder meetings, the personal
liability of the directors and officers of TSX to TSX and to the TSX
stockholders, and the amendment of the TSX Articles and the TSX
Bylaws. Notwithstanding the foregoing, the affirmative vote of
holders of at least four-fifths of the voting stock (as defined in the
provision of the TSX Articles relating to special votes for business
combinations) is required to amend, repeal or adopt any provision
inconsistent with the provision of the TSX Articles relating to
special votes for certain "business combinations."
ANTEC. Under the DGCL, the ANTEC Certificate may be amended if
the Board of Directors adopts a resolution setting forth the amendment
proposed, declares its advisability, and calls either a special
meeting for the consideration of the proposed amendment or directs
that the proposed amendment be considered at the next annual meeting
of stockholders and, at the special or annual meeting of stockholders,
the amendment is approved by the affirmative vote of a majority of the
stockholders entitled to vote.
<PAGE> 69
Amendment of Bylaws
- -------------------
TSX. Under the TSX Articles, the TSX Bylaws may be amended only
by the affirmative vote of the holders of at least two-thirds of the
stock of TSX entitled to vote generally in the election of directors,
or by a resolution adopted by the Board of Directors.
ANTEC. Under the DGCL and the ANTEC Bylaws, the bylaws may be
amended by an affirmative majority vote of either the stockholders or
the board of directors
Required Vote for Certain Business Combinations and Other Anti-
Takeover Provisions
- ---------------------------------------------------------------
TSX. The NRS contains provisions regarding Combinations with
Interested Stockholders and Control Share Acquisitions. These
provisions, however, do not apply to corporations which elect in their
articles of incorporation not to be governed by these provisions. The
TSX Articles expressly provide that TSX will not be governed by the
Combination with Interested Stockholders or Control Share Acquisition
provisions.
Under Article Ninth of the TSX Articles, TSX may not, subject to
certain exceptions discussed below, enter into a "Business
Combination" with an "Interested Stockholder" unless the transaction
has been approved by the holders of at least 80% of the combined
voting power of the then outstanding shares of stock of all classes
and series of TSX entitled to vote generally in the election of
directors. A "Business Combination" is defined to include (a) any
merger or consolidation of TSX or certain of its subsidiaries with an
Interested Stockholder or any corporation or entity which would become
an affiliate or associate of the Interested Stockholder following such
merger or consolidation; (b) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a series
of transactions) to or with an Interested Stockholder of assets having
an aggregate fair market value of $100,000 or more; (c) the issuance
or transfer of any securities of TSX or certain of its subsidiaries
(in one transaction or a series of transactions) to an Interested
Stockholder in exchange for cash, securities or other property having
an aggregate fair market value of $100,000 or more, other than the
issuance of securities upon the conversion of convertible securities
or the exercise of options or warrants of TSX or certain subsidiaries
which were not acquired by such Interested Stockholder from TSX or its
subsidiary at a time when such person was not an Interested
Stockholder; (d) the adoption of a plan or proposal of dissolution or
liquidation of TSX proposed by or on behalf of an Interested
Stockholder; or (e) any reclassification of securities (including a
reverse stock split) or recapitalization of TSX or any merger,
consolidation or share exchange with or involving certain of TSX's
subsidiaries which has the effect of increasing the proportionate
share of any outstanding class of securities of TSX directly or
indirectly owned by an Interested Stockholder. A "Business
Combination" also includes any of the above-described transactions
between TSX and an associate or affiliate of an Interested
<PAGE> 70
Stockholder. An "Interested Stockholder" is defined as any person
(other than TSX or one of its subsidiaries) which (a) is the
beneficial owner directly or indirectly of 10% or more of the
outstanding voting stock of TSX, (b) is an affiliate of TSX and was
the owner of 10% or more of the outstanding voting stock of TSX at any
time within the two-year period immediately prior to the date on which
it is sought to be determined whether such person is an Interested
Stockholder or (c) is the assignee of or has otherwise succeeded to
the beneficial ownership of any shares of the voting stock that were
at any time within the two-year period immediately prior to the date
in question beneficially owned by an Interested Stockholder, if such
assignment or succession occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act.
The heightened stockholder voting requirement of Article Ninth
does not apply if (a) the Board of Directors of TSX has approved, by
resolution, prior to the time that such Interested Stockholder became
an Interested Stockholder, a memorandum of understanding or an
agreement with such Interested Stockholder setting forth, at least
generally, the substance of the terms upon which such transaction will
be consummated, (b) a majority of the disinterested directors
approved by resolution such transaction or (c) the fair market value
of the consideration to be received per share by holders of the voting
stock in the Business Combination is at least equal to the "Highest
Per Share Price" and the form of consideration to be received per
share by holders of the voting stock in the Business Combination in
United States currency or the form of consideration used by the
Interested Stockholder to acquire the largest aggregate fair market
value voting stock which such Interested Stockholder has previously
acquired. A "disinterested director" is defined as (a) any member of
the Board of Directors who is unaffiliated with, and not a nominee of,
the Interested Stockholder and was a member of the Board prior to the
time the Interested Stockholder became an Interested Stockholder or
(b) any successor of a disinterested director who is unaffiliated
with, and not a nominee of, the Interested Stockholder and who is
recommended to succeed a disinterested director by a majority of
disinterested directors then on the Board of Directors. "Fair market
value" means, in the case of stock, the highest closing sales price
during the 30-day period immediately preceding the date in question of
a share of stock on the composite tape for the principal United States
securities exchange on which such stock is listed or on the Nasdaq
Automated Quotations System. In the case of property other than cash
or stock, the fair market value of such property on the date in
question must be determined by a majority of the disinterested
directors in good faith. "Highest Per Share Price" means, with
respect to any class or series of voting stock of TSX, the highest of
(a) the highest price that can be determined, by a majority of the
disinterested directors, to have been paid at any time by an
Interested Stockholder for any share of such class or series of voting
stock or, if such Interested Stockholder has not acquired any voting
stock of such class or series, the highest equivalent price for a
share of such class or series based on the highest price for any other
class or series of voting stock, as determined by a majority vote of
the disinterested directors, and (b) the Fair Market Value per share
of such voting stock, as determined by a majority of the disinterested
<PAGE> 71
directors, immediately prior to the time when the relevant business
combination was first publicly announced or when the Interested
Stockholder became an Interested Stockholder, whichever is higher. In
determining the Highest Per Share Price for any voting stock (a) all
purchases by the Interested Stockholder will be taken into account
regardless of whether the shares were purchased before or after the
Interested Stockholder became an Interested Stockholder and (b) the
Highest Per Share Price will include any brokerage commissions,
transfer taxes and soliciting dealer fees or other value paid in
connection with such purchases.
ANTEC. ANTEC is subject to Section 203 of the DGCL. Section 203
of the DGCL would prohibit a "business combination" (as defined in
Section 203, generally including mergers, sales and leases of assets,
issuances of securities and similar transactions) by ANTEC or a
subsidiary with an "interested stockholder" (as defined in Section
203, generally the beneficial owner of 15 percent or more of ANTEC's
voting stock) within three years after the person or entity becomes an
interested stockholder, unless (a) prior to the person or entity
becoming an interested stockholder, the business combination or the
transaction pursuant to which such person or entity became an
interested stockholder was approved by the ANTEC Board, (b) upon the
consummation of the transaction in which the person or entity became
an interested stockholder, the interested stockholder holds at least
85 percent of the voting stock of ANTEC (excluding for purposes of
determining the number of shares outstanding, shares held by persons
who are both officers and directors of ANTEC and shares held by
certain employee benefit plans) or (c) the business combination is
approved by the ANTEC Board and by the holders of at least two-thirds
of the outstanding voting stock of ANTEC, excluding shares held by the
interested stockholder of the corporation.
Inspection of Records
- ---------------------
TSX. Under the NRS, a stockholder may inspect and make extracts
from a corporation's stock ledger, but the stockholder must have held
its shares for at least six months or have received the authorization
of holders of at least 5% of the outstanding shares of the
corporation. In order to review a corporation's books of accounts and
financial records, a stockholder must either be a stockholder of
record and own at least 15% of all issued and outstanding shares or
receive the authorization for such review of holders of at least 15%
of the outstanding shares of the corporation.
ANTEC. The DGCL provides all stockholders the right to inspect a
corporation's stock ledger and corporate records for any proper
purpose.
Payment of Dividends
- --------------------
TSX. Under Nevada law, dividends may be paid as long as the
company can pay its debts as such debts become due in the usual course
of business or the corporation's total assets exceed total liabilities
<PAGE> 72
plus the amount that would be needed to satisfy any preferences on
liquidation.
ANTEC. Delaware law limits a corporation's ability to pay
dividends by requiring that dividends be paid only from (a) the amount
by which the corporation's assets exceed the sum of its liabilities
and capital, or (b) current fiscal year net profit.
Limitation on Personal Liability of Directors and Officers
- ----------------------------------------------------------
TSX. The TSX Articles provide that, to the fullest extent
permitted by law, the directors and officers of TSX will not be
personally liable to TSX or its stockholders for damages for breach of
fiduciary duty as directors and officers, except for liability for
acts and omissions involving intentional misconduct, fraud or a
knowing violation of law, or for the payment of unlawful distributions
in willful or grossly negligent violation of the provisions of the NRS
regarding distributions.
ANTEC. The DGCL's limitation of liability provision is similar
but does not allow a corporation to limit the liability of a director
for breaches of the duty of loyalty and does not apply to officers.
ANTEC's Certificate limits the liability of its directors to the
greatest extent permitted by the DGCL.
Duties of Directors
- -------------------
TSX. Nevada law permits a Board of Directors to consider, in
connection with a change or potential change in control of the
corporation, (a) the interests of the corporation's employees,
suppliers, creditors and customers, (b) the economy of the state and
nation, (c) the interests of the community and of society and (d) the
long-term as well as short-term interests of the corporation and its
stockholders, including the possibility that these interests may be
best served by the continued independence of the corporation.
ANTEC. The DGCL does not contain a specific provision
elaborating on the duties of a board of directors with respect to the
best interests of the corporation. Delaware courts have permitted
directors to consider various constituencies provided that there be
some rationally related benefit to the stockholders.
APPRAISAL OR DISSENTERS' RIGHTS
-------------------------------
The DGCL and the NRS both provide procedures for stockholders to
assert appraisal or dissenters' rights with respect to certain
transactions. However, under both the DGCL and the NRS, appraisal or
dissenters' rights are not available for shares of stock listed on a
national securities exchange or on an interdealer quotation system by
Nasdaq when, in the resulting merger or consolidation, the
stockholders will receive shares of the stock of the surviving
corporation which also is listed on a national securities exchange or
a Nasdaq interdealer quotation system. Therefore, holders of ANTEC
<PAGE> 73
common stock and TSX common stock are not entitled to appraisal or
dissenters' rights in connection with the Merger because ANTEC common
stock and TSX common stock are both listed on the Nasdaq Stock
Market's National Market and the consideration which such holders will
be entitled to receive in the Merger will consist solely of ANTEC
common stock, which will continue to be listed on the National Market.
PRO FORMA FINANCIAL INFORMATION
-------------------------------
The following unaudited pro forma condensed consolidated
financial statements give effect to the Merger using the pooling of
interests method of accounting, after giving effect to the pro forma
adjustments described in the accompanying notes. See "THE
MERGER--Accounting Treatment." The unaudited pro forma condensed
consolidated balance sheet gives effect to the Merger as if it had
occurred on September 30, 1996. The remaining information gives
effect to the Merger as if it had occurred January 1, 1993. We
prepared this information by adding or combining the historical
amounts of each company. This information is presented for
illustrative purposes only and is not necessarily indicative of the
operating results or financial position that would have occurred had
the Merger been consummated at the dates indicated, nor is it
necessarily indicative of the future operating results or financial
position of the merged companies.
The reporting requirements governing the preparation of pro forma
financial information require that they be prepared using fiscal years
that end within 93 days of each other. TSX's fiscal year ends April
30, and ANTEC's fiscal year ends December 31. As a result, TSX's
historical statements of operations had to be adjusted to within 93
days of ANTEC's year end. Therefore, the unaudited pro forma
condensed consolidated statements of operations for the years ended
December 31, 1995, 1994 and 1993, represent ANTEC's fiscal years that
ended on those dates combined with TSX's twelve months ended the last
Saturday in October 1995, 1994 and 1993, respectively. The unaudited
pro forma condensed consolidated statement of operations for the nine
months ended September 30, 1996 and 1995 represents ANTEC's nine
months ended September 30, 1996 and 1995, combined with TSX's nine
months ended the last Saturday in July 1996 and 1995, respectively.
The information is only a summary and you should read it in
conjunction with our historical financial statements (and related
notes) contained in the annual reports and other information that we
have filed with the SEC. See "WHERE YOU CAN FIND MORE INFORMATION" on
page 82.
<PAGE> 74
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
(In thousands, except per share data)
Historical Historical Merger Pro Forma
ANTEC TSX (a)(c) Adjustments(d) Combined
---------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Net sales $ 483,132 $ 69,488 $ (2,400) (b) $ 550,220
Cost of sales 367,919 39,467 (2,400) (b) 404,986
--------- --------- --------- ---------
Gross profit 115,213 30,021 - 145,234
Operating expenses:
Selling, general and
administrative expenses 85,226 15,079 - 100,305
Amortization of goodwill 3,734 - - 3,734
--------- --------- --------- ---------
88,960 15,079 - 104,039
--------- --------- --------- ---------
Operating income 26,253 14,942 - 41,195
Other expense (income):
Interest expense (income) and other, net 6,957 (879) 6,078
Gain on sale of Canadian business (3,835) - - (3,835)
--------- --------- --------- ----------
Income before income tax expense 23,131 15,821 - 38,952
Income tax expense 11,465 2,883 - 14,348
--------- --------- --------- ---------
Net income $ 11,666 $12,938 $ - $ 24,604
========= ========= ========= =========
Net income per common and common
equivalent share $ 0.50 $ 0.80 $ 0.62
========= ========== =========
Weighted average common and
common equivalent shares 23,486 16,177 39,663
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed consolidated financial statements.
<PAGE> 75
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1995
(In thousands, except per share data)
Historical Historical Merger Pro Forma
ANTEC TSX (a)(c) Adjustments(d) Combined
---------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Net sales $ 489,699 $ 60,274 $ (3,206)(b) $ 546,767
Cost of sales 372,544 33,504 (3,206)(b) 402,842
--------- --------- --------- ---------
Gross profit 117,155 26,770 - 143,925
Operating expenses:
Selling, general and
administrative expenses 90,705 12,307 - 103,012
Amortization of goodwill 3,555 - - 3,555
Non-recurring items 21,681 - - 21,681
--------- --------- --------- ---------
115,941 12,307 - 128,248
--------- --------- --------- ---------
Operating income 1,214 14,463 - 15,677
Interest expense (income) and other, net 8,352 (87) - 8,265
--------- --------- --------- ---------
Income (loss) before income tax
expense (benefit) (7,138) 14,550 - 7,412
Income tax expense (benefit) (686) 5,863 - 5,177
--------- --------- --------- ---------
Net income (loss) $ (6,452) $ 8,687 $ - $ 2,235
========= ========= ========= =========
Net income (loss) per common and common $ (0.28) $ 0.54 $ 0.06
equivalent share ========= ========= =========
Weighted average common and
common equivalent shares 23,018 16,021 39,039
========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed consolidated financial statements.
<PAGE> 76
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(In thousands, except per share data)
Historical Historical Merger Pro Forma
ANTEC TSX (a)(c) Adjustments(d) Combined
---------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Net sales $ 658,237 $ 84,272 $ (4,274) (b) $ 738,235
Cost of sales 504,167 47,055 (4,274) (b) 546,948
--------- --------- --------- ---------
Gross profit 154,070 37,217 - 191,287
Operating expenses:
Selling, general and
administrative expenses 117,869 16,820 - 134,689
Amortization of goodwill 4,817 - - 4,817
Non-recurring items 21,681 - - 21,681
--------- ---------- --------- ---------
144,367 16,820 - 161,187
--------- ---------- --------- ---------
Operating income 9,703 20,397 - 30,100
Interest expense (income) and other, net 10,972 (171) - 10,801
--------- --------- --------- ---------
Income (loss) before income tax expense (1,269) 20,568 - 19,299
Income tax expense 2,350 8,147 - 10,497
--------- --------- --------- ---------
Net income (loss) $ (3,619) $ 12,421 $ - $ 8,802
========= ========= ========= =========
Net income (loss) per common and common
equivalent share $ (0.16) $ 0.77 $ 0.23
========= ========= =========
Weighted average common and
common equivalent shares 22,355 16,062 38,417
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed consolidated financial statements.
<PAGE> 77
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
(In thousands, except per share data)
Historical Historical Merger Pro Forma
ANTEC TSX (a)(c) Adjustments(d) Combined
---------- --------- -------------- ---------
<S> <C> <C> <C> <C>
Net sales $ 553,510 $ 52,939 $ (4,546) (b) $ 601,903
Cost of sales 433,898 33,611 (4,546) (b) $ 462,963
--------- --------- --------- ---------
Gross profit 119,612 19,328 - 138,940
Operating expenses:
Selling, general and
administrative expenses 77,442 12,569 - 90,011
Amortization of goodwill 3,160 - - 3,160
--------- --------- --------- ---------
80,602 12,569 - 93,171
--------- --------- --------- ---------
Operating income 39,010 6,759 - 45,769
Interest expense and other, net 4,506 1,021 - 5,527
--------- --------- --------- ---------
Income from continuing operations
before income tax expense 34,504 5,738 - 40,242
Income tax expense 15,616 1,914 - 17,530
--------- --------- --------- ---------
Income from continuing operations $ 18,888 $ 3,824 $ - $ 22,712
========= ========= ========= =========
Income from continuing operations
per common and common
equivalent share $ 0.89 $ 0.25 $ 0.62
========= ========= =========
Weighted average common and
common equivalent shares 21,278 15,467 36,745
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements.
<PAGE> 78
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1993
(In thousands, except per share data)
Historical Historical Merger Pro Forma
ANTEC TSX (a)(c) Adjustments(d) Combined
---------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Net sales $ 427,601 $ 36,376 $ (4,149) (b) $ 459,828
Cost of sales 344,648 26,179 (4,149) 366,678
--------- --------- --------- (b) ---------
Gross profit 82,953 10,197 - 93,150
Operating expenses:
Selling, general and
administrative expenses 57,830 10,160 - 67,990
Amortization of goodwill 2,772 - - 2,772
--------- --------- --------- ---------
60,602 10,160 - 70,762
--------- --------- --------- ---------
Operating income 22,351 37 - 22,388
Interest expense and other, net 3,329 1,691 - 5,020
--------- --------- --------- ---------
Income (loss) from continuing operations
before income tax expense 19,022 (1,654) - 17,368
Income tax expense 8,972 126 - 9,098
--------- --------- --------- ---------
Income (loss) from continuing operations $ 10,050 $ (1,780) $ - $ 8,270
========= ========= ========= =========
Pro forma income from continuing
operations (e) $ 11,545 $ 9,765
========= =========
Pro forma income from continuing
operations per common and common
equivalent share (e):
Primary $ 0.56 $ (0.27) $ 0.36
========= ========= ==========
Fully diluted $ 0.55 $ (0.27) $0.35
========= ========= ==========
Pro forma weighted average common and
common equivalent shares (f):
Primary 20,739 6,586 27,325
========= ========= =========
Fully diluted 20,970 6,586 27,556
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
condensed consolidated financial statements
<PAGE> 79
ANTEC CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
----------------------------------------------------------------
(a) Certain amounts in the historical financial statements of TSX
have been reclassified to conform to ANTEC's presentation in the
pro forma combined presentation.
(b) As a result of the Merger, sales from TSX to ANTEC are
eliminated. The impact of the related gross margin on
inventories purchased by ANTEC from TSX in ending inventory is
not significant.
(c) All issued share and per share data appearing in the unaudited
pro forma condensed consolidated statements of operations gives
effect to the TSX stock splits on a two-for-one basis in the form
of a 100% stock dividend on November 4, 1994, and on a three-for-
two basis in the form of a 50% stock dividend on July 18, 1996.
(d) ANTEC expects to achieve cost savings through the consolidation
and elimination of certain duplicative functions and operational
and logistical efficiencies. The cost savings are expected to be
achieved in various amounts at various times during the year
subsequent to closing. No adjustment has been included in the
unaudited pro forma condensed consolidated financial statements
for the anticipated cost savings. Nor has any adjustment been
included for the possibility that ANTEC may not be able to
maintain the favorable income tax rate TSX reflected in its Form
10-Q for the quarter ended July 27, 1996, because of ANTEC's
greater United States presence and the manner in which ANTEC may
operate the business conducted by TSX.
(e) The net income per share information for the year ended December
31, 1993 for ANTEC was prepared on a pro forma basis giving
effect to the initial public offering of 5.4 million shares of
ANTEC common stock in September 1993. The ANTEC pro forma
presentation assumes the initial public offering had occurred on
December 31, 1991, and the net proceeds were used as of such date
to reduce long-term debt by approximately $59.6 million and
redeem all of the ANTEC preferred stock then outstanding for
approximately $30 million.
ANTEC pro forma net income for 1993 reflects the reduction of
interest expense, net of income taxes, and accordingly, an
increase in net income as follows (in thousands):
<PAGE> 80
Year Ended
December 31, 1993
-----------------
Historical . . . . . . . . . $10,050
Interest expense reduction . 2,441
Income tax effect . . . . . . (946)
-------
Pro forma net income . . . . $11,545
=======
(f) The weighted average shares outstanding further reflect the
effect of dilutive common equivalent (stock options) shares
outstanding.
<PAGE> 81
<TABLE>
<CAPTION>
ANTEC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
(In thousands)
Historical Historical Merger Pro Forma
ANTEC TSX (a) Adjustments(b) Combined
---------- --------- -------------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,845 $28,368 $ - $ 30,213
Accounts receivables, net 102,920 13,585 - 116,505
Inventories, primarily finished goods 108,565 14,408 - 122,973
Other current assets 3,353 878 - 4,231
--------- --------- --------- ---------
Total current assets 216,683 57,239 - 273,922
Property, plant and equipment, net 26,033 9,547 - 35,580
Goodwill, net 168,374 - - 168,374
Deferred income taxes, net 12,000 2,040 - 14,040
Other assets 18,652 881 - 19,533
--------- --------- --------- ---------
$ 441,742 $ 69,707 - $ 511,449
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,908 $ 4,518 - $ 46,426
Accrued compensation, benefits
and related taxes 18,249 1,112 - 19,361
Other current liabilities 22,426 4,010 3,240 29,676
--------- --------- --------- ---------
Total current liabilities 82,583 9,640 3,240 95,463
Long-term debt 109,661 - - 109,661
--------- --------- --------- ----------
Total liabilities 192,244 9,640 3,240 205,124
Stockholders' equity:
Common stock 229 154 - 383
Capital in excess of par value 217,403 35,149 - 252,552
Retained earnings 31,860 24,963 (3,240) 53,583
Cumulative translation adjustments 6 (199) - (193)
--------- --------- --------- ---------
Total stockholders' equity 249,498 60,067 (3,240) 306,325
--------- --------- --------- ---------
$ 441,742 $69,707 $ - $ 511,449
========= ========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed consolidated financial statements.
<PAGE> 82
ANTEC CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in millions except per share amounts)
(a) Certain amounts in the historical financial statements of TSX
have been reclassified to conform to ANTEC's presentation in the
pro forma combined presentation.
(b) Reflects the estimated liability for fees and other expenses
related to the Merger which are expected to be $5.4 million ($3.2
million net of tax). The amount of merger-related costs included
herein is estimated using information presently available and
could change as additional information becomes known. In
addition, ANTEC and TSX expect to incur additional employee-
related and other restructuring charges as a result of the
Merger. The amount of such charges is not currently
determinable.
LEGAL MATTERS
-------------
The validity of the ANTEC common stock to be issued in connection
with the Merger will be passed upon by Schiff Hardin & Waite, Chicago,
Illinois.
EXPERTS
-------
The consolidated financial statements of ANTEC, as of December
31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, appearing in ANTEC's Annual Report on Form 10-K for
the year ended December 31, 1995, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting
and auditing.
The consolidated financial statements of TSX, as of April 30,
1996 and 1995, and for each of the years in the three-year period
ended April 30, 1996, have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------
ANTEC and TSX file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy
any reports, statements or other information we file at the SEC's
public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
<PAGE> 83
available to the public from commercial document retrieval services
and at the web site maintained by the SEC at "http://www.sec.gov."
ANTEC filed a Registration Statement on Form S-4 to register with
the SEC the ANTEC common stock to be issued to TSX stockholders in the
Merger. This Joint Proxy Statement-Prospectus is a part of that
Registration Statement and constitutes a prospectus of ANTEC in
addition to being a proxy statement of ANTEC and TSX for the special
meetings. As allowed by SEC rules, this Joint Proxy Statement-
Prospectus does not contain all the information you can find in the
Registration Statement or the exhibits to the Registration Statement.
Some of the information that you may want to consider in deciding
how to vote with respect to the Merger is not physically included in
this Proxy Statement-Prospectus, but rather is "incorporated by
reference" to documents that have been filed by ANTEC or TSX with the
SEC. The information that is incorporated by reference consists of:
Documents Filed by ANTEC (SEC File No. 000-22336):
* Annual Report on Form 10-K, as amended, for the
year ended December 31, 1995;
* Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September
30, 1996;
* Current Report on Form 8-K dated November 1, 1996.
Documents Filed by TSX (SEC File No. 001-11814):
* Annual Report on Form 10-K for the year ended
April 30, 1996;
* Quarterly Reports on Form 10-Q for the quarters
ended July 27, 1996 and October 26, 1996;
* Current Reports on Form 8-K dated June 14, 1996,
and November 7, 1996.
All documents filed by ANTEC or TSX under the Exchange Act after
the date of this Joint Proxy Statement-Prospectus and prior to the
special meetings also are incorporated by reference into this Joint
Proxy Statement-Prospectus.
Any statement contained in a document that is incorporated by
reference shall be deemed to be modified or superseded for all
purposes to the extent that a statement contained herein (or in any
other document that is subsequently filed with the SEC and
incorporated by reference) modifies or is contrary to such previous
statement.
All information contained or incorporated by reference in this
Joint Proxy Statement-Prospectus relating to ANTEC and its
subsidiaries has been supplied by ANTEC, and all information relating
to TSX and its subsidiaries has been supplied by TSX.
<PAGE> 84
If you are a stockholder, we may have sent you some of the
documents incorporated by reference, but you can obtain any of them
through us or the SEC. Documents incorporated by reference are
available from us without charge, excluding all exhibits unless we
have specifically incorporated by reference an exhibit in this Joint
Proxy Statement-Prospectus. Stockholders may obtain documents
incorporated by reference in this Joint Proxy Statement-Prospectus by
requesting them in writing or by telephone from the appropriate party
at the following addresses:
ANTEC Corporation TSX Corporation
2850 West Golf Road 4849 North Mesa, Suite 200
Rolling Meadows, Illinois 60008 El Paso, Texas 79912
Attention: Secretary Attention: Secretary
(847) 439-4444 (915) 543-4815
If you would like to request documents from us, please do so by
January 22, 1996, to receive them before the special meetings.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED
BY REFERENCE IN THIS JOINT PROXY STATEMENT-PROSPECTUS TO VOTE ON THE
MERGER. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS JOINT PROXY
STATEMENT-PROSPECTUS. THIS JOINT PROXY STATEMENT-PROSPECTUS IS DATED
DECEMBER 31, 1996. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THE JOINT PROXY STATEMENT-PROSPECTUS IS ACCURATE AS OF
ANY DATE OTHER THAN SUCH DATE, AND NEITHER THE MAILING OF THE JOINT
PROXY STATEMENT-PROSPECTUS TO STOCKHOLDERS NOR THE ISSUANCE OF ANTEC
COMMON STOCK IN THE MERGER SHALL CREATE ANY IMPLICATION TO THE
CONTRARY. THIS JOINT PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES,
OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH, OR TO
ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION.
<PAGE>
<PAGE> 85
GLOSSARY OF DEFINED TERMS
------------------------
The following are definitions of certain capitalized terms
defined in the Joint Proxy Statement-Prospectus and referenced in the
foregoing Index to Defined Terms. Each such term should be considered
in the context in which it is used in the Joint Proxy Statement
Prospectus.
<TABLE>
<S> <C>
1996 ANTEC Proxy Statement--ANTEC's Proxy Statement DBS--direct broadcast satellite.
used in connection with its 1996 Annual
Meeting of Stockholders. DGCL--the General Corporation Law of the State of
Delaware.
Allen & Co.--Allen & Company Incorporated, TSX's
financial advisors. Exchange Act--Securities Exchange Act of 1934, as
amended.
Alternate Transaction--this term is defined on page 50
of the Joint Proxy Statement-Prospectus. Exchange Agent--The Bank of New York.
Anixter--Anixter International Inc. Exchange Ratio--the ratio contemplated by the Plan of
Merger for the exchange of one share of ANTEC
Anixter Voting Agreement--the agreement between TSX common stock for each share of TSX common
and Anixter pursuant to which Anixter has stock.
agreed to vote its shares of TSX common stock
in favor of the Plan of Merger and the Form 8-K--Current Report on Form 8-K, as filed with
transactions contemplated by the Plan of the SEC.
Merger. See "VOTING AGREEMENTS."
Form 10-K--Annual Report on Form 10-K, as filed with
ANTEC--ANTEC Corporation, a Delaware corporation. the SEC.
ANTEC Board--the Board of Directors of ANTEC. Form 10-Q--Quarterly Report on Form 10-Q, as filed
with the SEC.
ANTEC Bylaws--the Bylaws of ANTEC.
Form S-4--Registration Statement on Form S-4, as filed
ANTEC Certificate--the Certificate of Incorporation of with the SEC.
ANTEC.
FTC--the Federal Trade Commission.
ANTEC Registration Rights Agreement--the agreement
between ANTEC and TCI, substantially identical GAAP--generally accepted accounting principles.
to the TSX Registration Rights Agreement,
which reflects the conversion of TSX common Hart-Scott-Rodino Act--the Hart-Scott-Rodino Antitrust
stock into ANTEC common stock. Improvements Act of 1976, as amended.
Articles of Merger--a brief formal document that will IRS--the Internal Revenue Service.
be filed with the Secretary of State of the
State of Nevada in order to complete the Joint Proxy Statement-Prospectus--the proxy statement
Merger. and prospectus regarding the Merger, as
distributed to holders of ANTEC and TSX common
Bank of New York--ANTEC's transfer agent and the stock.
Exchange Agent for the Merger.
Merger--the merger of Merger Sub with and into TSX,
Code--the Internal Revenue Code of 1986, as amended. pursuant to which TSX will survive as the
wholly-owned subsidiary of ANTEC.
Combined Company Shares--this term is defined on page 61. Rule 144--Rule 144 of the Securities Act.
<PAGE> 86
Merger Sub--TSX Acquisition Corporation, a Nevada Rule 145--Rule 145 of the Securities Act.
corporation and a newly-formed, wholly-owned
subsidiary of ANTEC Corporation. Secretary--the corporate secretary of either ANTEC or
TSX, as the case may be.
Nasdaq--the National Association of Securities
Dealers, Inc. Securities Act--the Securities Act of 1933, as
amended.
Nasdaq Stock Market's National Market--A national
inter-dealer electronic stock market owned and Securities Exchange Act--the Securities Exchange Act
managed by Nasdaq. of 1934, as amended.
NRS--Nevada Revised Statutes. Summary--the summary highlighting selected information
contained in the Joint Proxy Statement-
Plan of Merger--the Plan of Merger dated as of October Prospectus, which begins on page 9.
28, 1996, among ANTEC, TSX and Merger Sub.
TCI--Tele-Communications, Inc.
Private Securities Litigation Reform Act--The Private
Securities Litigation Reform Act of 1995. TCI Investment Agreement--the Investment Agreement
dated March 14, 1994, between TSX and TCI.
Record Date--December 23, 1996, the record date for
the determination of the holders of record of TCI Registration Rights Agreement--the Registration
shares of ANTEC common stock and TSX common Rights Agreement between TSX and TCI.
stock entitled to notice of and to vote at the
special meetings. TCI Voting Agreement--the voting agreement between TCI
and ANTEC pursuant to which TCI has agreed to
Registration Statement--the registration statement on vote the shares of TSX Common Stock owned or
Form S-4 (together with all amendments, controlled by TCI in favor of the Merger.
exhibits and schedules) ANTEC has filed with
the SEC under the Securities Act, relating to TSX--TSX Corporation, a Nevada Corporation.
the shares of ANTEC common stock that will be
issued to holders of TSX common stock in TSX Articles--the Articles of Incorporation of TSX.
connection with the Merger.
TSX Board--the board of directors of TSX.
TSX Bylaws--the Bylaws of TSX.
<PAGE> 87
APPENDIX A
PLAN OF MERGER
AMONG
ANTEC CORPORATION,
TSX CORPORATION
AND
TSX ACQUISITION CORPORATION
OCTOBER 28, 1996
<PAGE> 88
TABLE OF CONTENTS
Page
ARTICLE I -- THE MERGER . . . . . . . . . . . . . . . . . . . . . 92
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . 92
1.2 Effective Time . . . . . . . . . . . . . . . . . . . . 92
1.3 Effects of the Merger . . . . . . . . . . . . . . . . . 92
1.4 Conversion of TSX Common Stock; Treatment of ANTEC
Common Stock . . . . . . . . . . . . . . . . . . . . . 93
1.5 Options . . . . . . . . . . . . . . . . . . . . . . . . 93
1.6 Articles of Incorporation . . . . . . . . . . . . . . . 94
1.7 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . 94
1.8 Tax Consequences . . . . . . . . . . . . . . . . . . . 94
1.9 Plans for Management Succession . . . . . . . . . . . . 94
1.10 Closing . . . . . . . . . . . . . . . . . . . . . . . . 94
ARTICLE II -- CONVERSION OF SHARES . . . . . . . . . . . . . . . 94
2.1 ANTEC to Make Shares Available . . . . . . . . . . . . 94
2.2 Exchange of Share Certificates . . . . . . . . . . . . 95
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF TSX . . . . . . 96
3.1 Corporate Organization . . . . . . . . . . . . . . . . 96
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . 97
3.3 Authority; No Violation . . . . . . . . . . . . . . . . 98
3.4 Consents and Approvals . . . . . . . . . . . . . . . . 99
3.5 Financial Statements . . . . . . . . . . . . . . . . . 100
3.6 Broker's Fees . . . . . . . . . . . . . . . . . . . . . 100
3.7 Absence of Certain Changes or Events . . . . . . . . . 101
3.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . 101
3.9 Taxes and Tax Returns . . . . . . . . . . . . . . . . . 101
3.10 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 103
3.11 Compliance with Applicable Law . . . . . . . . . . . . 103
3.12 Certain Contracts . . . . . . . . . . . . . . . . . . . 103
3.13 Undisclosed Liabilities . . . . . . . . . . . . . . . . 104
3.14 Patents, Trademarks, etc . . . . . . . . . . . . . . . 104
3.15 Environmental Liability . . . . . . . . . . . . . . . . 105
3.16 Fairness Opinion . . . . . . . . . . . . . . . . . . . 105
3.17 Pooling of Interests . . . . . . . . . . . . . . . . . 105
3.18 Officers and Other Affiliates . . . . . . . . . . . . . 105
3.19 Approval of Board of Directors . . . . . . . . . . . . 105
3.20 Representations and Warranties . . . . . . . . . . . . 105
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF ANTEC AND
MERGER SUB . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.1 Corporate Organization . . . . . . . . . . . . . . . . 106
4.2 Capitalization . . . . . . . . . . . . . . . . . . . . 107
4.3 Authority; No Violation . . . . . . . . . . . . . . . . 108
4.4 Consents and Approvals . . . . . . . . . . . . . . . . 109
4.5 Financial Statements . . . . . . . . . . . . . . . . . 109
4.6 Broker's Fees . . . . . . . . . . . . . . . . . . . . . 110
4.7 Absence of Certain Changes or Events . . . . . . . . . 110
4.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . 110
4.9 Taxes and Tax Returns . . . . . . . . . . . . . . . . . 111
<PAGE> 89
4.10 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 112
4.11 Compliance with Applicable Law . . . . . . . . . . . . 112
4.12 Certain Contracts . . . . . . . . . . . . . . . . . . . 112
4.13 Undisclosed Liabilities . . . . . . . . . . . . . . . . 113
4.14 Patents, Trademarks, etc. . . . . . . . . . . . . . . . 114
4.15 Environmental Liability . . . . . . . . . . . . . . . . 114
4.16 Pooling of Interests . . . . . . . . . . . . . . . . . 114
4.17 Officers and Other Affiliates . . . . . . . . . . . . . 114
4.18 Ownership of TSX Stock . . . . . . . . . . . . . . . . 114
4.19 Representations and Warranties . . . . . . . . . . . . 115
ARTICLE V -- COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . 115
5.1 Conduct of Businesses Prior to the Effective Time . . . 115
5.2 Forbearances . . . . . . . . . . . . . . . . . . . . . 115
ARTICLE VI -- ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . 117
6.1 Regulatory Matters; Cooperation with Respect to Filing 118
6.2 Access to Information . . . . . . . . . . . . . . . . . 119
6.3 Stockholders' Approvals . . . . . . . . . . . . . . . . 121
6.4 Legal Conditions to Merger . . . . . . . . . . . . . . 121
6.5 Affiliates; Publication of Combined Financial Results . 121
6.6 Listing of ANTEC Common Stock . . . . . . . . . . . . . 122
6.7 Indemnification; Directors' and Officers' Insurance . . 122
6.8 Additional Agreements . . . . . . . . . . . . . . . . . 125
6.9 Advice of Changes . . . . . . . . . . . . . . . . . . . 125
6.10 Performance of Contracts . . . . . . . . . . . . . . . 125
6.11 No Conduct Inconsistent with this Agreement . . . . . . 126
6.12 Registration of ANTEC Common Stock. . . . . . . . . . . 127
6.13 Amendment to Registration Rights Agreement. . . . . . 127
6.14 Accounting Treatment . . . . . . . . . . . . . . . . . 127
ARTICLE VII -- CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 127
7.1 Conditions to Each Party's Obligation To Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . 127
(a) Stockholder Approval . . . . . . . . . . . . . . . 127
(b) Nasdaq-NMS Listing . . . . . . . . . . . . . . . . 127
(c) Other Approvals . . . . . . . . . . . . . . . . . 127
(d) Third Party Approvals . . . . . . . . . . . . . . 128
(e) Registration Statements . . . . . . . . . . . . . 128
(f) No Injunctions or Restraints; Illegality . . . . . 128
(g) Federal Tax Opinion . . . . . . . . . . . . . . . 128
(h) Pooling of Interests . . . . . . . . . . . . . . . 129
7.2 Conditions to Obligations of TSX . . . . . . . . . . . 129
(a) Representations and Warranties . . . . . . . . . . 129
(b) Performance of Obligations of ANTEC . . . . . . . 129
(c) No Material Adverse Change . . . . . . . . . . . . 130
(d) Opinions of Counsel to ANTEC . . . . . . . . . . . 130
(e) Comfort Letters . . . . . . . . . . . . . . . . . 130
(f) Availability of Pooling . . . . . . . . . . . . . 130
7.3 Conditions to Obligations of ANTEC . . . . . . . . . . 130
(a) Representations and Warranties . . . . . . . . . . 130
(b) Performance of Obligations of TSX . . . . . . . . 130
(c) No Material Adverse Change . . . . . . . . . . . . 131
<PAGE> 90
(d) Opinions of Counsel to TSX . . . . . . . . . . . . 131
(e) Comfort Letter . . . . . . . . . . . . . . . . . . 131
(f) Availability of Pooling . . . . . . . . . . . . . 131
ARTICLE VIII -- TERMINATION AND AMENDMENT . . . . . . . . . . . . 131
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . 131
8.2 Effect of Termination . . . . . . . . . . . . . . . . . 133
8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . 133
8.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . 133
ARTICLE IX -- GENERAL PROVISIONS . . . . . . . . . . . . . . . . 134
9.1 Non-survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . 134
9.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . 134
9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . 134
9.4 Interpretation . . . . . . . . . . . . . . . . . . . . 135
9.5 Counterparts . . . . . . . . . . . . . . . . . . . . . 136
9.6 Entire Agreement . . . . . . . . . . . . . . . . . . . 136
9.7 Governing Law . . . . . . . . . . . . . . . . . . . . . 136
9.8 Severability . . . . . . . . . . . . . . . . . . . . . 136
9.9 Publicity . . . . . . . . . . . . . . . . . . . . . . . 136
9.10 Assignment; Third Party Beneficiaries . . . . . . . . . 137
Exhibit A -- Articles of Incorporation of Merger Sub
Exhibit B -- Form of By-laws of Merger Sub
Exhibit C -- DELETED
Exhibit D -- Registration Rights Agreement
Exhibit E -- Form of Opinion of Ernst & Young LLP
Exhibit F -- Form of Opinion of Schiff Hardin & Waite and
ANTEC's General Counsel
Exhibit G -- Form of Opinion of Kemp, Smith, Duncan & Hammond,
P.C.
Exhibit H -- Form of Opinion of Kummer, Kaempfer Bonner &
Renshaw
Exhibit I -- Form of Availability of Pooling Opinion of Ernst &
Young LLP
Exhibit J -- Form of Availability of Pooling Opinion of KPMG
Peat Marwick, LLP
Schedule 1.9 -- Directors and Officers
Schedule 3.1 -- TSX Investments and Agreements to Invest in
Voting Stock and Equity Securities; Certain
Matters Agreed Upon as Not Constituting a
"Material Adverse Effect"; Minute Books
Schedule 3.2 -- TSX Outstanding Options and Share
Reservations
Schedule 3.4 -- TSX Consents and Approval of Third Parties
Needed
Schedule 3.7 -- TSX Absence of Certain Changes or Events
Schedule 3.8 -- TSX Legal Proceedings
Schedule 3.12 -- TSX Contracts Not Contained in Form 10-K
Schedule 3.13 -- TSX Undisclosed Liabilities
Schedule 3.14 -- TSX Intellectual Property
<PAGE> 91
Schedule 3.18 -- TSX Officers and Affiliates/Modifications
Schedule 4.1 -- ANTEC Investments
Schedule 4.2 -- ANTEC Outstanding Options
Schedule 4.4 -- ANTEC Consents and Approvals
Schedule 4.7 -- ANTEC Absence of Certain Changes or Events
Schedule 4.8 -- ANTEC Legal Proceedings
Schedule 4.9 -- ANTEC Tax Issues
Schedule 4.12 -- ANTEC Contracts
Schedule 4.17 -- ANTEC Officers and Affiliates/Modifications
<PAGE> 92
PLAN OF MERGER
PLAN OF MERGER (this "Agreement"), dated October 28, 1996,
by and among ANTEC CORPORATION, 2850 West Golf Road, Rolling Meadows,
Illinois 60008, a Delaware corporation ("ANTEC"), TSX CORPORATION,
4849 North Mesa, Suite 200, El Paso, Texas 79912, a Nevada
corporation ("TSX"), and TSX ACQUISITION CORPORATION, 2850 West Golf
Road, Rolling Meadows, Illinois 60008, a Nevada corporation ("Merger
Sub").
WHEREAS, the Boards of Directors of ANTEC, TSX and Merger
Sub have determined that it is in the best interests of their
respective corporations and their stockholders to consummate the
business combination transaction provided for herein in which Merger
Sub will merge with and into TSX (the "Merger"), so that TSX is the
resulting corporation (hereinafter sometimes called the "Resulting
Corporation") in the Merger; and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of
this Agreement, in accordance with the Nevada Revised Statutes
Chapters 78 and 92A (the "NRS"), at the Effective Time (as defined in
Section 1.2), Merger Sub shall merge with and into TSX, which shall be
the Resulting Corporation in the Merger and shall continue its
corporate existence under the laws of the State of Nevada. Upon
consummation of the Merger, the separate corporate existence of Merger
Sub shall terminate.
1.2 Effective Time. The Merger shall become effective upon
the filing of Articles of Merger with the Secretary of State of the
State of Nevada (the "Nevada Secretary"). The parties shall each use
reasonable efforts to cause Articles of Merger to be filed on the
Closing Date (as defined in Section 1.10). The term "Effective Time"
shall be the date and time when the Merger becomes effective, in
accordance with this Section 1.2.
1.3 Effects of the Merger. At and after the Effective
Time, the Merger shall have the effects set forth in Section 92A.250
of the NRS.
<PAGE> 93
1.4 Conversion of TSX Common Stock; Treatment of ANTEC
Common Stock.
(a) At the Effective Time, subject to Section 2.2, by
virtue of the Merger and without any action on the part of TSX,
or the holder of any securities, each share of the common stock,
$.01 par value, of TSX (the "TSX Common Stock") issued and
outstanding immediately prior to the Effective Time shall be
converted into the right to receive one share (the "TSX Exchange
Ratio") of the common stock, par value $.01 per share, of ANTEC
(the "ANTEC Common Stock").
(b) All of the shares of TSX Common Stock converted
into ANTEC Common Stock pursuant to this Article I shall no
longer be outstanding and shall automatically be canceled and
shall cease to exist as of the Effective Time, and each
certificate (each a "Common Stock Certificate") previously
representing any such shares of TSX Common Stock shall thereafter
represent only the right to receive a certificate representing
the number of whole shares of ANTEC Common Stock into which the
Common Stock Certificates previously representing shares of TSX
Common Stock have been converted pursuant to this Section 1.4.
Such Common Stock Certificates shall be exchanged for
certificates representing whole shares of ANTEC Common Stock
issued in consideration therefor upon the surrender of such
Common Stock Certificates in accordance with Section 2.2, without
any interest thereon. If, prior to the Effective Time, the
outstanding shares of ANTEC Common Stock or TSX Common Stock
shall have been increased, decreased, changed into or exchanged
for a different number or kind of shares or securities as a
result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other
similar change in capitalization, then an appropriate and
proportionate adjustment shall be made to the TSX Exchange Ratio.
(c) At the Effective Time, all shares of TSX Common
Stock that are owned by TSX as treasury stock, if any, shall be
canceled and shall cease to exist, and no stock of ANTEC or other
consideration shall be delivered in exchange therefor.
(d) Each share of Merger Sub Common Stock that is
issued and outstanding immediately prior to the Effective Time
shall at the Effective Time be converted into one share of TSX so
that after the Merger the only outstanding shares of TSX shall be
owned by ANTEC.
(e) Each share of ANTEC Common Stock outstanding prior
to the Merger shall, after the Effective Time, continue to be an
outstanding share of ANTEC Common Stock.
1.5 Options. At the Effective Time, each option granted by
TSX to purchase shares of TSX Common Stock which is outstanding and
unexercised immediately prior thereto shall cease to represent a right
<PAGE> 94
to acquire shares of TSX Common Stock and shall be converted
automatically into an option to purchase the same number of shares of
ANTEC Common Stock at the same exercise price and otherwise subject to
the terms of the TSX stock option plans and agreements under which
they were issued and which relate thereto, as certain of such
agreements are amended as described in Schedule 3.18 to the TSX
Disclosure Schedules. The foregoing may, at ANTEC's election, be
accomplished through the amendment of existing options or plans or
through the issuance of replacement options.
1.6 Articles of Incorporation. Subject to the terms and
conditions of this Agreement, at the Effective Time, an amended and
restated Articles of Incorporation of TSX shall be filed with the
Nevada Secretary so that the Amended and Restated Articles of
Incorporation of Merger Sub, substantially in the form attached as
Exhibit A hereto, shall be the Amended and Restated Articles of
Incorporation of the Resulting Corporation until thereafter amended in
accordance with applicable law.
1.7 By-Laws. Subject to the terms and conditions of this
Agreement, at the Effective Time, the By-Laws of TSX substantially in
the form attached as Exhibit B hereto shall be the By-Laws of the
Resulting Corporation until thereafter amended in accordance with
applicable law.
1.8 Tax Consequences. It is intended that the Merger shall
constitute a reorganization within the meaning of Section 368(a)(i)(A)
of the Code, and that this Agreement shall constitute a "plan of
reorganization" for the purposes of Section 368 of the Code.
1.9 Plans for Management Succession. At the Effective
Time, without further action, the Boards of Directors and the officers
of ANTEC and TSX shall be as set forth in Schedule 1.9 to the ANTEC
Disclosure Schedules. The Board of Directors of ANTEC shall take all
action necessary to elect the individuals named in Schedule 1.9 to the
ANTEC Disclosure Schedules as directors and officers.
1.10 Closing. Subject to the terms and conditions of this
Agreement, including but not limited to the provisions of Article VII
of this Agreement, the closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date and at a place to be specified by the
parties, which shall be no later than the third business day after the
date on which all of the conditions precedent to the Merger set forth
in Sections 7.1, 7.2 and 7.3 have occurred, unless such date is
extended by mutual agreement of the parties (the "Closing Date").
ARTICLE II
CONVERSION OF SHARES
2.1 ANTEC to Make Shares Available. At or prior to the
Effective Time, ANTEC shall deposit, or shall cause to be deposited,
with a bank, trust company or other entity reasonably acceptable to
<PAGE> 95
TSX (the "Exchange Agent"), for the benefit of the holders of TSX
Common Stock Certificates (collectively, the "Certificates"), for
exchange in accordance with this Article II, certificates representing
the shares of ANTEC Common Stock (such certificates for shares of
ANTEC Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Conversion
Fund") to be issued pursuant to Section 1.4 and paid pursuant to
Section 2.2(a) in exchange for outstanding shares of TSX Common Stock.
2.2 Exchange of Share Certificates.
(a) As soon as practicable after the Effective Time,
and in no event later than ten business days thereafter, ANTEC
shall cause the Exchange Agent to mail to each holder of record
of one or more Certificates a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificates in exchange for
certificates representing the shares of ANTEC Common Stock into
which the shares of TSX Common Stock represented by such
Certificate or Certificates shall have been converted pursuant to
this Agreement. Upon proper surrender of a Certificate for
exchange to the Exchange Agent, together with such properly
completed letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares
of ANTEC Common Stock to which such holder of TSX Common Stock
shall have become entitled pursuant to the provisions of Article
I and the Certificate so surrendered shall forthwith be canceled.
(b) If any certificate representing shares of ANTEC
Common Stock is to be issued in a name other than that in which
the Certificate surrendered in exchange therefor is registered,
it shall be a condition of the issuance thereof that the
Certificate so surrendered shall be properly endorsed (or
accompanied by an appropriate instrument of transfer) and
otherwise in proper form for transfer, and that the person
requesting such exchange shall pay to the Exchange Agent in
advance any transfer or other taxes required by reason of the
issuance of a certificate representing shares of ANTEC Common
Stock in any name other than that of the registered holder of the
Certificate surrendered, or required for any other reason, or
shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not payable.
(c) After the Effective Time, there shall be no
transfers on the stock transfer books of TSX of the shares of TSX
Common Stock which were issued and outstanding immediately prior
to the Effective Time. If, after the Effective Time,
Certificates representing such shares are presented for transfer
to the Exchange Agent, they shall be canceled and exchanged for
<PAGE> 96
certificates representing shares of ANTEC Common Stock as
provided in this Article II.
(d) Any portion of the Conversion Fund that remains
unclaimed by the stockholders of TSX for 12 months after the
Effective Time shall be paid to ANTEC. Any stockholders of TSX
who have not theretofore complied with this Article II shall
thereafter look only to ANTEC for the issuance of certificates
representing shares of ANTEC Common Stock and any unpaid
dividends and distributions on the ANTEC Common Stock deliverable
in respect of each share of TSX Common Stock without any interest
thereon. Notwithstanding the foregoing, none of ANTEC, Merger
Sub, TSX, the Exchange Agent or any other person shall be liable
to any former holder of shares of TSX Common Stock, for any
amount delivered in good faith to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(e) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or
destroyed and, if reasonably required by ANTEC, the posting by
such person of a bond in such amount as ANTEC may determine is
reasonably necessary as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of ANTEC Common Stock deliverable in
respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TSX
Except as disclosed in the TSX disclosure schedules
delivered to ANTEC concurrently herewith (the "TSX Disclosure
Schedules") as referenced herein, TSX hereby represents and warrants
to ANTEC as follows:
3.1 Corporate Organization.
(a) TSX is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada. TSX has the corporate power and authority to own or
lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature
of the business conducted by it or the character or location of
the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse
Effect (as defined below) on TSX. True and complete copies of
the Articles of Incorporation and By-Laws of TSX, as in effect as
of the date of this Agreement, have previously been made
available by TSX to ANTEC. As used in this Agreement, the term
<PAGE> 97
"Material Adverse Effect" means, with respect to TSX, ANTEC or
Merger Sub, as the case may be, a material adverse effect on the
condition (financial or otherwise), business, properties,
business relationships, prospects or results of operations of
such party and its Subsidiaries taken as a whole, but without
intending to be inclusive of all other matters, it is agreed that
the effect thereon of the items described on Schedule 3.1 to the
TSX Disclosure Schedules or on Schedule 4.1 to the ANTEC
Disclosure Schedules shall not singularly or in the aggregate
with other events constitute a Material Adverse Effect. The word
"Subsidiary" when used with respect to any party means any
corporation, partnership, limited liability company, or other
organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes.
(b) As of the date of this Agreement the only direct
or indirect Subsidiaries of TSX (the "TSX Subsidiaries") are as
set forth in Exhibit 21 to the TSX Form 10-K (as defined in
Section 3.5). Except as set forth on Schedule 3.1 to the TSX
Disclosure Schedules and for investments individually less than
$500,000 and in the aggregate less than $1,000,000, TSX does not
own, directly or indirectly, and has not agreed to make any such
investment in, any voting stock or equity securities of any
corporation, partnership, limited liability company, or other
organization, whether incorporated or unincorporated, other than
the TSX Subsidiaries.
(c) Each TSX Subsidiary (i) is duly organized and
validly existing as a corporation under the laws of its
jurisdiction of organization, (ii) is duly qualified to do
business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing
of property or the conduct of its business requires it to be so
qualified and in which the failure to be so qualified would have
a Material Adverse Effect on TSX, and (iii) has all requisite
corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted.
(d) Except as set forth in Schedule 3.1 to the TSX
Disclosure Schedules, the minute books of TSX and of each of the
TSX Subsidiaries have been made available to ANTEC and accurately
reflect in all material respects all corporate meetings held or
actions taken since incorporation by the stockholders and Boards
of Directors of TSX and each TSX Subsidiary, respectively
(including committees of the Boards of Directors of TSX and the
TSX Subsidiaries).
3.2 Capitalization.
(a) The authorized capital stock of TSX consists of
50,000,000 shares of TSX Common Stock, of which, as of September
30, 1996, 15,423,666 shares were issued and outstanding, and
10,000,000 shares of preferred stock, $.01 par value, of which,
<PAGE> 98
as of September 30, 1996, no shares were issued and outstanding.
As of September 30, 1996, no shares of TSX Common Stock were held
in treasury. All of the issued and outstanding shares of TSX
Common Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Except in
connection with the plans and agreements disclosed on Schedule
3.2 to the TSX Disclosure Schedules, TSX does not have and is not
bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the
purchase or issuance of any shares of TSX Common Stock or any
other equity securities of TSX or any securities representing the
right to purchase or otherwise receive any shares of the capital
stock of TSX. Except in connection with the plans and agreements
disclosed on Schedule 3.2 to the TSX Disclosure Schedules, no
shares of TSX Common Stock have been reserved for issuance.
Except as disclosed in Schedule 3.2 to the TSX Disclosure
Schedules, since September 30, 1996, TSX has not issued any
shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock except upon
exercise of stock options outstanding on September 30, 1996 and
stock options issued thereafter as permitted by Section 5.2(b) of
this Agreement. TSX has no fractional shares outstanding.
(b) TSX owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the TSX
Subsidiaries, free and clear of any liens, pledges, charges,
encumbrances and security interests whatsoever ("Liens"). All of
the shares of capital stock of TSX are duly authorized and
validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the
ownership thereof. No TSX Subsidiary has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity
security of such TSX Subsidiary or any securities representing
the right to purchase or otherwise receive any shares of capital
stock or any other equity security of such TSX Subsidiary.
3.3 Authority; No Violation.
(a) TSX has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the
Board of Directors of TSX. The Board of Directors of TSX has
directed that this Agreement and the transactions contemplated
hereby be submitted to TSX's stockholders for approval at a
meeting of such stockholders and, except for the adoption of this
Agreement by the affirmative vote of the holders of a majority of
the outstanding shares of TSX Common Stock, no other corporate
proceedings on the part of TSX are necessary to approve this
<PAGE> 99
Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered
by TSX and (assuming due authorization, execution and delivery by
ANTEC and Merger Sub) constitutes a valid and binding obligation
of TSX, enforceable against TSX in accordance with its terms.
(b) Neither the execution and delivery of this
Agreement by TSX nor the consummation by TSX of the transactions
contemplated hereby, nor compliance by TSX with any of the terms
or provisions hereof, will (i) violate any provision of the
Articles of Incorporation or By-Laws of TSX, or (ii) assuming
that the consents and approvals referred to in Section 3.4 are
duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to TSX or any of the TSX Subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with,
result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, result
in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the
creation of any Lien upon any of the respective properties or
assets of TSX or any of the TSX Subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which TSX or any of its Subsidiaries
is a party, or by which they or any of their respective
properties or assets may be bound or affected, except (in the
case of clause (y) above) for such violations, conflicts,
breaches or defaults which, in the aggregate, will not have or be
reasonably likely to have a Material Adverse Effect on TSX.
3.4 Consents and Approvals. Except as set forth in
Schedule 3.4 of the TSX Disclosure Schedules, no consents or approvals
of or filings or registrations with any court, administrative agency
or commission or other governmental authority or instrumentality (each
a "Governmental Entity") or with any third party are necessary in
connection with the execution and delivery by TSX of this Agreement
and the consummation by TSX of the Merger and the other transactions
contemplated hereby except for (a) the filing with the Department of
Justice and Federal Trade Commission of any filings required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), (b) the filing with the Securities and Exchange Commission (the
"SEC") of a joint proxy statement (the "Joint Proxy Statement") in
definitive form relating to the meetings of TSX and ANTEC's
stockholders to be held in connection with this Agreement and the
transactions contemplated hereby and the registration statement on
Form S-4 (the "S-4") in which such Joint Proxy Statement will be
included as a prospectus, (c) the filing of Articles of Merger with
the Nevada Secretary under the NRS, (d) such filings and approvals as
are required to be made or obtained under the securities or "Blue Sky"
laws of various states in connection with the issuance of the shares
of ANTEC Common Stock pursuant to this Agreement, (e) the approval of
<PAGE> 100
an application to list the ANTEC Common Stock on The Nasdaq Stock
Market's National Market, subject to official notice of issuance, and
(f) the approval of this Agreement by the requisite vote of the
stockholders of TSX.
3.5 Financial Statements. TSX has previously made
available to ANTEC copies of (a) the consolidated balance sheets of
TSX and its Subsidiaries as of April 30, 1995 and 1996, and the
related consolidated statements of income, changes in stockholders'
equity and cash flows for the fiscal years ended April 30, 1994, 1995
and 1996, inclusive, as reported in TSX's Annual Report on Form 10-K
for the fiscal year ended April 30, 1996 (the "TSX Form 10-K") filed
with the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), in each case accompanied by the audit report of
KPMG Peat Marwick LLP, independent public accountants with respect to
TSX, and (b) the unaudited consolidated balance sheet of TSX and the
TSX Subsidiaries as of July 27, 1996, and the related unaudited
consolidated statements of income, cash flows and changes in
stockholders' equity for the three-month period then ended as reported
in TSX's Quarterly Report on Form 10-Q for the period ended July 27,
1996 filed with the SEC under the Exchange Act (the "TSX First Quarter
10-Q"). The April 30, 1996 and July 27, 1996 consolidated balance
sheets of TSX (including the related notes, where applicable) fairly
present the consolidated financial position of TSX and the TSX
Subsidiaries as of the dates thereof, and the other financial
statements referred to in this Section 3.5 (including the related
notes, where applicable) fairly present the results of the
consolidated operations and changes in stockholders' equity and
consolidated financial position of TSX and the TSX Subsidiaries for
the respective fiscal periods or as of the respective dates therein
set forth, subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount; each of such
statements (including the related notes, where applicable) comply in
all material respects with applicable accounting requirements and with
the published rules, regulations and interpretations of the SEC with
respect thereto; and each of such statements (including the related
notes, where applicable) has been prepared in all material respects in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except, in each
case, as indicated in such statements or in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-Q. The
books and records of TSX and the TSX Subsidiaries have been, and are
being, maintained in all material respects in accordance with GAAP and
any other applicable legal and accounting requirements and reflect
only actual transactions.
3.6 Broker's Fees. Other than TSX's agreement with Allen &
Company Incorporated to serve as a financial advisor to TSX and
provide a fairness opinion in connection with the Merger and related
transactions contemplated by this Agreement, a copy of which agreement
has been provided to ANTEC, neither TSX nor any TSX Subsidiary nor any
of their respective officers or directors has employed any financial
advisor, broker or finder or incurred any liability for any financial
<PAGE> 101
advising, broker's fees, commissions or finder's fees in connection
with the Merger or related transactions contemplated by this
Agreement.
3.7 Absence of Certain Changes or Events.
(a) Except as publicly disclosed in TSX Reports (as
defined in Section 3.10) filed prior to the date hereof or as
disclosed in Schedules 3.1 or 3.7 to the TSX Disclosure
Schedules, since July 27, 1996, (i) TSX and the TSX Subsidiaries
taken as a whole have not incurred any material liability, except
in the ordinary course of their business, and (ii) no event has
occurred which has had, individually or in the aggregate, a
Material Adverse Effect on TSX or is reasonably likely to have a
Material Adverse Effect on ANTEC.
(b) Except as publicly disclosed in the TSX Reports
filed prior to the date hereof or as disclosed in Schedules 3.1
or 3.7 to the TSX Disclosure Schedules or as contemplated by this
Agreement, since July 27, 1996, TSX and each TSX Subsidiary have
carried on their respective businesses in all material respects
in the ordinary and usual course.
3.8 Legal Proceedings.
(a) Except as set forth in Schedule 3.8 to the TSX
Disclosure Schedules or as would not have a Material Adverse
Effect on TSX, there are no pending or, to the best of TSX's
knowledge, threatened, legal, administrative, arbitration or
other proceedings, claims, actions or governmental or regulatory
investigations of any nature against TSX or any of the TSX
Subsidiaries or their respective properties, assets, operations
or business, or challenging the validity or propriety of the
transactions contemplated by this Agreement.
(b) Except as would not have a Material Adverse Effect
on TSX, there is no injunction, order, judgment, decree, or
regulatory restriction imposed upon TSX, any of the TSX
Subsidiaries or the assets of TSX or any of the TSX Subsidiaries.
3.9 Taxes and Tax Returns.
(a) Each of TSX and the TSX Subsidiaries has duly
filed all federal, state, county, foreign and, to the best of
TSX's knowledge, local information returns and tax returns
required to be filed by it on or prior to the date hereof (all
such returns being accurate and complete in all material
respects) and has duly paid or made provisions for the payment of
all Taxes (as defined in Section 3.9(b)) and other governmental
charges which have been incurred or are due or claimed to be due
from it by federal, state, county, foreign or local taxing
authorities on or prior to the date of this Agreement (including,
<PAGE> 102
without limitation, if and to the extent applicable, those due in
respect of its properties, income, business, capital stock,
deposits, franchises, licenses, sales and payrolls) other than
Taxes or other charges which are not yet delinquent or are being
contested in good faith and have not been finally determined.
From TSX's emergence from bankruptcy in fiscal year 1988 through
the date hereof, the income tax returns of TSX and the TSX
Subsidiaries have never been examined by the Internal Revenue
Service (the "IRS"). There are no material disputes pending, or
claims asserted for, Taxes or assessments upon TSX or any of the
TSX Subsidiaries for which TSX does not have adequate reserves,
nor has TSX or any of the TSX Subsidiaries given any currently
effective waivers extending the statutory period of limitation
applicable to any federal, state, county, foreign or local income
tax return for any period. In addition, (i) proper and accurate
amounts have been withheld by TSX and each of the TSX
Subsidiaries from their employees for all prior periods in
compliance in all material respects with the tax withholding
provisions of applicable federal, state, foreign and local laws,
except where failure to do so would not have a Material Adverse
Effect on TSX, (ii) federal, state, foreign, county and local
returns which are accurate and complete in all material respects
have been filed by TSX and each of the TSX Subsidiaries for all
periods for which returns were due with respect to income tax
withholding, Social Security and unemployment taxes, (iii) for
purposes of TSX's books and records and financial statements,
Taxes have been computed in accordance with all applicable laws,
(iv) the amounts shown on such federal, state, foreign, local or
county returns to be due and payable have been paid in full or
adequate provision therefor has been included by TSX in its
consolidated financial statements as of April 30, 1996, and (v)
there are no Tax liens upon any property or assets of TSX or any
of the TSX Subsidiaries except liens for current taxes not yet
due or that, individually or in the aggregate, would not have a
Material Adverse Effect on TSX. Neither TSX nor any of the TSX
Subsidiaries has been required to include in income any
adjustment pursuant to Section 481 of the Code by reason of a
voluntary change in accounting method initiated by TSX or any of
the TSX Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method. Except as
set forth in the financial statements described in Section 3.5 or
as disclosed in Schedule 3.7 to the TSX Disclosure Schedules,
neither TSX nor any of its Subsidiaries has entered into a
transaction which is being accounted for as an installment
obligation under Section 453 of the Code.
(b) As used in this Agreement, the term "Tax" or
"Taxes" means all federal, state, county, local, and foreign
income, excise, gross receipts, gross income, ad valorem,
profits, gains, property, capital, sales, transfer, use, payroll,
employment, severance, withholding, duties, intangibles,
franchise, backup withholding, and other taxes, charges, levies
<PAGE> 103
or like assessments together with all penalties and additions to
tax and interest thereon.
3.10 SEC Reports. TSX has previously made available to
ANTEC an accurate and complete copy of each (a) final registration
statement, prospectus, report, schedule and definitive proxy statement
filed since October 1, 1993 by TSX with the SEC pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act (the "TSX Reports") and prior to the date hereof and (b)
communication mailed by TSX to its stockholders since October 1, 1993
and prior to the date hereof. None of the TSX Reports or such
communications to stockholders contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances in which they were made, not misleading,
except that information as of a later date shall be deemed to modify
information as of an earlier date. Since October 1, 1993, TSX has
timely filed all TSX Reports and other documents required to be filed
by it under the Securities Act and the Exchange Act, and, as of their
respective dates, all TSX Reports complied in all material respects
with the published rules and regulations of the SEC with respect
thereto.
3.11 Compliance with Applicable Law. TSX and each of the
TSX Subsidiaries hold all licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are
not in default under any, applicable laws, statutes, orders, rules,
regulations, policies and/or guidelines of any Governmental Entity
relating to TSX or any of the TSX Subsidiaries, except where the
failure to hold such license, franchise, permit or authorization or
such noncompliance or default would not, individually or in the
aggregate, have a Material Adverse Effect on TSX.
3.12 Certain Contracts.
(a) Except as set forth in Schedules 3.12 or 3.18 to
the TSX Disclosure Schedules or as contained as an exhibit to the
TSX Form 10-K, neither TSX nor any of its Subsidiaries is a party
to or bound by:
(i) any contract, arrangement, commitment or
understanding (whether written or oral) which, upon the
consummation of the transactions contemplated by this
Agreement will (either alone or upon the occurrence of any
additional acts or events) result in any payment (including,
without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due from TSX, ANTEC
or Merger Sub or any of their respective Subsidiaries to any
officer, director or employee thereof;
<PAGE> 104
(ii) any contract, arrangement, commitment or
understanding (whether written or oral) which would
materially restrict the conduct of any line of business; or
(iii) any contract, arrangement, commitment or
understanding (whether written or oral), including any stock
option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement, or the value of
any of the benefits of which will be calculated on the basis
of any of the transactions contemplated by this Agreement.
Each contract, arrangement, commitment or understanding of the
type described in this Section 3.12(a), whether or not set forth
in the TSX Disclosure Schedules, is referred to herein as a "TSX
Contract," and, except as disclosed on Schedules 3.8 or 3.18 to
the TSX Disclosure Schedules, neither TSX nor any of the TSX
Subsidiaries knows of, or has received notice of, any violation
of the above by any of the other parties thereto, which,
individually or in the aggregate, would have a Material Adverse
Effect on TSX or ANTEC.
(b) Except as set forth on Schedule 3.12, (i) except
as would not, individually or in the aggregate, have a Material
Adverse Effect on TSX, each TSX Contract is valid and binding on
TSX or any of the TSX Subsidiaries, as applicable, and is in full
force and effect, (ii) TSX and each of the TSX Subsidiaries has
performed all obligations required to be performed by it to date
under each TSX Contract, and (iii) no event or condition exists
which constitutes or, after notice or lapse of time or both,
would constitute, a default on the part of TSX or any of the TSX
Subsidiaries under any such TSX Contract.
3.13 Undisclosed Liabilities. Except as described in
Schedule 3.1 or 3.7 to the TSX Disclosure Schedules and for those
liabilities that are fully reflected or reserved against on the
consolidated balance sheet of TSX included in the TSX First-Quarter
10-Q or the TSX Form 10-K and for liabilities incurred in the ordinary
course of business consistent with past practice since July 27, 1996,
neither TSX nor any of the TSX Subsidiaries has incurred any liability
of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) that, either alone or when
combined with all similar liabilities, has had, or could reasonably be
expected to have, a Material Adverse Effect on TSX.
3.14 Patents, Trademarks, etc. TSX and each of the TSX
Subsidiaries have all patents, trademarks, trade names, service marks,
trade secrets, copyrights and licenses and other proprietary
intellectual property rights and licenses as are necessary in
connection with the businesses of TSX and each of the TSX
Subsidiaries, the lack of which would have a Material Adverse Effect
<PAGE> 105
on TSX, and except as disclosed in Schedule 3.14 to the TSX Disclosure
Schedules, TSX does not have any knowledge of any conflict with the
rights of TSX and each of the TSX Subsidiaries therein or any
knowledge of any conflict by them with the rights of others therein
which, insofar as reasonably can be foreseen, could have a Material
Adverse Effect on TSX.
3.15 Environmental Liability. There are no legal,
administrative, arbitration or other proceedings, claims, actions,
causes of action, private environmental investigations or remediation
activities or governmental investigations of any nature pending or, to
the best of TSX's knowledge, threatened against TSX seeking to impose,
or that could reasonably result in the imposition, on TSX of any
liability or obligation arising under common law or under any local,
state, federal or foreign environmental statute, regulation or
ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA") which, insofar as reasonably can be foreseen, could
have a Material Adverse Effect on TSX. To the best of TSX's
knowledge, there is no reasonable basis for any such proceeding,
claim, action or governmental investigation that would impose any such
liability or obligation which, insofar as reasonably can be foreseen,
could have a Material Adverse Effect on TSX. TSX is not subject to
any agreement, order, judgment, decree, letter or memorandum by or
with any court, governmental authority, regulatory agency or third
party imposing any such liability or obligation which, insofar as
reasonably can be foreseen, could have a Material Adverse Effect on
TSX.
3.16 Fairness Opinion. TSX has received the written opinion
of Allen & Company Incorporated, financial advisors to TSX, dated the
date hereof, to the effect that the consideration to be received in
the Merger by TSX's stockholders is fair to the stockholders of TSX
from a financial point of view.
3.17 Pooling of Interests. As of the date of this
Agreement, after discussions with KPMG Peat Marwick LLP, TSX has no
reason to believe that the Merger will not qualify as a "pooling of
interests" for accounting purposes.
3.18 Officers and Other Affiliates. At or prior to the date
of this Agreement, the contracts and other arrangements with the
officers and other affiliates of TSX have been implemented or modified
as described in Schedule 3.18 to the TSX Disclosure Schedules.
3.19 Approval of Board of Directors. The Board of Directors
of TSX has approved, prior to the date hereof, the Merger and all
related transactions, including the Voting Agreement referred to in
Section 4.18, pursuant to subsection (a) of Article Ninth of the
Articles of Incorporation of TSX and the applicable provisions of NRS.
3.20 Representations and Warranties. Other than the
representations and warranties contained in this Article III, TSX
<PAGE> 106
makes no representations and warranties in connection with this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ANTEC AND MERGER SUB
Except as disclosed in the ANTEC disclosure schedules
delivered to TSX concurrently herewith (the "ANTEC Disclosure
Schedules") as referenced herein, ANTEC and Merger Sub hereby
represent and warrant to TSX as follows:
4.1 Corporate Organization.
(a) ANTEC is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. ANTEC has the corporate power and authority to own or
lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature
of the business conducted by it or the character or location of
the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse
Effect on ANTEC. Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada. Merger Sub has not engaged in any business (other
than certain organizational matters) since it was incorporated
and does not have any contractual liabilities, commitments, or
obligations (other than pursuant to this Agreement) or any assets
(other than cash representing its initial capitalization). True
and complete copies of the Certificate of Incorporation and By-
Laws of ANTEC, and the Articles of Incorporation and By-Laws of
Merger Sub, each as in effect as of the date of this Agreement,
have previously been made available by ANTEC to TSX.
(b) As of the date of this Agreement, the only direct
or indirect Subsidiaries of ANTEC (the "ANTEC Subsidiaries") are
as set forth in Schedule 4.1 to the ANTEC Disclosure Schedules.
Except as set forth on Schedule 4.1 to the ANTEC Disclosure
Schedules and for investments individually less than $500,000 and
in the aggregate less than $1,000,000, ANTEC does not own,
directly or indirectly, and has not agreed to make any such
investment in, any voting stock or equity securities of any
corporation, partnership, limited liability company, or other
organization, whether incorporated or unincorporated, other than
the ANTEC Subsidiaries.
(c) Each ANTEC Subsidiary (i) is duly organized and
validly existing as a corporation under the laws of its
jurisdiction of organization, (ii) is duly qualified to do
business and in good standing in all jurisdictions (whether
<PAGE> 107
federal, state, local or foreign) where its ownership or leasing
of property or the conduct of its business requires it to be so
qualified and in which the failure to be so qualified would have
a Material Adverse Effect on ANTEC, and (iii) has all requisite
corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted.
(d) The minute books of ANTEC and of each of the ANTEC
Subsidiaries have been made available to TSX and accurately
reflect in all material respects all corporate meetings held or
actions taken since incorporation by the stockholders and Boards
of Directors of ANTEC and each ANTEC Subsidiary, respectively
(including committees of the Boards of Directors of ANTEC and the
ANTEC Subsidiaries).
4.2 Capitalization.
(a) The authorized capital stock of ANTEC consists of
50,000,000 shares of ANTEC Common Stock, of which, as of
September 30, 1996, 22,895,461 shares were issued and
outstanding, and 5,000,000 shares of preferred stock, par value
$1.00 per share, of which, as of September 30, 1996 no shares
were issued and outstanding. As of September 30, 1996, no shares
of ANTEC Common Stock were held in treasury. All of the issued
and outstanding shares of ANTEC Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights, with no personal liability
attaching to the ownership thereof. The Authorized capital stock
of Merger Sub consists of 1,000 shares as common stock, $.01 par
value, of which, as of the date of this Agreement, 100 shares are
validly issued and outstanding, fully paid and non-assessable.
Except in connection with the plans and agreements as set forth
on Schedule 4.2 to the ANTEC Disclosure Schedules, ANTEC does not
have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character
calling for the purchase or issuance of any shares of the capital
stock of ANTEC. Except in connection with plans and agreements
disclosed on Schedule 4.2 to the ANTEC Disclosures Schedules, no
shares of ANTEC Common Stock have been reserved for issuance.
Since September 30, 1996, ANTEC has not issued any shares of its
capital stock or any securities convertible into or exercisable
for any shares of its capital stock except upon exercise of
employee stock options outstanding on September 30, 1996 and
except for stock options, SARs and other benefits granted to
employees of ANTEC in January 1997 consistent with its prior
practices.
(b) ANTEC owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the
ANTEC Subsidiaries, free and clear of any Liens. All of the
shares of capital stock of each of the ANTEC Subsidiaries are
duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal
<PAGE> 108
liability attaching to the ownership thereof. No ANTEC
Subsidiary has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of
capital stock or any other equity security of such ANTEC
Subsidiary or any securities representing the right to purchase
or otherwise receive any shares of capital stock or any other
equity security of such ANTEC Subsidiary.
4.3 Authority; No Violation.
(a) Each of ANTEC and Merger Sub has full corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery by each of ANTEC and Merger Sub of this Agreement
and the consummation by each of ANTEC and Merger Sub of the
transactions contemplated on its part hereby have been duly and
validly approved by its Board of Directors. The Board of
Directors of ANTEC has directed that this Agreement and the
transactions contemplated hereby be submitted to ANTEC's
stockholders for approval at a meeting of such stockholders and,
except for the adoption of this Agreement by the affirmative vote
of the holders of a majority of the shares of ANTEC Common Stock
represented at the meeting, no other corporate proceedings on the
part of ANTEC or Merger Sub are necessary to approve this
Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered
by ANTEC and Merger Sub and (assuming due authorization,
execution and delivery by TSX) constitutes a valid and binding
obligation of ANTEC and Merger Sub, enforceable against ANTEC and
Merger Sub in accordance with its terms.
(b) Neither the execution and delivery of this
Agreement by ANTEC and Merger Sub nor the consummation by ANTEC
and Merger Sub of the transactions contemplated hereby, nor
compliance by ANTEC and Merger Sub with any of the terms or
provisions hereof, will (i) violate any provision of the
Certificate of Incorporation or By-Laws of ANTEC, or the Articles
of Incorporation or By-Laws of Merger Sub, or (ii) assuming that
the consents and approvals referred to in Section 4.4 are duly
obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to ANTEC or any of the ANTEC Subsidiaries or any of
their respective properties or assets, or (y) violate, conflict
with, result in a breach of any provision of or the loss of any
benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective
properties or assets of ANTEC or any of the ANTEC Subsidiaries
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease,
<PAGE> 109
agreement or other instrument or obligation to which ANTEC or any
of the ANTEC Subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected,
except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, in the aggregate, will not
have or be reasonably likely to have a Material Adverse Effect on
ANTEC.
4.4 Consents and Approvals. Except as set forth in
Schedule 4.4 to the ANTEC Disclosure Schedules, no consents or
approvals of or filings or registrations with any Governmental Entity
or with any third party are necessary in connection with the execution
and delivery by ANTEC of this Agreement and the consummation by ANTEC
of the Merger and the other transactions contemplated hereby except
for (a) the filing with the Department of Justice and Federal Trade
Commission of any filings required under the HSR Act, (b) the filing
with the SEC of the Joint Proxy Statement and the S-4 in which such
Joint Proxy Statement will be included as a prospectus, (c) the
filing of Articles of Merger with the Nevada Secretary under the NRS,
(d) such filings and approvals as are required to be made or obtained
under the securities or "Blue Sky" laws of various states in
connection with the issuance of the shares of ANTEC Common Stock
pursuant to this Agreement, (e) the approval of an application to list
the ANTEC Common Stock on The Nasdaq Stock Market's National Market,
subject to official notice of issuance, and (f) the approval of this
Agreement by the requisite vote of the stockholders of TSX.
4.5 Financial Statements. ANTEC has previously made
available to TSX copies of (a) the consolidated balance sheets of
ANTEC and its Subsidiaries as of December 31, 1994 and 1995 and the
related consolidated statements of income, changes in stockholders'
equity and cash flows for the fiscal years ended December 31, 1993,
1994 and 1995, inclusive, as reported in ANTEC's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (the "ANTEC Form
10-K") filed with the SEC under the Exchange Act, in each case
accompanied by the audit report of Ernst & Young LLP, independent
public accountants with respect to ANTEC, and (b) the unaudited
consolidated balance sheet of ANTEC and its Subsidiaries as of June
30, 1996 and June 30, 1995 and the related unaudited consolidated
statements of income, cash flows and changes in stockholders' equity
for the three- and six-month periods then ended as reported in ANTEC's
Quarterly Report on Form 10-Q for the period ended June 30, 1996 filed
with the SEC under the Exchange Act (the "ANTEC Second Quarter 10-Q").
The December 31, 1995 and June 30, 1996 consolidated balance sheets of
ANTEC (including the related notes, where applicable) fairly present
the consolidated financial position of ANTEC and the ANTEC
Subsidiaries as of the dates thereof, and the other financial
statements referred to in this Section 4.5 (including the related
notes, where applicable) fairly present the results of the
consolidated operations and changes in stockholders' equity and
consolidated financial position of ANTEC and the ANTEC Subsidiaries
for the respective fiscal periods or as of the respective dates
therein set forth, subject, in the case of the unaudited statements,
<PAGE> 110
to recurring audit adjustments normal in nature and amount; each of
such statements (including the related notes, where applicable) comply
in all material respects with applicable accounting requirements and
with the published rules, regulations and interpretations of the SEC
with respect thereto; and each of such statements (including the
related notes, where applicable) has been prepared in all material
respects in accordance with GAAP consistently applied during the
periods involved, except, in each case, as indicated in such
statements or in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q. The books and records of ANTEC
and the ANTEC Subsidiaries have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable
legal and accounting requirements and reflect only actual
transactions.
4.6 Broker's Fees. Other than ANTEC's agreement with an
investment bank satisfactory to ANTEC to serve as a financial advisor
to ANTEC and provide a fairness opinion in connection with the Merger
and related transactions contemplated by this Agreement, a copy of
which agreement has been provided to TSX, neither ANTEC nor any ANTEC
Subsidiary nor any of their respective officers or directors has
employed any financial advisor, broker or finder or incurred any
liability for any financial advising, broker's fees, commissions or
finder's fees in connection with the Merger or related transactions
contemplated by this Agreement.
4.7 Absence of Certain Changes or Events.
(a) Except as publicly disclosed in ANTEC Reports (as
defined in Section 4.10) filed prior to the date hereof or as
disclosed on Schedules 4.1 or 4.7 to the ANTEC Disclosure
Schedules, since June 30, 1996, (i) ANTEC and the ANTEC
Subsidiaries taken as a whole have not incurred any material
liability, except in the ordinary course of their business, and
(ii) no event has occurred which has had, or is reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on ANTEC.
(b) Except as publicly disclosed in the ANTEC Reports
filed prior to the date hereof or as disclosed in Schedules 4.1
or 4.7 to the ANTEC Disclosure Schedules or as contemplated by
this Agreement, since June 30, 1996, ANTEC and the ANTEC
Subsidiaries have carried on their respective businesses in all
material respects in the ordinary and usual course.
4.8 Legal Proceedings.
(a) Except as set forth in Schedule 4.8 to the ANTEC
Disclosure Schedules or as would not have a Material Adverse
Effect on ANTEC, there are no pending or, to the best of ANTEC's
knowledge, threatened, legal, administrative, arbitration or
other proceedings, claims, actions or governmental or regulatory
investigations of any nature against ANTEC or any of the ANTEC
<PAGE> 111
Subsidiaries or their respective properties, assets, operations
or business, or challenging the validity or propriety of the
transactions contemplated by this Agreement.
(b) Except as would not have a Material Adverse Effect
on ANTEC, there is no injunction, order, judgment, decree, or
regulatory restriction imposed upon ANTEC, any of the ANTEC
Subsidiaries or the assets of ANTEC or any of the ANTEC
Subsidiaries.
4.9 Taxes and Tax Returns. Each of ANTEC and the ANTEC
Subsidiaries has duly filed all federal, state, county, foreign and,
to the best of ANTEC's knowledge, local information returns and tax
returns required to be filed by it on or prior to the date hereof (all
such returns being accurate and complete in all material respects) and
has duly paid or made provisions for the payment of all Taxes and
other governmental charges which have been incurred or are due or
claimed to be due from it by federal, state, county, foreign or local
taxing authorities on or prior to the date of this Agreement
(including, without limitation, if and to the extent applicable, those
due in respect of its properties, income, business, capital stock,
deposits, franchises, licenses, sales and payrolls) other than Taxes
or other charges which are not yet delinquent or are being contested
in good faith and have not been finally determined. As of the date
hereof, the income tax returns of ANTEC and the ANTEC Subsidiaries
have never been examined by the IRS. There are no material disputes
pending, or claims asserted for, Taxes or assessments upon ANTEC or
any of the ANTEC Subsidiaries for which ANTEC does not have adequate
reserves, nor has ANTEC or any of the ANTEC Subsidiaries given any
currently effective waivers extending the statutory period of
limitation applicable to any federal, state, county, foreign or local
income tax return for any period, except as described in Schedule 4.9
to the ANTEC Disclosure Schedules. In addition, (i) proper and
accurate amounts have been withheld by ANTEC and the ANTEC
Subsidiaries from their employees for all prior periods in compliance
in all material respects with the tax withholding provisions of
applicable federal, state, foreign and local laws, except where
failure to do so would not have a Material Adverse Effect on ANTEC,
(ii) federal, state, foreign, county and local returns which are
accurate and complete in all material respects have been filed by
ANTEC and each of the ANTEC Subsidiaries for all periods for which
returns were due with respect to income tax withholding, Social
Security and unemployment taxes, (iii) for purposes of ANTEC's books
and records and financial statements, taxes have been computed in
accordance with all applicable laws, (iv) the amounts shown on such
federal, state, foreign, local or county returns to be due and payable
have been paid in full or adequate provision therefor has been
included by ANTEC in its consolidated financial statements as of
December 31, 1995, and (v) there are no Tax liens upon any property or
assets of ANTEC or any of the ANTEC Subsidiaries except liens for
current taxes not yet due or that, individually or in the aggregate,
would not have a Material Adverse Effect on ANTEC. Except as
described on Schedule 4.9 to the ANTEC Disclosure Schedules, neither
<PAGE> 112
ANTEC nor any of the ANTEC Subsidiaries has been required to include
in income any adjustment pursuant to Section 481 of the Code by reason
of a voluntary change in accounting method initiated by ANTEC or any
of the ANTEC Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method. Except as set
forth in the financial statements described in Section 4.5 or as
disclosed in Schedule 4.9 to the ANTEC Disclosure Schedules, neither
ANTEC nor any of the ANTEC Subsidiaries has entered into a transaction
which is being accounted for as an installment obligation under
Section 453 of the Code.
4.10 SEC Reports. ANTEC has previously made available to
TSX an accurate and complete copy of each (a) final registration
statement, prospectus, report, schedule and definitive proxy statement
filed since October 1, 1993 by ANTEC with the SEC pursuant to the
Securities Act or the Exchange Act (the "ANTEC Reports") and prior to
the date hereof and (b) communication mailed by ANTEC to its
stockholders since October 1, 1993 and prior to the date hereof. None
of the ANTEC Reports or such communications to stockholders contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which
they were made, not misleading, except that information as of a later
date shall be deemed to modify information as of an earlier date.
Since October 1, 1993, ANTEC has timely filed all ANTEC Reports and
other documents required to be filed by it under the Securities Act
and the Exchange Act, and, as of their respective dates, all ANTEC
Reports complied in all material respects with the published rules and
regulations of the SEC with respect thereto.
4.11 Compliance with Applicable Law. ANTEC and each of the
ANTEC Subsidiaries hold all licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are
not in default under any, applicable laws, statutes, orders, rules,
regulations, policies and/or guidelines of any Governmental Entity
relating to ANTEC or any of the ANTEC Subsidiaries, except where the
failure to hold such license, franchise, permit or authorization or
such noncompliance or default would not, individually or in the
aggregate, have a Material Adverse Effect on ANTEC.
4.12 Certain Contracts.
(a) Except as set forth in Schedule 4.12 to the ANTEC
Disclosure Schedules or as contained as an exhibit to the ANTEC
Form 10-K, neither ANTEC nor any of the ANTEC Subsidiaries is a
party to or bound by:
(i) any contract, arrangement, commitment or
understanding (whether written or oral) which, upon the
consummation of the transactions contemplated by this
Agreement will (either alone or upon the occurrence of any
additional acts or events) result in any payment (including,
<PAGE> 113
without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due from ANTEC, TSX,
Merger Sub, or any of their respective Subsidiaries to any
officer, director or employee thereof;
(ii) any contract, arrangement, commitment or
understanding (whether written or oral) which would
materially restrict the conduct of any line of business
currently being conducted by TSX;
(iii) any contract, arrangement, commitment or
understanding (whether written or oral), including any stock
option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement, or the value of
any of the benefits of which will be calculated on the basis
of any of the transactions contemplated by this Agreement.
Each contract, arrangement, commitment or understanding of the
type described in this Section 4.12(a), whether or not set forth
in the ANTEC Disclosure Schedules, is referred to herein as a
"ANTEC Contract," and neither ANTEC nor any of the ANTEC
Subsidiaries knows of, or has received notice of, any violation
of the above by any of the other parties thereto which,
individually or in the aggregate, would have a Material Adverse
Effect on ANTEC.
(b) Except as would not, individually or in the
aggregate, have a Material Adverse Effect on ANTEC, or as is
disclosed on Schedule 4.4 to the ANTEC Disclosure Schedules (i)
each ANTEC Contract is valid and binding on ANTEC or any of the
ANTEC Subsidiaries, as applicable, and is in full force and
effect, (ii) ANTEC and each of the ANTEC Subsidiaries has
performed all obligations required to be performed by it to date
under each ANTEC Contract and (iii) no event or condition exists
which constitutes or, after notice or lapse of time or both,
would constitute, a default on the part of ANTEC or any of the
ANTEC Subsidiaries under any such ANTEC Contract.
4.13 Undisclosed Liabilities. Except as described in
Schedule 4.1 or 4.7 to the ANTEC Disclosure Schedules and for those
liabilities that are fully reflected or reserved against on the
consolidated balance sheet of ANTEC included in the ANTEC Second-
Quarter 10-Q or the ANTEC Form 10-K and for liabilities incurred in
the ordinary course of business consistent with past practice since
June 30, 1996, neither ANTEC nor any of the ANTEC Subsidiaries has
incurred any liability of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether due or to become due)
that, either alone or when combined with all similar liabilities, has
had, or could reasonably be expected to have, a Material Adverse
Effect on ANTEC.
<PAGE> 114
4.14 Patents, Trademarks, etc. ANTEC and each of the ANTEC
Subsidiaries have all patents, trademarks, trade names, service marks,
trade secrets, copyrights and licenses and other proprietary
intellectual property rights and licenses as are necessary in
connection with the businesses of ANTEC and each of the ANTEC
Subsidiaries, the lack of which would have a Material Adverse Effect
on ANTEC, and except as disclosed in Schedule 4.8 to the ANTEC
Disclosure Schedules, ANTEC does not have any knowledge of any
conflict with the rights of ANTEC and each of the ANTEC Subsidiaries
therein or any knowledge of any conflict by them with the rights of
others therein which, insofar as reasonably can be foreseen, could
have a Material Adverse Effect on ANTEC.
4.15 Environmental Liability. There are no legal,
administrative, arbitration or other proceedings, claims, actions,
causes of action, private environmental investigations or remediation
activities or governmental investigations of any nature pending or, to
the best of ANTEC's knowledge, threatened against ANTEC seeking to
impose, or that could reasonably result in the imposition, on ANTEC of
any liability or obligation arising under common law or under any
local, state, federal or foreign environmental statute, regulation or
ordinance including, without limitation, CERCLA which, insofar as
reasonably can be foreseen, could have a Material Adverse Effect on
ANTEC. To the best of ANTEC's knowledge, there is no reasonable basis
for any such proceeding, claim, action or governmental investigation
that would impose any such liability or obligation which, insofar as
reasonably can be foreseen, could have a Material Adverse Effect on
ANTEC. ANTEC is not subject to any agreement, order, judgment,
decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any such
liability or obligation which, insofar as reasonably can be foreseen,
could have a Material Adverse Effect on ANTEC.
4.16 Pooling of Interests. As of the date of this
Agreement, after discussions with Ernst & Young LLP, ANTEC has no
reason to believe that the Merger will not qualify as a "pooling of
interests" for accounting purposes.
4.17 Officers and Other Affiliates. At or prior to the date
of this Agreement the contracts and other arrangements with the
officers and other affiliates of ANTEC have been implemented or
modified as described in Schedule 4.17 to the ANTEC Disclosure
Schedules.
4.18 Ownership of TSX Stock. Neither ANTEC nor any of the
ANTEC Subsidiaries is an "Interested Stockholder" of TSX as defined in
Article Ninth of the Articles of Incorporation of TSX, except insofar
as they could be considered an "Interested Stockholder" as a result of
entering into the Voting Agreement dated as of October 28, 1996,
between ANTEC and Tele-Communications, Inc. or one of its affiliates.
As of the date of this Agreement, neither ANTEC nor the ANTEC
Subsidiaries nor any of their respective affiliates own (directly or
indirectly, beneficially or of record) any shares of TSX Common Stock
<PAGE> 115
and neither ANTEC nor any of the ANTEC Subsidiaries own any rights to
acquire any shares of TSX Stock, except pursuant to this Agreement and
insofar as they could be considered an "Interested Stockholder" as a
result of entering into the Voting Agreement dated as of October 28,
1996, between ANTEC and Tele-Communications, Inc. or one of its
affiliates. The above representations have been included in this
Agreement in order to fully inform TSX of ANTEC's arrangement with
Tele-Communications, Inc. and no implication shall be drawn from the
foregoing as to whether ANTEC is an "Interested Stockholder."
4.19 Representations and Warranties. Other than the
representations and warranties contained in this Article IV, ANTEC
makes no representations and warranties in connection with this
Agreement.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Businesses Prior to the Effective Time.
During the period from the date of this Agreement to the Effective
Time, except as expressly contemplated or permitted by this Agreement
(including the ANTEC Disclosure Schedules and the TSX Disclosure
Schedules), each of ANTEC and TSX shall, and shall cause each of their
respective Subsidiaries to, (a) conduct its business in good faith in
the usual, regular and ordinary course consistent with past practice,
(b) use reasonable efforts to maintain and preserve intact its
business organization, employees and advantageous business
relationships and, except as otherwise contemplated by the agreements
listed on Schedule 3.18 to the TSX Disclosure Schedules, retain the
services of its key officers and key employees, it being understood
that so long as TSX uses such reasonable efforts the failure of any
officer or employee of TSX to remain an officer or employee of TSX or
any TSX Subsidiary shall not constitute a breach of this covenant, and
(c) take no action which would adversely affect or delay the ability
of either ANTEC or TSX to obtain any necessary approvals of any
Regulatory Agency or other governmental authority required for the
transactions contemplated hereby or to perform its covenants and
agreements under this Agreement.
5.2 Forbearances. During the period from the date of this
Agreement to the Effective Time, except as set forth in the ANTEC
Disclosure Schedules or the TSX Disclosure Schedules, as the case may
be, or, except as expressly contemplated or permitted by this
Agreement, neither ANTEC nor TSX shall, or shall permit any of their
respective Subsidiaries to, without the prior written consent of the
other:
(a) other than in the ordinary course of business
consistent with past practice, (i) incur any indebtedness for
borrowed money (other than pursuant to existing lines of credit
or short-term indebtedness incurred in the ordinary course of
business consistent with past practice, indebtedness of ANTEC to
<PAGE> 116
any of the ANTEC Subsidiaries or of any of the ANTEC Subsidiaries
to ANTEC, or indebtedness of TSX to any of the TSX Subsidiaries
or of any of the TSX Subsidiaries to TSX, as the case may be)
(ii) assume, guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other individual,
corporation or other entity, or (iii) make any loan or advance;
(b) (i) adjust, split, combine or reclassify any
capital stock, (ii) make, declare or pay any dividend or make any
other distribution on, or directly or indirectly redeem, purchase
or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for
any shares of its capital stock, (iii) grant any stock
appreciation rights or grant any individual, corporation or other
entity any right to acquire any shares of its capital stock, or
(iv) issue any additional shares of capital stock except pursuant
to the exercise of stock options or warrants outstanding as of
the date hereof, including the 117,656 stock options reflected in
Schedule 3.2 to the TSX Disclosure Schedules, except that (y) in
January 1997, consistent with its prior practices, ANTEC may
grant stock options, SAR or other benefits to employees of ANTEC
pursuant to any ANTEC employee stock option or other benefit
plan, and (z) provided that Tele-Communications, Inc. waives its
preemptive rights with respect thereto in the event the Merger is
consummated, from time to time TSX may in the ordinary course of
business grant each supervisory (or more senior) employee hired
subsequently to the date hereof, under its Long-Term Incentive
Compensation Program, stock options to purchase up to 5,000
shares of TSX Common Stock, but not in excess of 40,000 in the
aggregate.
(c) sell, transfer, mortgage, encumber or otherwise
dispose of any of its properties or assets to any individual,
corporation or other entity other than a Subsidiary, or cancel,
release or assign any indebtedness to any such person or any
claims held by any such person, except in the ordinary course of
business consistent with past practice or pursuant to contracts
or agreements in force at the date of this Agreement;
(d) except for transactions in the ordinary course of
business consistent with past practice or pursuant to contracts
or agreements in force at the date of this Agreement, make any
material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other
entity other than a Subsidiary thereof or any existing joint
venture;
(e) except for transactions in the ordinary course of
business consistent with past practice, enter into or terminate
any material contract or agreement, or make any change in any of
its material leases or contracts, other than renewals of
contracts and leases without material adverse changes of terms;
<PAGE> 117
(f) other than in the ordinary course of business
consistent with past practice, increase in any manner the
compensation or fringe benefits of any of its employees or pay
any pension or retirement allowance not required by any existing
plan or agreement to any such employees or become a party to,
amend or commit itself to any pension, retirement, profit-sharing
or welfare benefit plan or agreement or employment agreement with
or for the benefit of any employee, except that ANTEC may adopt
and, if it deems appropriate, submit for stockholder approval a
new stock option or other stock based incentive plan or may
increase the number of shares or interests issuable under
existing plans. Without by implication limiting the foregoing,
no payments other than as set forth in Schedule 3.18 of the TSX
Disclosure Schedules shall be made with respect to officers of
TSX;
(g) accelerate the vesting of any stock options or
other stock-based compensation or any other compensation related
benefits;
(h) settle any claim, action or proceeding involving
money damages, except in the ordinary course of business
consistent with past practice;
(i) take any action that would prevent or impede the
Merger from qualifying (i) for "pooling of interests" accounting
treatment or (ii) as a reorganization within the meaning of
Section 368 of the Code;
(j) amend its certificate of incorporation or articles
of incorporation, as the case may be, or its bylaws, except that
ANTEC may increase its number of authorized shares of ANTEC
Common Stock;
(k) take any action that is intended or may reasonably
be expected to result in any of its representations and
warranties set forth in this Agreement being or becoming untrue
in any material respect at any time prior to the Effective Time,
or in any of the conditions to the Merger set forth in Article
VII not being satisfied or in a violation of any provision of
this Agreement, except, in every case, as may be required by
applicable law; or
(l) agree to, or make any commitment to, take any of
the actions prohibited by this Section 5.2.
<PAGE> 118
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Regulatory Matters; Cooperation with Respect to Filing.
(a) (i) ANTEC and TSX shall promptly prepare and file
with the SEC the Joint Proxy Statement, (ii) ANTEC shall promptly
prepare and file with the SEC the S-4, in which the Joint Proxy
Statement will be included as a prospectus, and (iii) ANTEC and
TSX shall promptly prepare and file pre-merger notification forms
with the Federal Trade Commission and the U.S. Department of
Justice under the HSR Act. Each of ANTEC and TSX shall use all
reasonable efforts to have the S-4 declared effective under the
Securities Act as promptly as practicable after such filing and
to mail or deliver the Joint Proxy Statement to their respective
stockholders. ANTEC and TSX shall also use all reasonable
efforts to obtain all necessary state securities law or "Blue
Sky" permits and approvals required to carry out the transactions
contemplated by this Agreement, and TSX shall furnish all
information concerning TSX and the holders of the TSX Common
Stock, as may be reasonably requested in connection with any such
action. In the event that the fairness opinion of Allen &
Company Incorporated received by TSX's Board of Directors is
subsequently withdrawn, the S-4 shall be amended to disclose such
withdrawal.
(b) The parties hereto shall cooperate with each other
and shall each use reasonable efforts to promptly prepare and
file all necessary documentation, to effect all applications,
notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations
of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions
contemplated by this Agreement (including, without limitation,
the Merger), and to comply with the terms and conditions of all
such permits, consents, approvals and authorizations of all such
Governmental Entities. ANTEC and TSX shall have the right to
review in advance, and, to the extent practicable, each will
consult the other on, in each case subject to applicable laws
relating to the exchange of information, all the information
relating to ANTEC or TSX, as the case may be, and any of their
respective Subsidiaries, which appears in any filing made with,
or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions
contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will
consult with each other with respect to the obtaining of all
permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement, and
each party will keep the other apprised of the status of matters
relating to completion of the transactions contemplated herein.
<PAGE> 119
(c) ANTEC and TSX shall, upon request, furnish each
other with all information concerning themselves, their
Subsidiaries, directors, officers and stockholders and such other
matters as may be reasonably necessary or advisable in connection
with the Joint Proxy Statement, the S-4 or any other statement,
filing, notice or application made by or on behalf of ANTEC or
TSX or any of their respective Subsidiaries to any Governmental
Entity in connection with the Merger and the other transactions
contemplated by this Agreement. Each of ANTEC and TSX covenants
and agrees that none of the information which is furnished by
ANTEC for inclusion, or which is included, in the S-4, the Joint
Proxy Statement or any other statement, filing, notice or
application made by or on behalf of ANTEC or TSX or any of their
respective Subsidiaries to any Governmental Entity in connection
with the Merger and the other transactions contemplated by this
Agreement will, at the respective times such documents are filed
and, in the case of the S-4, when it becomes effective and, with
respect to the Joint Proxy Statement, when mailed or at the time
of the meetings of the stockholders of ANTEC and TSX, be false or
misleading with respect to any material fact or shall omit to
state any material fact necessary in order to make the statements
therein, in light of the circumstances in which they were made,
not misleading. Notwithstanding the foregoing, ANTEC shall have
no responsibility for the truth or accuracy of any information
with respect to TSX or the TSX Subsidiaries included in the S-4,
the Joint Proxy Statement, or any other statement, filing, notice
or application filed with any Governmental Entity in connection
with the Merger and the other transactions contemplated by this
Agreement, and TSX shall have no responsibility for the truth or
accuracy of any information with respect to ANTEC or the ANTEC
Subsidiaries included in the S-4, the Joint Proxy Statement, or
any other statement, filing, notice or application filed with any
Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement.
(d) ANTEC and TSX shall promptly advise one another
upon receiving any communication from any Governmental Entity
whose consent or approval is required for consummation of the
transactions contemplated by this Agreement which causes such
party to believe that there is a reasonable likelihood that any
Requisite Regulatory Approval will not be obtained or that the
receipt of any such approval will be materially delayed.
6.2 Access to Information.
(a) Upon reasonable notice, each of ANTEC and TSX
shall, and shall cause each of their respective Subsidiaries to,
afford to the officers, employees, accountants, counsel and other
representatives of the other party, access, during normal
business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records
and, during such period, each of ANTEC and TSX shall, and shall
cause their respective Subsidiaries to, make available to the
<PAGE> 120
other party (i) a copy of each report, schedule, registration
statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws or
federal or state banking laws and (ii) all other information
concerning its business, properties and personnel as such party
may reasonably request, including, without limitation, minute
books. Neither ANTEC nor TSX nor any of their respective
Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would (i)
violate or prejudice the rights of ANTEC's or TSX's, as the case
may be, customers or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered
into prior to the date of this Agreement, or (ii) impair any
attorney client privilege of the disclosing party. The parties
hereto will make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding
sentence apply.
(b) Each of ANTEC and TSX shall hold all information
furnished by or on behalf of the other party or any of such
party's Subsidiaries or representatives pursuant to Section
6.2(a) in confidence and shall return all documents containing
any information concerning the properties, business and assets of
each other party that may have been obtained in the course of
negotiations or examination of the affairs of each other party
either prior or subsequent to the execution of this Agreement
(other than such information as shall be in the public domain or
otherwise ascertainable from public or outside sources). Each of
ANTEC and TSX shall use such information solely for the purpose
of conducting business, legal and financial reviews of the other
party and for such other purposes as may be related to this
Agreement. Nothing in this Agreement supersedes or otherwise
affects the Confidentiality Agreement, dated as of August 16,
1996, between ANTEC and TSX, which shall remain in full force and
effect in accordance with its terms. Notwithstanding the
foregoing, restrictions contained in Section 2.7 of such
Confidentiality Agreement shall not apply to ANTEC or TSX, as the
case may be, after (a) the commencement by a third party, who is
not an affiliate of ANTEC or TSX, as the case may be, or
announcement by such third party of an intent to commence, a
tender offer or exchange offer for 10% or more of the outstanding
voting securities of the other party; (b) the acquisition by any
person or group other than ANTEC or TSX, as the case may be, or
any affiliate thereof, of beneficial ownership of more than 10%
of the outstanding voting securities of the other party, other
than institutional investors who are eligible to file a Schedule
13G with respect to its holdings; or (c) the entry of the other
party into any agreement or letter of intent providing for a sale
of all or substantially all of its assets or a merger or other
business combination, as a result of which the holders of its
outstanding voting securities immediately prior thereto would
hold less than 60% of the outstanding voting securities of the
surviving corporation.
<PAGE> 121
(c) No investigation by either of the parties or their
respective representatives shall affect the representations and
warranties of the other set forth herein. Without limitation of
the foregoing, each party shall promptly notify the other party
of any information obtained by such party during the course of
any due diligence conducted by such party or its representatives
in accordance with Section 6.2(a) which is materially
inconsistent with any representation or warranty made by the
other party under this Agreement; provided, however, that either
party's failure to provide such notice to the other party shall
not, in turn, be deemed to constitute a material breach of such
party's obligations under this Agreement.
6.3 Stockholders' Approvals. Each of ANTEC and TSX shall
call a meeting of its stockholders to be held as soon as reasonably
practicable for the purpose of voting upon this Agreement, and,
subject to the terms and conditions of this Agreement, each of ANTEC
and TSX shall use reasonable efforts to cause such meetings to occur
on the same date and each shall use all reasonable efforts to obtain
stockholders approval of this Agreement and the Merger. ANTEC shall
cause Merger Sub to approve the Merger and all related transactions.
6.4 Legal Conditions to Merger. Each of ANTEC and TSX
shall, and shall cause its Subsidiaries to, use reasonable efforts (a)
to take, or cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements which may be
imposed on such party or its Subsidiaries with respect to the Merger
and, subject to the conditions set forth in Article VII hereof, to
consummate the transactions contemplated by this Agreement and (b) to
obtain (and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party which is required to be
obtained by ANTEC or TSX or any of their respective Subsidiaries in
connection with the Merger and the other transactions contemplated by
this Agreement.
6.5 Affiliates; Publication of Combined Financial Results.
(a) To the extent not delivered prior to the date
hereof, each of ANTEC and TSX shall use reasonable efforts to
cause each director, executive officer and other person who is an
"affiliate" (for purposes of Rule 145 under the Securities Act,
for purposes of the tax treatment of the Merger, and for purposes
of qualifying the Merger for "pooling of interests" accounting
treatment) of such party to deliver to the other party hereto,
not later than 30 days after the date of this Agreement, a
written agreement, in the form of Exhibit C, providing, among
other things, that such person will not sell, pledge, transfer or
otherwise dispose of (i) any shares of ANTEC Common Stock or TSX
Common Stock held by such "affiliate," except to the extent and
under the conditions permitted therein, during the period
commencing 30 days prior to the Merger and ending at the time of
the publication of financial results covering at least 30 days of
<PAGE> 122
combined operations of ANTEC and TSX, and (ii) any shares of
ANTEC Common Stock to be received by such "affiliate" in the
Merger, except in compliance with the applicable provisions of
the Securities Act and the rules and regulations thereunder.
(b) ANTEC shall use reasonable efforts to publish as
promptly as reasonably practicable but in no event later than 90
days after the end of the first month after the Effective Time in
which there are at least 30 days of post-Merger combined
operations (which month may be the month in which the Effective
Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC
Accounting Series Release No. 135.
6.6 Listing of ANTEC Common Stock. ANTEC shall file an
application with The Nasdaq Stock Market for approval to list the
shares of ANTEC Common Stock on The Nasdaq Stock Market's National
Market, subject to official notice of issuance, and ANTEC shall use
all reasonable efforts to have such application approved prior to the
Effective Time.
6.7 Indemnification; Directors' and Officers' Insurance.
(a) For a period of six years after the Effective
Time, or, if shorter, for so long as TSX is a Nevada corporation,
ANTEC shall not cause or permit any amendment, repeal or other
modification of the provisions of
(i) Article TENTH of the articles of
incorporation of the Resulting Corporation, as set forth in
Exhibit A attached hereto, or
(ii) Article VI of the By-laws of the Resulting
Corporation, as set forth in Exhibit B attached hereto,
in either case in any manner that would materially adversely
affect the rights thereunder of individuals who at any time prior
to the Effective Time were directors, officers, employees or
agents of TSX or any of its subsidiaries or affiliates or who are
otherwise entitled to indemnification pursuant to such provisions
in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is
required by the NRS or applicable federal law, and then only to
the extent of such applicable requirements of the NRS or federal
law. To the extent TSX is unable for any reason (including but
not limited to its failure to remain a Nevada corporation) to
fulfill its obligations under the provisions of the articles of
incorporation set forth in Exhibit A or the by-law provisions set
forth in Exhibit B, ANTEC agrees to pay, perform and discharge
all such obligations.
<PAGE> 123
(b) (i) Prior to the Effective Time, to the extent any
Claim (as defined below) arises out of the approval by the Board
of Directors of TSX of this Agreement and the transactions
contemplated hereby and this Agreement is not terminated by ANTEC
pursuant to Section 8.1(b)(ii) based upon a material breach in
the representations, warranties or covenants of TSX or the
failure of TSX to comply with its obligations under this
Agreement, ANTEC shall, and otherwise TSX shall, and (ii) from
and after the Effective Time ANTEC and TSX jointly and severally
shall indemnify, defend and hold harmless each person who is now,
has been at any time prior to the date of this Agreement or
becomes prior to Effective Time a director, officer, employee or
agent of TSX or any of its subsidiaries, or is or was serving at
the request of TSX as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise (collectively, the "Indemnified Parties") against all
losses, claims, damages, liabilities, expenses (including but not
limited to reasonable attorneys fees), judgments, fines and
amounts that are paid in settlement of, with the approval of the
indemnifying party (which approval shall not unreasonably be
delayed or withheld), or otherwise in connection with any claim,
action, suit, proceeding or investigation (a "Claim"), based in
whole or in part on the fact that such Person is or was a
director, officer, employee or agent of TSX or any of its
subsidiaries or is or was serving at the request of TSX as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise and arising
out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions
contemplated by this Agreement), whether or not such Claim was
asserted prior to, at or after the Effective Time, in each case
to the fullest extent permitted under the NRS (and shall pay
expenses in advance of the final disposition of any such Claim to
each Indemnified Party to the fullest extent permitted under the
NRS, upon receipt from the Indemnified Party to whom expenses are
advanced of an undertaking to repay such advances if it is
ultimately determined by a court of competent jurisdiction that
he is not entitled to be indemnified under the NRS).
(c) Without limiting the generality of the foregoing,
in the event any Claim is brought against any Indemnified Party
(whether arising before or after the Effective Time):
(i) the Indemnified Party may retain counsel
satisfactory to him with the consent of TSX and ANTEC, which
consent of TSX and ANTEC with respect to such counsel
retained by the Indemnified Party may not be unreasonably
withheld or delayed. The Indemnified Parties as a group may
retain only one law firm to represent them with respect to
each such Claim unless there is, under applicable standards
of professional conduct, a conflict on any significant issue
between the positions of any two or more Indemnified
Parties;
<PAGE> 124
(ii) TSX (or, after the Effective Time, ANTEC)
shall pay all reasonable fees and expenses of such counsel
for the Indemnified Party promptly as statements therefor
are received;
(iii) TSX (or, after the Effective Time, ANTEC)
will use all reasonable efforts to assist in the vigorous
defense of any such matter, provided that none of TSX or
ANTEC shall be liable for any settlement of any Claim
effected without its written consent, which consent,
however, shall not be unreasonably withheld or delayed; and
(iv) Any determination to be made as to whether
any Indemnified Party has met any standard of conduct
imposed by law or the articles of incorporation or By-laws
of the Resulting Corporation shall be made by legal counsel
reasonably acceptable to such Indemnified Party and to ANTEC
retained at the expense of ANTEC and the Indemnified Party
based upon such legal counsel's assessment of the relative
merits of the positions of the Indemnified Party and ANTEC.
Notwithstanding the foregoing, ANTEC shall have the
right to assume the defense of any Claim and upon such
assumption ANTEC shall not be liable to any Indemnified Party for
any legal expenses of other counsel or any other expenses
subsequently incurred by any Indemnified Party in connection with
the defense thereof, except that if ANTEC subsequently abandons
such defense or counsel for the Indemnified Parties reasonably
advises the Indemnified Parties that there is, under applicable
standards of professional conduct, a conflict on any significant
issue of interest between ANTEC and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to
them after consultation with ANTEC, and ANTEC shall pay the
reasonable fees and expenses of such counsel for the Indemnified
Parties.
Any Indemnified Party wishing to claim indemnification
under this Section 6.7, upon learning of any such Claim, shall
notify TSX (but any failure so to notify shall not relieve TSX,
ANTEC or the Resulting Corporation from any liability which it
may have under this Section 6.7, except to the extent such
failure prejudices such party), and shall deliver to TSX, ANTEC
an undertaking to repay such advances if it is ultimately
determined by a court of competent jurisdiction that he is not
entitled to be indemnified under the NRS.
(d) On or prior to the Closing Date, TSX shall obtain
an extension of or "tail" to its existing Directors' and
Officers' Liability Insurance Policy for a period of five years
from and after the Effective Time for a single premium not
exceeding $548,000 (the "D&O Policy").
<PAGE> 125
(e) ANTEC and the Indemnified party shall cooperate in
the defense and settlement of any Claim made against them based
upon or arising out of any actual or alleged wrongful act (as
such term may be defined in the applicable D&O Policy) occurring
at or prior to the Effective Time. ANTEC and TSX shall provide
any reasonable assistance or information that may be required by
an Indemnified Party in connection with any such Claim. Neither
ANTEC, TSX nor any of their respective representatives shall
cause any action or inaction that could reasonably be expected to
jeopardize or otherwise impair the rights or ability of the
Indemnified Parties to recover loss amounts due under the D&O
Policy.
(f) In the event ANTEC or any of its successors or
assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person,
then and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of
ANTEC assume the obligations set forth in this Section 6.7.
(g) The provisions of this Section 6.7 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs, legal representatives and
successors.
6.8 Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement or to vest ANTEC with full title to
all properties, assets, rights, approvals, immunities and franchises
of any of the parties to the Merger, the proper officers and directors
of each party to this Agreement and their respective Subsidiaries
shall take all such necessary action as may be reasonably requested
by, and at the sole expense of, ANTEC.
6.9 Advice of Changes. Between the date hereof and the
Effective Time, ANTEC and TSX shall promptly provide notice to the
other party of any change or event having a Material Adverse Effect on
it or which it believes would or would be reasonably likely to cause
or constitute a material breach of any of its representations,
warranties or covenants contained herein or which would cause any of
its representations or warranties contained in this Agreement to be
untrue or inaccurate, or any of its covenants, conditions or
agreements contained in this Agreement not to be complied with or
satisfied. The delivery of any notice pursuant to this Section 6.9
shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
6.10 Performance of Contracts. If not performed by TSX prior
to the Effective Time, following the Effective Time ANTEC shall
perform and comply with the contracts or other arrangements with the
<PAGE> 126
officers and other affiliates of TSX as described in Schedule 3.18 to
the TSX Disclosure Schedules.
6.11 No Conduct Inconsistent with this Agreement.
(a) Each of ANTEC and TSX and their respective
Subsidiaries shall, and ANTEC and TSX shall cause their respective
officers and directors to, and each of ANTEC and TSX shall use all
reasonable efforts to cause its employees, affiliates,
representatives, agents and advisors to, immediately cease any
existing discussions or negotiations with respect to any of the
following involving ANTEC or TSX, as the case may be, or any of their
respective subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transaction in which
holders of ANTEC or TSX, as the case may be, would hold less than a
majority of the voting interests in the surviving entity, (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition
of 10% or more of the assets of the company and its subsidiaries taken
as a whole, in a single transaction or series of transactions, (iii)
any tender offer or exchange offer for 10% or more of the outstanding
shares of Common Stock or the filing of a registration statement under
the Securities Act in connection therewith, (iv) the issuance, sale or
other disposal (including by way of merger, consolidation, share
exchange or any similar transaction) of securities representing, or
convertible into or exercisable for the acquisition of, 10% or more of
the voting power of ANTEC or TSX or any of their respective
Subsidiaries or (v) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any
of the foregoing (collectively, an "Alternate Transaction"), other
than with each other.
(b) Neither ANTEC nor TSX nor any of their respective
Subsidiaries shall, and ANTEC and TSX shall cause their respective
officers and directors not to, and each of ANTEC and TSX shall use all
reasonable efforts to cause its employees, affiliates,
representatives, agents and advisors not to, directly or indirectly,
encourage, solicit, initiate, engage or participate in any discussions
or negotiations with, or provide any information or access to
information to, any corporation, partnership, person or other entity
or group, other than the other party to this Agreement, concerning any
Alternate Transaction.
(c) Each of ANTEC and TSX shall promptly inform the
other of any inquiry, offer or proposal (including the terms thereof
and the identity of the party making such inquiry, offer or proposal)
that it receives in respect of any Alternate Transaction, other than
from each other, and shall furnish to the other a copy of any such
inquiry, offer or proposal that is in writing.
(d) Nothing contained herein shall prohibit either
ANTEC or TSX or their respective Boards of Directors from taking and
disclosing to their stockholders a position with respect to a tender
offer by a third party pursuant to Rules 14d-9 and 14e-2(a)
<PAGE> 127
promulgated under the Exchange Act, or from making such disclosure to
their respective stockholders which, in the judgment of their Boards
of Directors with the advice of counsel, may be required under
applicable law.
6.12 Registration of ANTEC Common Stock. ANTEC will file
with the SEC a registration statement on Form S-8 covering (or amend a
currently effective S-8 so that it covers) the issuance by ANTEC of
ANTEC Common Stock upon the exercise of options held by TSX's
directors and employees that prior to the Effective Time were
exercisable to purchase TSX Common Stock and will use all reasonable
efforts to have such S-8 (or amendment) declared effective by the SEC
prior to the Effective Time.
6.13 Amendment to Registration Rights Agreement. Upon the
execution of this Agreement, ANTEC will deliver to Tele-
Communications, Inc. an executed copy of a Registration Rights
Agreement substantially in the form attached hereto as Exhibit D.
6.14 Accounting Treatment. The parties agree that the Merger
will be accounted for on the "pooling of interests" method under the
requirements of Opinion No. 16 (Business Combinations) of the
Accounting Principles Board of the American Institute of Certified
Public Accountants, as amended.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time
of the following conditions:
(a) Stockholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved and
adopted by the respective requisite affirmative votes of the
holders of TSX Common Stock and ANTEC Common Stock entitled to
vote thereon.
(b) Nasdaq-NMS Listing. The shares of ANTEC Common
Stock which shall be issued to the stockholders of TSX upon
consummation of the Merger shall have been authorized for listing
on The Nasdaq Stock Market's National Market, subject to official
notice of issuance.
(c) Other Approvals. All regulatory approvals
required to consummate the transactions contemplated hereby shall
have been obtained, on terms and conditions reasonably
satisfactory to each of TSX and ANTEC, and shall remain in full
force and effect and all statutory waiting periods in respect
thereof shall have expired (all such approvals and the expiration
<PAGE> 128
of all such waiting periods being referred to herein as the
"Requisite Regulatory Approvals").
(d) Third Party Approvals. All authorizations,
consents and approvals of any third party which if not obtained
would have a Material Adverse Effect on ANTEC or a Material
Adverse Effect on TSX shall have been obtained and shall be in
full force and effect.
(e) Registration Statements. The S-4 shall have
become effective under the Securities Act and no stop order
suspending the effectiveness of the S-4 shall have been issued
and no proceedings for that purpose shall have been initiated or,
to the knowledge of ANTEC or TSX, threatened by the SEC.
(f) No Injunctions or Restraints; Illegality. No
order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition
(an "Injunction") preventing the consummation of the Merger or
any of the other transactions contemplated by this Agreement
shall be in effect. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which
prohibits, materially restricts or makes illegal consummation of
the Merger.
(g) Federal Tax Opinion. TSX and ANTEC shall each
have received opinions from Schiff Hardin & Waite and Kemp,
Smith, Duncan & Hammond, P.C., (or such other counsel as the
parties may agree upon), in form and substance reasonably
satisfactory to each, dated as of the Effective Time,
substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective
Time:
(i) The Merger will constitute a tax free
reorganization under Section 368(a)(i)(A) of the Code, and
TSX and ANTEC will each be a party to the reorganization;
(ii) No gain or loss will be recognized by TSX
or ANTEC, as the case may be, as a result of the Merger;
(iii) No gain or loss will be recognized by the
stockholders of TSX who exchange their TSX Common Stock for
ANTEC Common Stock pursuant to the Merger;
(iv) The tax basis of the ANTEC Common Stock
received by stockholders who exchange all of their TSX
Common Stock solely for ANTEC Common Stock in the Merger
will be the same as the tax basis of the TSX Common Stock
surrendered in exchange therefor; and
<PAGE> 129
(v) The holding period of the ANTEC Common
Stock received by stockholders of TSX in the Merger will
include the period during which the shares of TSX Common
Stock surrendered in exchange therefor were held; provided,
such TSX Common Stock was held as a capital asset by the
holder of such TSX Common Stock or ANTEC Common Stock at the
Effective Time.
In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of TSX or
ANTEC, as the case may be, and others.
(h) Pooling of Interests. TSX and ANTEC shall have
received a copy of an opinion of Ernst & Young LLP, dated as of
the Effective Time, in substantially the form of Exhibit E, or
otherwise reasonably satisfactory to TSX and ANTEC, addressed to
ANTEC that, based on such procedures as were deemed relevant, the
Merger will qualify as a pooling of interests under generally
accepted accounting principles.
7.2 Conditions to Obligations of TSX. The obligation of
TSX to effect the Merger is also subject to the satisfaction, or
waiver by TSX, at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The
representations and warranties of ANTEC set forth in this
Agreement shall be true and correct in all material respects as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date or to
the extent changes to the underlying facts are expressly
authorized by this Agreement) as of the Closing Date as though
made on and as of the Closing Date.
(b) Performance of Obligations of ANTEC. ANTEC shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and TSX shall have received a certificate signed on
behalf of ANTEC by its President or a Vice President certifying
as to the matters specified in (a), (b) and (c) of this Section
7.2, and a certificate from the Secretaries of ANTEC and Merger
Sub certifying as to (i) the content and continuing effectiveness
as of the Closing Date of the resolutions of the sole stockholder
of Merger Sub and the boards of directors of ANTEC and Merger Sub
approving this Agreement and the transactions contemplated
hereby, and (ii) the fact that this Agreement and the
transactions contemplated hereby have been duly approved by the
requisite vote of the stockholders of ANTEC in accordance with
the certificate of incorporation of ANTEC, the rules and
regulations of the Nasdaq Stock Market, and the Delaware General
Corporate Law and that such approval is in full force and effect.
<PAGE> 130
(c) No Material Adverse Change. Since the date of
this Agreement, (i) no event shall have occurred which has had a
Material Adverse Effect on ANTEC, and (ii) no condition (other
than general economic or competitive conditions), event,
circumstances, fact or other occurrence shall have occurred that
may reasonably be expected to have or result in such a Material
Adverse Effect on ANTEC.
(d) Opinions of Counsel to ANTEC. TSX shall have
received from Schiff Hardin & Waite, counsel to ANTEC, and the
General Counsel of ANTEC, the opinions dated the Closing Date, in
substantially the form of Exhibit F, and from Kummer Kaempfer
Bonner & Renshaw, Nevada counsel to ANTEC and TSX, an opinion,
dated the Closing Date, in substantially the form of Exhibit H.
(e) Comfort Letters. TSX shall have received from
Ernst & Young LLP "comfort letters" dated the date of mailing of
the Joint Proxy Statement and the Closing Date, covering matters
customary to transactions such as the Merger and in form and
substance reasonably satisfactory to TSX.
(f) Availability of Pooling. TSX shall have received
an opinion, dated the Closing Date, from Ernst & Young LLP, in
substantially the form of Exhibit I, or otherwise reasonably
satisfactory to TSX, that, based upon such procedures as were
deemed relevant, ANTEC qualifies as an entity that may be a party
to a business combination for which the pooling of interests
method of accounting would be available.
7.3 Conditions to Obligations of ANTEC. The obligation of
ANTEC to effect the Merger is also subject to the satisfaction, or
waiver by ANTEC, at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The
representations and warranties of TSX set forth in this Agreement
shall be true and correct in all material respects as of the date
of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date or to the extent
changes to the underlying facts are expressly authorized by this
Agreement) as of the Closing Date as though made on and as of the
Closing Date.
(b) Performance of Obligations of TSX. TSX shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing
Date, and ANTEC shall have received a certificate signed on
behalf of TSX by its President or a Vice President certifying as
to the matters specified in (a), (b) and (c) of this Section 7.3,
and a certificate from the Secretary of TSX certifying as to (i)
the content and continuing effectiveness as of the Closing Date
of the resolutions of the board of directors of TSX approving
this Agreement and the transactions contemplated hereby, and
<PAGE> 131
(ii) the fact that this Agreement and the transactions
contemplated hereby have been duly approved by the requisite vote
of the stockholders of TSX in accordance with the articles of
incorporation of TSX and the NRS and that such approval is in
full force and effect.
(c) No Material Adverse Change. Since the date of
this Agreement, (i) no event shall have occurred which has had a
Material Adverse Effect on TSX, and (ii) no condition (other than
general economic or competitive conditions), event,
circumstances, fact or other occurrence shall have occurred that
may reasonably be expected to have or result in such a Material
Adverse Effect on TSX.
(d) Opinions of Counsel to TSX. ANTEC shall have
received from Kemp, Smith, Duncan & Hammond, P.C., counsel to
TSX, an opinion, dated the Closing Date, in substantially the
form of Exhibit G, and from Kummer Kaempfer Bonner & Renshaw,
Nevada counsel to ANTEC and TSX, an opinion, dated the Closing
Date, in substantially the form of Exhibit H.
(e) Comfort Letters. ANTEC shall have received from
KPMG Peat Marwick LLP "comfort letters" dated the date of mailing
of the Joint Proxy Statement and the Closing Date, covering
matters customary to transactions such as the Merger and in form
and substance reasonably satisfactory to ANTEC.
(f) Availability of Pooling. ANTEC shall have
received an opinion, dated the Closing Date, from KPMG Peat
Marwick LLP, in substantially the form of Exhibit J, or otherwise
reasonably satisfactory to ANTEC, that, based upon such
procedures as were deemed relevant, TSX qualifies as an entity
that may be a party to a business combination for which the
pooling of interests method of accounting would be available.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated prior to
the Effective Time:
(a) by mutual written consent of ANTEC and TSX; or
(b) (i) by either ANTEC or TSX if the Merger shall not
have been consummated by April 30,1997 provided that the right to
terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose failure to fulfill any material
obligation under this Agreement has been a cause of or has
resulted in the failure of the Merger to occur on or before such
date, and (ii) by either ANTEC or TSX if there has been a
material breach on the part of the other party in the
representations, warranties or covenants of the other party set
<PAGE> 132
forth herein, or any failure on the part of the other party to
comply with its obligations hereunder or any other events or
circumstances shall have occurred such that, in any case, any of
the conditions to the consummation of the Merger set forth in
Section 7.1 or Section 7.2 (as to termination by TSX) or Section
7.1 and 7.3 (as to termination by ANTEC) could not be satisfied
on or prior to April 30, 1997; or
(c) by either ANTEC or TSX if a court of competent
jurisdiction or other Governmental Entity shall have issued a
nonappealable final order, decree or ruling or taken any other
action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger other
than under any theory that this Agreement or the transactions
contemplated hereby, or their approval, violate the fiduciary
duties of the directors of ANTEC or TSX; or
(d) by either ANTEC or TSX, if, at the meeting of the
stockholders of ANTEC (including any adjournment or
postponement), the requisite vote of the stockholders of ANTEC in
favor of the Merger and the resulting issuance of shares shall
not have been obtained; or
(e) by either ANTEC or TSX, if, at the meeting of the
stockholders of TSX (including any adjournment or postponement),
the requisite vote of the stockholders of TSX in favor of this
Agreement and the Merger shall not have been obtained; or
(f) by ANTEC or TSX if a court of competent
jurisdiction or other Governmental Entity shall have issued an
order, decree or ruling or taken any other action, in each case
having the effect of restraining, enjoining or otherwise
prohibiting the Merger and compelling TSX to consider an
Alternate Transaction because it could be more favorable to its
stockholders than the transactions contemplated by this Agreement
(a "Superior Proposal");
(g) by ANTEC or TSX if a court of competent
jurisdiction or other Governmental Entity shall have issued an
order, decree or ruling or taken any other action, in each case
having the effect of restraining, enjoining or otherwise
prohibiting the Merger and compelling ANTEC to consider an
Alternate Transaction because it could be a Superior Proposal;
(h) by ANTEC if KPMG Peat Marwick LLP is unable to
provide the letter described in Section 7.3(f) because of an
error or omission in the information provided to Peat Marwick LLP
prior to the date hereof;
(i) by TSX if Ernst & Young LLP is unable to provide
the letter described in Section 7.2(f) because of an error or
omission in the information provided Ernst & Young LLP prior to
the date hereof.
<PAGE> 133
8.2 Effect of Termination.
(a) In the event of the termination of this Agreement
pursuant to Section 8.1 of this Agreement, this Agreement, except
for the provisions of Sections 6.2(b), 6.7, 8.2, 9.1, 9.2 and
9.9, shall become void and have no effect, without any liability
on the part of any party or its directors, officers or
stockholders. Notwithstanding the foregoing, except as provided
in subsections (b) and (c) below, nothing in this Section 8.2
shall relieve any party to this Agreement of liability for a
material breach of any provision of this Agreement occurring
prior to termination.
(b) In the event of the termination of this Agreement
by ANTEC or TSX pursuant to Section 8.1(e), (f), or (h), then in
any such case TSX will, within five business days following any
such termination by ANTEC, or in the case of a termination by TSX
at or prior to such termination, pay to ANTEC, as liquidated
damages, in exchange for a complete release of any liabilities of
TSX hereunder, in cash by wire transfer in immediately available
funds to an account designated by ANTEC a termination fee in an
amount equal to $6,000,000 (such amount, the "Termination Fee").
(c) In the event of the termination of this Agreement
by ANTEC or TSX pursuant to Section 8.1(d), (g), or (i), then in
any such case ANTEC will, within five business days following any
such termination by TSX or in the case of a termination by ANTEC
at or prior to such termination, pay to TSX, as liquidated
damages, in exchange for a complete release of any liabilities of
ANTEC hereunder, in cash by wire transfer in immediately
available funds to an account designated by TSX a termination fee
in an amount equal to the Termination Fee.
8.3 Amendment. Subject to compliance with applicable law,
this Agreement may be amended by the parties hereto, by action taken
or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with
the Merger by the stockholders of ANTEC or TSX; provided, however,
that after any approval of the transactions contemplated by this
Agreement by the respective stockholders of ANTEC or TSX there may not
be, without further approval of such stockholders, any amendment of
this Agreement which changes the amount or the form of the
consideration to be delivered to the holders of TSX Common Stock
hereunder. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their
respective Board of Directors, may, to the extent legally allowed, (a)
extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance with any of the
<PAGE> 134
agreements or conditions contained herein; provided, however, that
after any approval of the transactions contemplated by this Agreement
by the respective stockholders of ANTEC or TSX, there may not be,
without further approval of such stockholders, any waiver of any
portion of this Agreement that changes the amount or the form of the
consideration to be delivered to the holders of TSX Common Stock
hereunder. Any agreement on the part of a party hereto to any such
waiver shall be valid only if set forth in a written instrument signed
on behalf of such party, but such waiver or failure to insist on
strict compliance with an obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1 Non-survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and
agreements in this Agreement or in any instrument delivered pursuant
to this Agreement, which shall terminate in accordance with their
terms, shall survive the Effective Time, except for those covenants
and agreements contained herein and therein which by their terms apply
in whole or in part after the Effective Time. Without by implication
limiting the foregoing, none of the directors or officers of the
parties hereto shall have any liability for any of the
representations, warranties, covenants and agreements contained
herein.
9.2 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expense, provided,
however, that 60% of (i) all attorneys' fees incurred by the parties
in connection with the preparation and filing of the Joint Proxy
Statement, the S-4, or any other notice, filing, or application with
any Governmental Entity, Regulatory Agency or SRO to be made by ANTEC
or jointly by TSX and ANTEC, (ii) the costs and expenses of printing
and mailing the Joint Proxy Statement, (iii) all filing and other fees
paid to the Department of Justice or Federal Trade Commission (in
connection with the HSR Act), the SEC, or any State Regulatory Agency
in connection with the Merger and the transactions contemplated by
this Agreement, and (iv) all filing and other fees relating to the
listing of the ANTEC Common Stock on The Nasdaq Stock Market's
National Market, shall be borne by ANTEC and the remainder shall be
borne by TSX in the event that this Agreement is terminated prior to
the Effective Time.
9.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation), mailed by registered or
certified mail (return receipt requested) or delivered by a nationally
recognized overnight courier service (such as Federal Express) to the
<PAGE> 135
parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) if to TSX, to:
TSX Corporation
4849 N. Mesa, Suite 200
El Paso, Texas 79912
Attention: President
Telephone: (915) 543-4815
Telecopier: (915) 543-4821
with a copy to:
Kemp, Smith, Duncan & Hammond, P.C.
2000 Norwest Bank Plaza
El Paso, Texas 79901
Attention: Tad R. Smith
Telephone: (915) 533-4424
Telecopier: (915) 546-5360
and
(b) if to ANTEC, to:
ANTEC Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: President
Telephone: (847) 439-4444
Telecopier: (847) 439-8559
with copies to:
ANTEC Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: James E. Knox
Telephone: (847) 439-4444
Telecopier: (847) 439-8559
and
Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
Attention: Stuart L. Goodman
Telephone: (312) 258-5711
Telecopier: (312) 258-5600
9.4 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be
to a section of or exhibit or schedule to this Agreement unless
<PAGE> 136
otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation."
No provision of this Agreement shall be construed to require TSX,
ANTEC or any of their respective Subsidiaries or affiliates to take
any action which would violate any applicable law, rule or regulation.
9.5 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
9.6 Entire Agreement. This Agreement (including the
documents and the instruments referred to herein) together with the
Confidentiality Agreement between ANTEC and TSX dated as of August 16,
1996, constitute the entire agreement and supersede all other
agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof, including
but not limited to the letter agreement between the parties hereto
dated September 26, 1996. The Confidentiality Agreement, as amended
hereby, shall survive any termination of this Agreement.
9.7 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Nevada, without
regard to any applicable conflicts of law, except to the extent that
the law of the State of Delaware shall apply to certain matters of
corporate law relating to ANTEC, and except to the extent that state
law is superseded by federal law. The parties hereto consent to the
exclusive venue and jurisdiction of the Federal and state courts
located in the State of Nevada and agree not to institute any
litigation regarding this Agreement or the matters contemplated hereby
in any other court.
9.8 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
9.9 Publicity. Except as otherwise required by applicable
law or the rules of The Nasdaq Stock Market, neither TSX nor ANTEC
shall, or shall permit any of its Subsidiaries to, issue or cause the
publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning, the
transactions contemplated by this Agreement without the consent of the
other party, which consent shall not be unreasonably withheld.
<PAGE> 137
9.10 Assignment; Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations of the
parties under this Agreement shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and
assigns. Except as otherwise specifically provided in Section 6.7,
this Agreement (including the documents and instruments referred to
herein) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
IN WITNESS WHEREOF, ANTEC, TSX and Merger Sub have caused
this Agreement to be executed by their respective officers thereunto
duly authorized as of the date first above written.
ANTEC CORPORATION TSX CORPORATION
By: /s/ Lawrence A. Margolis By: /s/ William H. Lambert
----------------------------- ---------------------------
Name: Lawrence A. Margolis Name: William H.Lambert
Title: Executive Vice President Title: President and Chief
Executive Officer
TSX ACQUISITION CORPORATION
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Executive Vice President
<PAGE> 138
APPENDIX B
ALLEN & COMPANY INCORPORATED
711 FIFTH AVENUE - NEW YORK, NY 10022
(212) 832-8000
October 26, 1996
Board of Directors
TSX Corporation
4879 North Mesa
Suite 200
El Paso, TX 79912
Gentlemen:
We understand that TSX Corporation ("TSX") and ANTEC Corporation
("ANTEC") are considering entering into a merger agreement with terms
substantially as set forth in the draft dated October 24, 1996 (the
"Merger Agreement") proposing to effect a transaction as described in
the Merger Agreement and related documentation (the "Transaction").
Pursuant to an engagement letter dated September 12, 1994, as
amended, you have asked us to render our opinion as to the fairness of
the Transaction from a financial point of view to the shareholders of
TSX.
Allen & Company Incorporated ("Allen"), as part of its investment
banking business, is continually engaged in the valuation of
businesses and their securities in connection with mergers and
acquisitions, private placements and related financings, bankruptcy
reorganizations and similar recapitalizations, negotiated
underwritings, secondary distributions of listed and unlisted
securities, and valuations for corporate and other purposes.
As you know, Allen has been engaged by TSX since September 12,
1994, to render certain financial advisory services in connection with
a potential sale of TSX. In connection with such engagement, Allen
will receive a fee upon consummation of the Transaction.
Our opinion as expressed herein reflects and gives effect to our
general familiarity with TSX over a period of time, as well as
information concerning TSX and ANTEC which we acquired during the
course of this assignment, including information provided by senior
management in the course of a number of discussions. We have not,
however, conducted an independent appraisal of TSX's or ANTEC's
assets, or independently verified the information concerning TSX's or
ANTEC's operations or other data which we have considered in our
<PAGE> 139
review, and for the purpose of expressing our opinion set forth
herein, we have assumed that all such information is accurate,
complete and current. In arriving at our opinion, we were not
authorized to solicit, and did not solicit, interest from any third
party with respect to TSX or any of its assets.
In arriving at our conclusion, we have considered, among other
factors we deemed relevant, (i) the terms of the draft Merger
Agreement and related documentation (which prior to the delivery of
this opinion has not been executed by the parties); (ii) the nature of
the operations and financial history of TSX and ANTEC, including
discussions with senior management of TSX and ANTEC of the business
and prospects of TSX and ANTEC relating to, among other things, TSX's
and ANTEC's operating budget and financial outlook, as well as their
respective strategic objectives; (iii) TSX's and ANTEC's filings with
the Securities and Exchange Commission, including audited and
unaudited financial statements for TSX and ANTEC; (iv) certain
publicly available reports on TSX and ANTEC independently prepared by
various research analysts; (v) the historical trading information for
the common stock of TSX and ANTEC; (vi) the impact the Transaction
would have on the earnings of ANTEC; (vii) certain financial and stock
market information for certain other companies in businesses related
to those of TSX or ANTEC; (viii) certain financial information
relating to certain merger and acquisition transactions involving
companies in businesses related to those of TSX or ANTEC; and (ix)
certain publicly available information relating to premiums paid in
certain selected stock-for-stock merger and acquisition transactions.
In addition to our review and analyses of the specific information set
forth above, our opinion herein reflects and gives effect to our
assessment of general economic, monetary, market and industry
conditions existing as of the date hereof as they may affect the
business and prospects of TSX and ANTEC.
This opinion has been prepared at your request for the benefit of
the Board of Directors of TSX.
The opinion rendered herein does not constitute a recommendation
to stockholders of TSX in connection with their vote concerning the
Transaction.
Based upon and subject to the foregoing, it is our opinion as of
the date hereof that the Transaction is fair, from a financial point
of view, to the shareholders of TSX.
Very truly yours,
ALLEN & COMPANY INCORPORATED
<PAGE> 140
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the provisions of the Delaware General
Corporation Law ("Delaware GCL"), ANTEC has adopted provisions in its
Certificate of Incorporation and Bylaws which require ANTEC to
indemnify its officers and directors to the fullest extent permitted
by law, and eliminate the personal liability of its directors to ANTEC
or its stockholders for monetary damages for breach of their duty of
due care except: (a) for any breach of the duty of loyalty; (b) for
acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of law; (c) for liability under
Section 174 of the Delaware GCL (relating to certain unlawful
dividends, stock repurchases or stock redemptions); or (d) for any
transaction from which the director derived any improper personal
benefit. In addition, ANTEC's Certificate of Incorporation and Bylaws
require ANTEC to indemnify its directors and officers, permit ANTEC to
insure its directors and officers and permit ANTEC to indemnify or
insure its employees or agents to the fullest extent permitted by
Delaware law, including those circumstances in which indemnification
would otherwise be discretionary, except that ANTEC shall not be
obligated to advance expenses or to indemnify any such person (a) with
respect to proceedings, claims or actions initiated or brought
voluntarily by any such person and not by way of defense, (b) for any
amounts paid in settlement of an action indemnified against by ANTEC
without the prior written consent of ANTEC, or (c) in connection with
any event in which the person did not act in good faith and in a
manner reasonably believed to be in or not opposed to the best
interest of the Corporation.
The registrant currently maintains an insurance policy
which, within the limits and subject to the terms and conditions
thereof, covers certain expenses and liabilities that may be incurred
by directors and officers in connection with or as a consequence of
certain actions, suits or proceedings that may be brought against them
as a result of an act or omission committed or suffered while acting
as a director or officer of the registrant. The registrant intends to
maintain this insurance policy after the completion of the merger.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES.
(a) The exhibits filed herewith are set forth on the
exhibit index filed as part of this registration statement at page II-
4.
(b) Not applicable.
(c) Not applicable. The fairness opinion of Allen &
Company Incorporated has been included as an appendix to the
prospectus.
<PAGE> 141
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar value
of securities offered would not exceed that
which was registered) and any deviation from
the low or high end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with
respect o the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the Registration
Statement;
PROVIDED, HOWEVER, that paragraphs 1(i) and 1(ii) do not
apply if the registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in
a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
2. That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
<PAGE> 142
of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
3. To remove from registration by means of post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes as
follows:
1. That prior to any public reoffering of the
securities registered hereunder through use of a prospectus
which is part of this registration statement, by any person
or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called
for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of
the applicable form.
2. The registrant undertakes that every prospectus
(i) that is filed pursuant to the paragraph immediately
preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed
as part of an amendment to the registration statement and
will not be used until such amendment is effective, and
that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or preceding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE> 143
(d) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within
one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through
the date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was
not the subject of and included in the registration statement when it
became effective.
<PAGE> 144
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Rolling Meadows, and the State of Illinois,
on the 31 day of December, 1996.
ANTEC CORPORATION
By: /s/ John M. Egan
---------------------------
John M. Egan, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 31, 1996.
/s/ John M. Egan /s/ Lawrence A. Margolis
- ------------------------------ ------------------------------
John M. Egan Lawrence A. Margolis
President, Chief Executive Executive Vice President
Officer and Director and Secretary
(Principal Executive Officer) (Principal Financial Officer)
/s/ Daniel J. Distel /s/ Rod F. Dammeyer
- ------------------------------ ------------------------------
Daniel J. Distel Rod F. Dammeyer, Director
Vice President and Controller
(Principal Accounting Officer)
/s/ James L. Faust /s/ John R. Petty
- ------------------------------ ------------------------------
James L. Faust, Director John R. Petty, Director
/s/ Bruce Van Wagner
- ------------------------------ ------------------------------
Samuel K. Skinner, Director Bruce Van Wagner, Director
/s/ Mary Agnes Wilderotter
- ------------------------------
Mary Agnes Wilderotter, Director
<PAGE> 145
POWER OF ATTORNEY
Each person whose signature appears above authorizes John M. Egan
or Lawrence A. Margolis, severally, to execute in the name of each
such person, and file, any amendment to this Registration Statement
necessary or advisable to enable the registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in respect
thereof, in connection with the registration of the securities which
are the subject hereof, which amendment may make such changes herein
as either of the above-named attorneys deems appropriate.
<PAGE> 146
EXHIBIT INDEX
Exhibit
Number
- ------
2.1 Plan of Merger, among ANTEC Corporation, TSX
Corporation and TSX Acquisition Corporation, dated
October 28, 1996 (incorporated by reference to Appendix
A of the Joint Proxy Statement-Prospectus)
5 Opinion of Schiff Hardin & Waite as to the legality of
the common stock
8.1 Opinion of Schiff Hardin & Waite regarding certain
federal income tax matters
23.1 Consent of Schiff Hardin & Waite (included in
Exhibit 5)
23.2 Consent of Ernst & Young LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of William H. Lambert
24.1 Powers of Attorney (included on signature page of this
Registration Statement)
99.1 Form of Proxy of ANTEC Corporation
99.2 Form of Proxy of TSX Corporation
</TABLE>
EXHIBIT 5
SCHIFF HARDIN & WAITE
7200 SEARS TOWER
CHICAGO, ILLINOIS 60606
W. Brinkley Dickerson
(312) 258-5633
December 31, 1996
ANTEC Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Re: ANTEC Corporation Registration
Statement on Form S-4
-------------------------------------------------
Ladies and Gentlemen:
We are acting as special counsel to ANTEC Corporation, a
Delaware corporation, in connection with ANTEC's filing of a
Registration Statement on Form S-4 with the Securities and Exchange
Commission covering up to 16,313,966 shares of common stock to be
issued pursuant to the Plan of Merger, dated October 28, 1996, among
ANTEC, TSX Corporation and TSX Acquisition Corporation. In that
connection, we have examined such corporate records, certificates and
other documents and have made such other factual and legal
investigations as we have deemed necessary or appropriate for the
purposes of this opinion.
Based upon the foregoing, it is our opinion that the ANTEC
common stock when issued in exchange for shares of common stock of
TSX, as contemplated by and described in the Registration Statement,
will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement and to the reference to us under the
caption "Opinions" in the Joint Proxy Statement-Prospectus contained
in the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ W. Brinkley Dickerson, Jr.
------------------------------
W. Brinkley Dickerson, Jr.
EXHIBIT 8.1
December 31, 1996
Antec Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60009
Ladies & Gentlemen:
You have requested our opinion regarding certain federal
income tax consequences of the merger (the Merger ) of TSX
Acquisition Corporation, a Nevada corporation ( Acquisition ), with
and into TSX Corporation, a Nevada corporation ( TSX ). Acquisition
is a wholly owned subsidiary of Antec Corporation, a Delaware
corporation ( Antec ).
In formulating our opinion, we examined such documents as we
deemed appropriate, including the Plan of Merger among Acquisition,
Antec and TSX dated October 28, 1996 ( Merger Agreement ) and the
Joint Proxy Statement included in the Registration Statement on Form
S-4, as filed by Antec with the Securities and Exchange Commission on
December 31, 1996 (the Registration Statement ). In addition, we
have obtained such additional information as we have deemed relevant
and necessary through consultation with various officers and
representatives of Antec and TSX.
Our opinion set forth below assumes (1) the accuracy of the
statements and facts concerning the Merger set forth in the Merger
Agreement and the Registration Statement, (2) the consummation of the
Merger in the manner contemplated by, and in accordance with the terms
set forth in, the Merger Agreement and the Registration Statement and
(3) the accuracy of (i) the representations made by Antec, as set
forth in an the Officers Certificate delivered to us by Antec, dated
the date hereof, and as to be updated as of the Effective Time of the
Merger, (ii) the representations made by TSX, which are set forth in
the Officers Certificate delivered to us by TSX, dated the date
hereof, and as to be updated as of the Effective Time of the Merger
and (iii) the representations made by certain shareholders of TSX in
Certificates delivered to us by such persons, dated the date hereof,
and as to be updated as of the Effective Time of the Merger.
In connection with the Merger, the shareholders of TSX will
exchange, in the aggregate, all of the shares of TSX common stock $.01
par value (the Common Stock ) for the right to receive, in the
aggregate, solely shares of Antec common stock $.01 par value ( Antec
Common Stock ) on a one share for one share basis.
Based upon the facts and statements set forth above, our
examination and review of the documents referred to above and subject
to the assumptions set forth above, we are of the opinion that for
federal income tax purposes:
<PAGE> 149
1. The Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) and Section
368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the Code ).
2. No gain or loss will be recognized by TSX, Antec or
Acquisition, as the case may be, as a result of the
Merger.
3. No gain or loss will be recognized by the shareholders
of TSX upon the receipt of Antec Common Stock in
exchange for their Common Stock.
4. The basis of the Antec Common Stock received by a TSX
shareholder will be the same as the basis of Common
Stock that was exchanged therefor.
5. The holding period of the Antec Common Stock received
by a TSX shareholder will include the period during
which the Common Stock surrendered in exchange therefor
was held by a TSX shareholder provided that the Common
Stock surrendered was a capital asset in the hands of
the TSX shareholder on the date of the exchange.
We express no opinion concerning any tax consequences of the Merger
other than those specifically set forth herein.
Our opinion is based on current provisions of the Code, the
Treasury Regulations promulgated thereunder, published pronouncements
of the Internal Revenue Service and case law, any of which may be
changed at any time with retroactive effect. Any change in applicable
laws or facts and circumstances surrounding the Merger, or any
inaccuracy in the statements, facts, assumptions and representations
on which we have relied, may affect the continuing validity of the
opinions set forth herein. We assume no responsibility to inform you
of any such change or inaccuracy that may occur or come to our
attention.
SCHIFF HARDIN & WAITE
By: /s/Lawrence H. Jacobson
---------------------------
Lawrence H. Jacobson
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-4 and related Prospectus of ANTEC
Corporation for the registration of 16,313,966 shares of its common
stock and to the incorporation by reference therein of our report
dated January 30, 1996, with respect to the consolidated financial
statements of ANTEC Corporation included in its Annual Report (Form
10-K) for the year ended December 31, 1995, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
December 30, 1996
EXHIBIT 23.3
The Board of Directors
TSX Corporation:
We consent to the use of our report included herein and to the
reference to our firm under the heading "Experts" in the registration
statement.
KPMG PEAT MARWICK LLP
El Paso, Texas
December 30, 1996
EXHIBIT 23.4
CONSENT
I, William H. Lambert, hereby consent, that upon the consummation
of the merger between TSX Corporation and ANTEC Corporation, I will
agree to serve on the Board of Directors of ANTEC Corporation.
Dated: December 19, 1996 /s/William H. Lambert
----------------------------
William H. Lambert
EXHIBIT 99.1
[FRONT]
ANTEC CORPORATION
PROXY SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints John M. Egan, Lawrence A. Margolis and
Daniel J. Distel and each of them (with full power of substitution in
each) proxies of the undersigned to vote at the Special Meeting of
Stockholders of ANTEC Corporation to be held at 10:00 a.m., central
time, February 6, 1997, at the Meadows Corporate Auditorium, 2850 West
Golf Road, Rolling Meadows, Illinois, and at any adjournments thereof,
all the shares of Common Stock of ANTEC Corporation in the name of the
undersigned on the record date.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSAL ON THE REVERSE SIDE OF THIS
CARD
(Continued, and to be dated and signed on the reverse side.)
<PAGE> 154
[REVERSE]
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED FOR THE PROPOSAL.
Proposal to approve the Plan of Merger, dated as of October 28,
1996, and the issuance of shares of ANTEC common stock to TSX
stockholders in the Merger, as more fully described in the Joint
Proxy Statement-Prospectus dated December 31, 1996.
FOR ___ AGAINST ___ ABSTAIN ___
Change of Address and or Comments Mark Here ___
IMPORTANT: Please date this proxy and sign exactly as your name
appears hereon. If stock is held jointly, both holders should sign.
Executors, administrators, trustees, guardians and officers signing in
a representative capacity should give full title.
Dated: ___________________________
-----------------------------------
(Signature of Stockholder)
-----------------------------------
(Signature if held jointly)
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK.
----
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
EXHIBIT 99.2
[FRONT]
TSX CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Victor D. Gherson and
William H. Lambert, or either one of them acting in the absence of the
other, with full power of substitution, as Proxies to vote all shares
of Common Stock of TSX Corporation (the "Company") which the
undersigned may be entitled to vote at the Special Meeting of the
stockholders of the Company to be held at 10:00 a.m., Mountain time,
February 6, 1997, at the TSX Corporate Offices, 4849 N. Mesa, Suite
200, El Paso, Texas, and at any and all adjournments thereof, for the
following purposes (as described in the Proxy Statement):
(Please Sign and Date the Other Side)
[REVERSE]
1. FOR ___ AGAINST ___ ABSTAIN ___ Proposal to approve and
adopt the Plan of Merger,
dated as of October 28,
1996, as more fully
described in the
accompanying Joint Proxy
Statement-Prospectus.
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1 ON THE FACE OF THIS CARD, AND IN
THE PROXIES' DISCRETION ON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
DATE: _________________________, 1996.
----------------------------------------
(Signature)
----------------------------------------
(Signature)
Please sign as name appears on stock
certificate. When signing as executor,
administrator, attorney, trustee or
guardian, please give full title as
such. If a corporation, please sign in
full corporate name by president or
other authorized officer. If a
partnership, please sign in partnership
name by authorized person. If a joint
tenancy, please have both joint tenants
sign.
