Note 19 - Subsequent Events

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

19. SUBSEQUENT EVENTS

Merger Agreement

On November 3, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Juneau Parent Co, Inc. (“Parent”), and Juneau Merger Co, Inc., a wholly-owned subsidiary of Parent (“Merger Sub”).

On the terms, and subject to the conditions, of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent. As a result of the Merger, each share of the Company’s common stock issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares held by (i) the Company, Parent or Merger Sub and (ii) stockholders of the Company who have validly exercised and perfected their appraisal rights under Delaware law) will be converted at the Effective Time into the right to receive $3.00 in cash (the “Merger Consideration”), without interest.

Consummation of the Merger is subject to certain closing conditions, including, without limitation, (i) approval of the Merger by the Company’s stockholders; (ii) absence of certain legal impediments; (iii) expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iv) CIFUS Approval (as defined in the Merger Agreement) having been obtained; (v) Defense Counterintelligence and Security Agency having approved a permanent or interim foreign ownership, control and influence mitigation agreement or measures for certain activities of the Company and/or its subsidiaries; and (vi) consents from the FCC and certain public utilities commissions and other localities having been obtained.

The Merger Agreement contains representations and warranties and covenants of the parties customary for a transaction of this nature.

The Merger is currently expected to close in the second half of 2021, although there can be no assurance that it will occur by that date. The transaction will result in the Company becoming a privately held company.

Certain terms of the Merger Agreement are summarized below. This summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated November 2, 2020 and filed with the SEC on November 3, 2020, which is incorporated in its entirety herein by reference to this Quarterly Report on Form 10-Q.

Restricted Stock Units and Performance Share Units

Immediately prior to the Effective Time, each restricted stock unit award issued under the Company’s stock plan that is subject solely to time-based vesting (the “Company RSU Awards”) and that is outstanding immediately prior to the Effective Time, whether or not vested, will be cancelled as of the Effective Time in exchange for an amount in cash equal to the product obtained by multiplying (i) the aggregate number of shares subject to such Company RSU Award by (ii) the Merger Consideration. Amounts payable with respect to Company RSU Awards will be paid not later than the next regularly scheduled payroll date that is at least two business days following the closing of the Merger Agreement.

Immediately prior to the Effective Time, each restricted stock unit award issued under the Company’s stock plan that is subject solely to performance-based vesting (the “Company PSU Award”) and that is outstanding immediately prior to the Effective Time will be cancelled as of the Effective Time in exchange for an amount in cash equal to the product obtained by multiplying the (i) the aggregate number shares subject to such Company PSU Award by (ii) the Merger Consideration. The aggregate number of shares of Company common stock subject to any Company PSU Awards will be determined based on the degree of achievement of the performance goals set forth in the applicable award agreement as of the Effective Time or such earlier time as determined by the compensation committee of the Company’s Board of Directors (the “Board”) and such Company PSU Awards will no longer be subject to any performance-based vesting conditions.  Amounts payable with respect to Company PSU Awards that are subject to vesting based on the price of Company common stock will be paid not later than the next regularly scheduled payroll date that is at least two business days following the closing of the Merger Agreement, and amounts payable with respect to all other Company PSU Awards will be paid two business days after the earliest of (a) the applicable time-based vesting date of the canceled Company PSU Award, (b) the date that is one year following the Effective Time, and (c) the termination of the employment of the former holder of such Company PSU Award without “cause,” in any case without interest.

Immediately prior to the Effective Time, each share of Company common stock granted to the directors of the Company that are subject to deferral elections (the “Deferred Stock Awards”) and that is outstanding immediately prior to the Effective Time will be cancelled as of the Effective Time in exchange for an amount in cash equal to the product obtained by multiplying (i) the aggregate number of shares of Company common stock subject to such Deferred Stock Award by (ii) the Merger Consideration.

Financing

Parent and Merger Sub secured committed financing, consisting of a combination of (i) equity financing and (ii) debt financing, subject to the terms and conditions set forth in the equity commitment letters and the debt financing commitment letter, respectively, with respect to the Merger. The equity financing and the debt financing, in the aggregate, will be sufficient for Parent, Merger Sub and the surviving corporation to pay the amounts required to be paid in connection with the Merger and the other transactions contemplated by the Merger Agreement. The Merger is not subject to a financing condition.

Go-Shop Period

Under the Merger Agreement, the Company has certain rights to facilitate competing acquisition proposals from third parties for 30 calendar days, beginning on the date of the Merger Agreement and continuing until 11:59 pm on December 3, 2020.  Beginning at 11:59 pm on December 3, 2020, until the earlier of the Effective Time and the termination of the Merger Agreement in accordance with its terms, the Company will be subject to certain to customary “no-shop” restrictions, subject to certain exceptions and “fiduciary out” provisions, as set forth in the Merger Agreement.

Termination

The Merger Agreement contains certain customary termination rights for the Company and Parent. The Merger Agreement can be terminated by either party if (i) the Merger is not consummated on or before November 3, 2021, which may be extended in 30-day increments to no later than January 3, 2022 in connection with regulatory approvals; (ii) any governmental authority or certain localities within the United States issues a final and non-appealable order permanently restraining or otherwise prohibiting the consummation of the transactions contemplated by the Merger Agreement; or (iii) the approval of the Merger by the Company’s stockholders is not obtained following a vote of the Company’s stockholders taken thereon.

In addition, the Merger Agreement includes certain termination fees payable by the Company or Parent if the Merger Agreement is terminated under certain circumstances.

Voting Agreement

On November 3, 2020, in connection with the execution of the Merger Agreement, TAR Holdings, LLC, a stockholder of the Company (the “Voting Agreement Stockholder”), entered into a voting agreement (the “Voting Agreement”) with Parent.

Pursuant to the Voting Agreement, the Voting Agreement Stockholder has agreed, among other things, to vote or cause to be voted any issued and outstanding shares of Company common stock beneficially owned by the Voting Agreement Stockholder, or that may otherwise become beneficially owned by the Voting Agreement Stockholder, during the term of the Voting Agreement, (i) in favor of adopting and approving the Merger Agreement and the transactions contemplated by the Merger Agreement, (ii) against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation of the Company contained in the Merger Agreement or of the Voting Agreement Stockholder contained in the Voting Agreement, and (iii) against any acquisition proposal or any other action, agreement or transaction that is intended, or could reasonably be expected, to materially impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect the consummation of the transactions contemplated by the Merger Agreement or the Voting Agreement. As of November 2, 2020, the Voting Agreement Stockholder held approximately 8.8% of the issued and outstanding shares of the Company.

The Voting Agreement will automatically terminate upon the earliest of (i) the vote of stockholders on the Merger, (ii) any termination of the Merger Agreement, (iii) any change in recommendation by the Board and (iv) the date that is 14 months after the signing of the Merger Agreement.