Measurement Specialties' CEO Executes Stock Transaction with J.P. Morgan
08 September 2004 - 1:55AM
PR Newswire (US)
Measurement Specialties' CEO Executes Stock Transaction with J.P.
Morgan FAIRFIELD, N.J., Sept. 7 /PRNewswire-FirstCall/ --
Measurement Specialties, Inc. (AMEX:MSS), a designer and
manufacturer of sensors and sensor-based consumer products,
announced today that Frank Guidone, CEO of Measurement Specialties,
recently executed a stock transaction through J.P. Morgan. "I have
been getting a number of questions regarding the transaction I
recently entered into with J.P. Morgan, described in my Form 4
(filed on August 31st), and felt it appropriate to describe the
structure of that transaction in greater detail," commented Frank
Guidone, Company CEO. Guidone continued, "In March of this year,
Four Corners Capital Partners, L.P., the partnership that holds my
MSS position, exercised the warrant that was issued when I agreed
to remain long-term as CEO of Measurement Specialties." As the
result of the exercise of the warrant, Four Corners is subject to a
large ordinary income tax liability. In order to generate cash to
cover that liability, Four Corners entered into a "Prepaid Forward
Sale Contract" with J.P. Morgan to sell 250,000 shares of MSS stock
24 months from now. J.P. Morgan has advanced Four Corners
approximately 75% of the face value of those shares on the
transaction date (floor price), while the shares are hedged. J. P.
Morgan's hedge includes shorting a portion of the stock and holding
a long- term position in the remainder. On the settlement date (two
years from now), Four Corners will be entitled to any gain above
the floor price, up to 200% of the floor price (the ceiling price).
For example, if J.P. Morgan hedged the shares at $24 per share,
Four Corners would be paid $18 per share now, and will retain any
upside two years from now on anything above $24 per share, up to a
$48 per share ceiling. The advantage of this structure (versus
simply selling the stock) is that it permitted Four Corners to
generate sufficient cash to pay its tax liability, but preserved a
significant opportunity to participate in any future appreciation
in the share price, above the initial 25% discount ($6 per share in
this example). Guidone concluded, "I feel strongly about the future
of MSS, and believe this approach demonstrates my confidence in our
growth." Measurement Specialties is a designer and manufacturer of
sensors, and sensor-based consumer products. Measurement
Specialties produces a wide variety of sensors that use advanced
technologies to measure precise ranges of physical characteristics,
including pressure, motion, force, displacement, angle, flow, and
distance. Measurement Specialties uses multiple advanced
technologies, including piezoresistive, application specific
integrated circuits (ASICs), micro-electromechanical systems
(MEMS), piezopolymers, and strain gages to allow their sensors to
operate precisely and cost effectively. Contact: Frank Guidone, CEO
(973) 808-3020 Boutcher & Boutcher Investor Relations Aimee
Boutcher (973) 239-2878 DATASOURCE: Measurement Specialties, Inc.
CONTACT: Frank Guidone, CEO of Measurement Specialties, Inc.,
+1-973-808-3020; or Aimee Boutcher of Boutcher & Boutcher
Investor Relations, +1-973-239-2878, for Measurement Specialties,
Inc. Web site: http://www.msiusa.com/
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