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ANLY > SEC Filings for ANLY > Form 8-K on 28-Aug-2013All Recent SEC Filings

Show all filings for ANALYSTS INTERNATIONAL CORP

Form 8-K for ANALYSTS INTERNATIONAL CORP


28-Aug-2013

Entry into a Material Definitive Agreement, Material Modification to


Item 1.01. Entry into a Material Definitive Agreement

Merger Agreement

On August 27, 2013, Analysts International Corporation (the "Company") entered into an Agreement and Plan of Merger (the "Merger Agreement") with American CyberSystems, Inc. ("Parent") and ACS Merger Corp., a wholly owned subsidiary of Parent ("Merger Sub"), for the acquisition of the Company by Merger Sub. Pursuant to the terms of the Merger Agreement, Merger Sub will acquire all of the issued and outstanding shares of the Company's common stock for $6.45 per share (the "Offer Price"), or approximately $35 million in the aggregate, through a cash tender offer followed by a merger.

Following either the consummation of the tender offer or Parent's election to convert the transaction to a one-step merger in accordance with the Merger Agreement, Merger Sub will merge with and into the Company and the Company will become a wholly owned subsidiary of Parent (the "Merger"). In the Merger, the remaining shareholders of the Company will be entitled to receive, in cash, $6.45 per share of the Company's common stock held by such shareholders.

The Company has made various representations and warranties and agreed to specified covenants in the Merger Agreement. The Company's covenants include those relating to the Company's conduct of its business between the date of the Merger Agreement and the closing of the Merger; restrictions on soliciting proposals for alternative transactions; public disclosures; and other matters. The Merger Agreement contains certain termination rights of Parent and the Company and provides that, upon the termination of the Merger Agreement under specified circumstances, the Company will be required to pay Parent a termination fee of $1.0 million.

The Company's Board of Directors (the "Board"), acting upon the unanimous recommendation of a special committee composed entirely of non-employee directors, has unanimously approved the Merger Agreement and unanimously recommends that the shareholders of the Company tender their shares of Company common stock in the tender offer. The closing of the tender offer is conditioned on, among other things, the tender of at least 60 percent of the outstanding shares of the Company's common stock on a fully diluted basis, receipt of funding of Parent's financing commitments, the absence of a material adverse effect on the Company, and other customary closing conditions. Depending on the number of shares held by Merger Sub after its acceptance of the shares properly tendered in connection with the tender offer, the Company's shareholders that remain after the completion of the tender offer, including Merger Sub, may be required to approve the Merger. If the Merger Agreement is terminated under specified circumstances and all conditions to closing, other than Parent's receipt of funding, are then capable of being satisfied, Parent will be required to pay the Company a termination fee of $1.0 million.

Subject to the terms and conditions of the Merger Agreement, the Company has granted Merger Sub an option that is irrevocable during the term of the Merger Agreement (the "Top-Up Option") to purchase an aggregate number of newly-issued shares that, at the time of such exercise, constitutes one share more than 90% of the number of fully-diluted shares of the Company's common stock but not less than one share more than 90% of the number of shares of the Company's common stock then outstanding (after giving effect to the issuance of the shares of common stock acquired upon exercise of the Top-Up Option), subject to authorized shares being available for issuance. The Top-Up Option is exercisable only after shares have been purchased pursuant to the tender offer. The consideration for each share of Company common stock acquired upon exercise of the Top-Up Option will be $6.45 per share and will be paid, at Merger Sub's election, (i) entirely in cash, (ii) by delivering to the Company Merger Sub's unsecured, non-negotiable, non-transferable promissory note in the principal amount of such purchase price, or (iii) a combination of cash and a promissory note.

The Merger Agreement provides that the Board will terminate the 1996 Stock Option Plan for Non-Employee Directors, the 1999 Stock Option Plan, the 2000 Non-Qualified Stock Option Plan, the 2004 Equity Incentive Plan, and the 2009 Equity Incentive Plan as of the date and time the Merger becomes effective pursuant to the Merger Agreement (the "Effective Time").


The Merger Agreement has been included to provide information regarding its terms. It is not intended to modify or supplement any factual disclosures about the Company, Parent or Merger Sub in any public reports filed with the U.S. Securities and Exchange Commission (the "SEC") by the Company, Parent or Merger Sub. In particular, the assertions embodied in the representations, warranties, and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specified dates, were solely for the benefit of the parties to the Merger Agreement, and are subject to limitations agreed upon by the parties to the Merger Agreement, including being qualified by confidential disclosure schedules provided by the Company to Parent in connection with the execution of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, . . .



Item 3.03. Material Modification of Rights of Security Holders.

The information set forth under Item 1.01 is hereby incorporated by reference into this Item 3.03.



Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth under Item 1.01 is hereby incorporated by reference into this Item 5.02.



Item 8.01. Other Events.

On August 28, 2013, the Company issued a press release announcing that it had entered into the Merger Agreement. A copy of the press release is attached hereto as Exhibit 99.1.

Note to Security Holders

The tender offer for the outstanding shares of the Company's common stock described in this Form 8-K has not yet commenced. This Form 8-K is neither an offer to purchase nor a solicitation of an offer to sell securities. The solicitation and the offer to buy shares of the Company's common stock will be made pursuant to an offer to purchase and other related materials that Merger Sub and Parent expect to file with the SEC. At the time the tender offer is commenced, Merger Sub and Parent will file a tender offer statement on Schedule TO (including an offer to purchase, a related letter of transmittal, and other tender offer documents) with the SEC, and the Company will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. Shareholders of the Company are strongly advised to read the tender offer statement (including an offer to purchase, a related letter of transmittal, and other tender offer documents) and the related solicitation/recommendation statement when they become available because they will contain important information that the Company's shareholders should consider before making any decision regarding tendering their shares. These materials (and all other materials filed by the Company with the SEC) will be available to all shareholders of the Company at no expense to them on the SEC's website at www.sec.gov. Free copies of the tender offer statement and related materials and the solicitation/recommendation statement, when available, may be obtained from the information agent for the tender offer or from the "Investor Relations" section of the Company's website at www.analysts.com.

Forward-Looking Statements

This Form 8-K contains forward-looking statements that are not historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue," or comparable


terminology, are intended to identify forward-looking statements. Forward-looking statements in this Form 8-K include statements regarding the anticipated timing of filings and approvals relating to the transaction; statements regarding the expected timing of the completion of the transaction; and any statements of assumptions underlying any of the foregoing. All forward-looking statements are based largely on current expectations and beliefs concerning future events, approvals and transactions that are subject to substantial risks and uncertainties. Factors that may cause or contribute to the actual results or outcomes being different from those contemplated by forward-looking statements include: risks and uncertainties associated with the tender offer, including uncertainties as to the timing of the tender offer and merger, uncertainties as to how many of the Company's shareholders will tender their shares in the offer, the risk that competing offers will be made, and the possibility that various closing conditions for the transaction may not be satisfied or waived. Other factors that may cause the Company's actual results to differ materially from those expressed or implied in the forward-looking statements are discussed in the Company's filings with the SEC, including in its periodic reports filed on Form 10-K and Form 10-Q with the SEC. Such factors include (i) the risk that management may not fully or successfully implement its business plan or maintain profitability in the future; (ii) the risk that the Company will not be able to realize the benefits of its investments or exploit other opportunities of the business in a timely manner or on favorable terms;
(iii) prevailing market conditions in the IT services industry, including intense competition for billable technical personnel at competitive rates, strong pricing pressures from many of the Company's largest clients and difficulty in identifying, attracting and retaining qualified billable technical personnel; (iv) potentially incorrect assumptions by management with respect to the financial effect of prior cost reduction initiatives and current strategic decisions; and (v) other economic, business, market, financial, competitive and/or regulatory factors affecting the Company's business generally, including those set forth in the Company's filings with the SEC. Copies of the Company's filings with the SEC may be obtained at the "Investor Relations" section of the Company's website at www.analysts.com. The forward-looking statements made in this Form 8-K are made only as of the date of this release, and the Company undertakes no obligation to update them to reflect subsequent events or circumstances.



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit                                 Description

2.1       Agreement and Plan of Merger, dated August 27, 2013, by and among the
          Company, American CyberSystems, Inc. and ACS Merger Corp.*

4.1       Amendment No. 2 to Amended and Restated Rights Agreement, dated August
          27, 2013, by and between the Company and Wells Fargo Bank, N.A.

10.1      Retention/Transaction Bonus Agreement, dated August 27, 2013, by and
          between the Company and Brittany B. McKinney.

10.2      Retention/Transaction Bonus Agreement, dated August 27, 2013, by and
          between the Company and Lynn L. Blake.

10.3      Amendment to Change in Control Severance Pay Plan, dated August 27,
          2013.

99.1      Press Release, dated August 28, 2013.



* Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of such schedules, or any section thereof, to the SEC upon request.


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