SEC Company Response from AMX — Mar 16, 2005
AMX CORP /TX/ (CIK 0000944248)
Date: March 16, 2005 · CIK: 0000944248 · Accession: 0001047469-05-006767
AI Filing Summary & Sentiment
Referenced dates: March 5, 2005
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CORRESP
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March 16, 2005
VIA
EDGAR CORRESPONDENCE, FAX AND FEDERAL EXPRESS
Nicholas
P. Panos, Esq.
Special Counsel
Office of Mergers & Acquisitions
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0303
Re:AMX Corporation
Schedule TO-T; Schedule TO-T/A Filed February 24
and March 1, 2005, respectively
SEC File No. 5-46481
Dear Mr. Panos:
On
behalf of Amherst Acquisition Co. ("Subcorp"), a Texas corporation and a wholly-owned subsidiary of Thrall Omni Company, Inc., a
Delaware corporation ("Thrall Omni"), which is an affiliate of Duchossois Industries, Inc., an Illinois corporation
("DII"), this letter responds to your letter dated March 5, 2005 (the "Comment Letter"),
providing comments on DII's, Thrall Omni's and Subcorp's Schedule TO-T dated February 24, 2005 and Schedule TO-T/A dated March 1, 2005 (collectively, the
"Schedule TO"). For your convenience, each comment from the Comment Letter has been reproduced below, followed by DII's, Thrall Omni's and Subcorp's
response to such comment. Capitalized terms defined in the Schedule TO and used in the following responses without definition shall have the meanings specified in the Schedule TO.
General
1.Please advise us as to how the bidders commenced the offer under Rule 14d-2 and the method by which the offering materials have been
disseminated.
The
bidders commenced the Offer under Rule 14d-2 on February 24, 2005 pursuant to a summary publication in the national edition of The Wall Street Journal. On
February 24, 2005, Merrill Corporation, the bidders' financial printer, mailed the tender offer materials by first-class mail to the approximately 190 record holders of AMX common shares. Also
on that date, Georgeson Shareholder Communications, Inc., the information agent for the Offer, commenced a mailing of approximately 9,000 copies of the tender offer materials to "the Street"
(i.e., brokers, dealers, commercial banks, trust companies and other nominees) for distribution to beneficial owners of AMX common shares.
2.Please advise us what consideration has been given to continuing to update the Schedule TO disclosure to reflect any material developments in the course of the
private litigation and the extent to which such amendments, if filed, will be viewed as a material change to the offer disclosure requiring that at least five business days remain in the tender offer.
In addition, advise us how such changes will be disseminated to security holders.
On
March 9, 2005, Thrall Omni filed Amendment No. 2 to the Schedule TO with the Commission to provide updated disclosures relating to the private litigation against AMX and
its board of directors. Amendment No. 2 to the Schedule TO is available to the public and AMX's shareholders at the internet world wide web site maintained by the Commission at
http://www.sec.gov. Thrall Omni does not believe that the updated disclosures set forth in Amendment No. 2 materially change the offer disclosure already provided to AMX's shareholders in the
Offer to Purchase. Nonetheless, the updated disclosures relating to the private litigation against AMX and its board of directors set forth in Amendment No. 2 to the Schedule TO have been
reproduced in full in a Supplement to the Offer to
Purchase
which is an exhibit to the Schedule TO amendment filed in response to this Comment Letter. The Supplement to the Offer to Purchase is being mailed to AMX's shareholders.
DII,
Thrall Omni and Subcorp will continue to monitor developments in the private litigation against AMX and its board of directors in order to determine whether further amendments to
the Schedule TO are necessary. DII, Thrall Omni and Subcorp will evaluate the materiality of such developments on
a case-by-case basis to determine whether any of such developments require that the Offer to remain open for at least five business days.
3.The Schedule TO-C filed on February 15, 2005 indicated that forward-looking statements made in connection with the tender offer enjoyed the
safe harbor protection afforded by the Private Securities Litigation Reform Act of 1995. This Act, by its terms, does not apply to forward-looking statements made in connection with a tender offer.
Please revise the SC TO disclosure to affirmatively indicate that the forward-looking statements made in connection with this tender offer have not been protected by the Act's safe harbor, and confirm
that the bidders will not reference in future communications the Act in this context.
The
Schedule TO has been amended in response to the Comment Letter to include the following:
Forward-looking
statements made by DII, Thrall Omni, Subcorp and AMX in connection with the Offer, whether made prior to or after the date hereof, are not entitled to the benefit of the safe harbor
protections afforded by the Private Securities Litigation Reform Act of 1995.
DII,
Thrall Omni and Subcorp confirm that they will not reference the safe harbor provisions of the PSLRA in any future press releases or other communications relating to the Offer.
8. Information Concerning AMX
4.Please refer to the first paragraph of this section. We note that the bidders are not assuming responsibility for the accuracy or completeness of any
information contained in this Section. While the bidders may include appropriate language about the limits on the reliability of the information, the bidders may not disclaim responsibility for its
accuracy. Please revise.
The
Schedule TO has been amended in response to the Comment Letter to include the following:
Except
as otherwise set forth herein, the information concerning AMX contained in this Offer to Purchase has been furnished by AMX or taken from or based upon publicly available documents and records
on file with the Commission and other public sources. The following description of AMX and its business has been taken from AMX's Annual Report on Form 10-K for the fiscal year
ended March 31, 2004, and is qualified in its entirety by reference thereto. None of DII, Thrall Omni, Subcorp, or any of their respective affiliates, the Dealer Manager, the Information Agent
or the Depositary have any means of verifying the accuracy or completeness of any of the information contained herein which is derived from AMX's filings with the Commission or whether there has been
any failure by AMX to disclose events which may have occurred or may affect the significance or accuracy of any such information.
5.Disclose, if true, the extent to which members of AMX management members will benefit from a change of control transaction due to the receipt of benefits or
other compensation arrangements not shared on a pro rata basis with unaffiliated security holders. Quantify those benefits or additional compensation to the extent practicable. See Item 1011(b) of
Regulation M-A.
We
do not believe that members of AMX management will benefit from a change of control transaction due to the receipt of benefits or other compensation arrangements not shared on a pro
rata basis with unaffiliated security holders. In particular, Thrall Omni has no present intention of
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terminating
any member of AMX management. Nonetheless, the Schedule TO has been amended in response to the Comment Letter to include the following:
Interests of AMX Directors and Executive Officers in the Merger.
In
considering the recommendation of the AMX board of directors with respect to the Merger, AMX shareholders should be aware that certain executive officers and directors of AMX have certain interests
in the Merger that may be different from, or in addition to, the interests of AMX shareholders generally. The AMX board of directors was aware of the interests described below and considered them,
among other factors, when adopting the Merger Agreement and recommending that AMX shareholders accept the Offer and tender their Shares under the Offer. These interests are summarized below.
Stock Options and Restricted Share Grants. Directors and executive officers of AMX may tender any of their Shares (including unvested
restricted share grants) or receive Merger Consideration with respect to any of such Shares not tendered in the same manner as other AMX shareholders. All outstanding Options, whether vested or
unvested, and whether or not held by directors and executive officers, will be converted into the right to receive the Option Consideration.
Unvested Restricted Shares and Unvested Options. The following table sets forth the number of shares subject to unvested Options, if any,
held by AMX's named executive officers, the number of unvested restricted share grants, if any, held by AMX's named executive officers and the amounts to be received in respect of such Options and
restricted share grants upon their tender in the Offer and exchange in the Merger, as applicable. The directors, other than Mr. Carroll, hold no unvested Options or unvested restricted share
grants.
Name
Unvested
Restricted
Shares
Total $ To Be
Received for
Unvested
Restricted
Shares
Unvested
Options
Net $ To
Be Received
for Unvested
Options
Total $ To Be
Received for
Unvested
Restricted
Shares and
Options
C. Chris Apple
Executive
25,000
$
562,500.00
13,333
$
274,259.81
$
836,759.81
Robert J. Carroll
Executive/Director
113,750
2,559,375.00
120,000
649,200.00
3,208,575.00
Carl D. Evans
Executive
22,750
511,875.00
16,666
342,819.62
854,694.62
Peter C. Nohren
Executive
20,250
455,625.00
10,000
205,700.00
661,325.00
Scott D. Norder
Executive
30,000
675,000.00
20,000
407,400.00
1,082,400.00
Rashid M. Skaf
Executive
30,000
675,000.00
13,333
274,259.81
949,259.81
Shares and Vested Options. The following table sets forth the number of Shares owned by AMX's directors and named executive officers, the
number of vested Options, if any, held by AMX's
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directors
and named executive officers, and the amounts to be received in respect of such Shares and Options.
Name
Shares
Owned*
Total $ To
Be Received
for Shares
Owned
Vested
Options
Net $ To Be
Received for
Vested
Options
Total $ To Be
Received for
Shares and
Options
Lawrence N. Goldstein
Director
7,500
$
168,750.00
57,340
$
960,725.14
$
1,129,475.14
Thomas L. Harrison
Director
—
—
60,540
1,015,741.06
1,015,741.06
David R. Richard
Director
2,500
56,250.00
41,340
642,325.14
698,575.14
Richard L. Smith
Director
—
—
88,565
1,569,133.29
1,569,133.29
John E. Wilson
Director
2,800
63,000.00
57,340
961,845.14
1,024,845.14
C. Chris Apple
Executive
47,926
1,078,335.00
66,667
1,334,140.19
2,412,475.19
Robert J. Carroll
Executive/Director
18,992
427,320.00
315,000
6,280,385.00
6,707,705.00
Carl D. Evans
Executive
26,102
587,295.00
58,334
1,112,430.38
1,699,725.38
Peter C. Nohren
Executive
14,520
326,700.00
55,000
1,111,350.00
1,438,050.00
Scott D. Norder
Executive
2,100
47,250.00
50,000
1,016,600.00
1,063,850.00
Rashid M. Skaf
Executive
24,600
553,500.00
66,667
1,334,140.19
1,887,640.19
*Includes
vested restricted share grants.
Under
the Support Agreements, the executive officers of the Company have agreed, subject to certain conditions, to tender all of their Shares to Subcorp in the Offer, except that Mr. Carroll
will not tender the 60,000 restricted share grants he received in December 2004, in order to avail himself of an exemption under the federal securities laws for "short-swing" sales, which
avoids the forfeiture of any value he will receive. These 60,000 restricted share grants will be exchanged in the Merger for $22.50 per Share in cash, without interest.
Indemnification and Insurance. The Merger Agreement provides that all rights to indemnification from liabilities for acts or omissions
occurring prior to the Effective Time existing in favor of current or former officers or directors of AMX under AMX's Articles of Incorporation will be assumed by the Surviving Corporation and will
continue in full force and effect following completion of the Merger.
The
Merger Agreement also provides that for six years after the Effective Time, Thrall Omni will maintain policies of directors' and officers' liability insurance covering each person who was covered
under the policies of directors' and officers' liability insurance maintained by AMX as of
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February 15,
2005 with substantially the same coverage and containing substantially similar terms and conditions as such existing policies.
Employment Agreements and Other Arrangements. The executive officers of AMX have not entered into any employment arrangements with DII,
Thrall Omni or any of their respective affiliates. The only arrangements that the AMX executive officers expect to have in place at the Effective Time are the existing employment agreements between
AMX and certain executive officers as more fully described under the heading "Employment Agreements" on page A-17 of the Information Statement attached as Annex A to the
Schedule 14D-9 filed with the Commission by AMX on February 24, 2005 and previously mailed to you.
AMX
amended and restated its employment agreement with Mr. Carroll on January 5, 2005, to be effective as of December 10, 2004. Mr. Carroll's previous agreement (the "Old
Carroll Agreement") had
been scheduled to expire on March 31, 2005 and the Compensation Committee commenced negotiation of the amended and restated agreement (the "New Carroll Agreement") with Mr. Carroll in
mid-2004. The New Carroll Agreement provides for an increase in Mr. Carroll's base salary from $375,000 to $410,000. Furthermore, under the Old Carroll Agreement, if
Mr. Carroll was terminated without cause, AMX was required to pay, among other things, severance payments in an amount equal to the base salary that would have been payable to him over the
longer of (i) the period commencing on the date of termination and ending at the expiration of 12 months following the date of termination and (ii) the remaining term of the
agreement. AMX was not required to pay any prorated bonus payments. Under the New Carroll Agreement, if Mr. Carroll is terminated without cause, AMX is required to pay, among other things,
severance pay in an amount equal to the base salary that would be payable to him over the period commencing on the date of termination and ending at the expiration of 24 months following the
date of termination, and AMX is required to pay a prorated bonus payment, if applicable in accordance with the New Carroll Agreement, with respect to the fiscal year in which the termination occurs.
Depending on the timing of a termination of employment and the financial performance of AMX at the time of such termination, Mr. Carroll's severance pay under the New Carroll Agreement may be
more or less than it would have been under the Old Carroll Agreement. In addition, if Mr. Carroll's employment is terminated by AMX without cause or by Mr. Carroll for good reason due to
any purported reduction in the base salary payable to him under the New Carroll Agreement at any time following a change in control, or is otherwise terminated by Mr. Carroll following the six
month anniversary of a change of control, AMX will pay to Mr. Carroll, in addition to any amounts otherwise payable under the New Carroll Agreement, a lump sum stay bonus equal to six months of
Mr. Carroll's then current base salary. This provision was added by the Compensation Committee in order to induce Mr. Carroll to provide transition services in the event that the AMX was
sold. On the effective date of the New Carroll Agreement, Mr. Carroll also was granted 120,000 stock options and 60,000 restricted share grants.
AMX
entered into an employment agreement with Mr. Apple on January 25, 2005, to be effective as of December 3, 2004 (the "New Apple Agreement") in order to replace
Mr. Apple's previous agreement (the "Old A