2013 FORTUNE INDUSTRIES, INC. Special Meeting of Stockholders
MEETING DATE: June 20, 2013
For Holders as of: May 8, 2013
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. 5)
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Rule 14a-12
FORTUNE INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o No Fee required.
x Fee computed on table below per Exchange Act Rules 14a-6(1)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
Common Stock, Without Par Value, of Fortune Industries, Inc. and Class C Preferred Stock of Fortune Industries, Inc.
2. Aggregate number of securities to which transaction applies:
12,287,290 outstanding shares of Common Stock as of April 24, 2013 plus 2,306,000 shares of Common Stock that are issuable upon the exercise of outstanding warrants (including currently unvested options that will become vested at the effective time of the merger, all of which will be cancelled at the time of the Merger for no consideration) and 296,180 Class C Preferred Shares.
3. Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
The proposed maximum aggregate value of the transaction, for purposes only of calculating the filing fee, is $13,789,134 which is the sum of (1) product of 92,981 shares of Common Stock outstanding as of April 17, 2012 that are proposed to be converted into the right to receive the merger consideration, multiplied by the merger consideration of $0.61 per share; (2) 7,344,687 shares of Common Stock and 296,180 of Class C Preferred Shares which are being acquired for a combination: (i) $7,000,000 in cash, (ii) a promissory note in the principal amount of $6,300,000 and common shares of the Parent acquiring company equal to approximately 22% of its total outstanding shares valued at approximately $441,343. The filing fee, calculated in accordance with Exchange Act Rule 0-1 1(c)(1) and the Commission’s Fee Rate Advisory for Fiscal Year 2012, equals the proposed maximum aggregate value of the transaction multiplied by .00011460 ($114.60 per million dollars).
4. Proposed maximum aggregate value of transaction:
$13,789,134.
5. Total fee paid:
$1,466.66.
x Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
$1,466.66
(2) Form, Schedule or Registration Statement No.:
Schedule 14A
(3) Filing Party:
Fortune Industries, Inc.
(4) Date Filed:
May 22, 2012
TABLE OF CONTENTS
[GRAPHIC MISSING]
Dear Fortune Industries Shareholder:
At a special meeting of the Shareholders (described in the accompanying Notice and Proxy Statement), we will ask you to consider and vote upon a proposal to adopt the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), as amended, by and among CEP, Inc., a Tennessee corporation, CEP Merger Sub, Inc., a Tennessee corporation and wholly-owned subsidiary of CEP, Inc., and Fortune Industries, Inc., an Indiana corporation (the “Company”). We believe that this transaction creates new opportunities and flexibility for the Company and would generate several critical benefits that are urgently needed.
Among other benefits described in the Proxy Statement, your approval of the merger between Fortune Industries, Inc. and CEP Merger Sub, Inc. would result in the following:
• Each record and beneficial owner of the Company Common Stock (the “Holder”) holding fewer than five hundred one (501) shares thereof on the date of the Merger Agreement and until immediately prior to the effective time of the Merger (the “Effective Time”) (including any heir or devisee of such Holder holding such shares pursuant to the laws of descent and distribution in that Holder’s domicile), such Holder’s shares of Company Common Stock issued and outstanding immediately prior to the Effective Time will be canceled and extinguished and automatically converted into the right to receive Sixty-One Hundredths Dollar ($0.61) per share, without interest and less any applicable withholding taxes (the “Small Block Holders”) (a 22% premium over the volume weighted-average closing price of our Common Stock during the 30 trading days before the Company’s board approved the transaction);
• Each Holder of Company Common Stock that does not meet the conditions to qualify as a Small Block Holder will continue to own those shares of Company Common Stock owned on the Effective Date of the Merger in the Company, which shall be the surviving company in the Merger and which will continue to be called Fortune Industries, Inc. (the “Large Block Holders”);
• Elimination of the perpetual dividend on the Series C Preferred Stock which, if left in place, would reduce earnings available to Common Shareholders, by $1,356,653 in fiscal year 2012 and is scheduled to reduce earnings by $1,627,984 in fiscal year 2013 and $1,899,314 in fiscal year 2014 and each year thereafter. The new transaction structure is projected to increase cash flow by $347,405 over the next five years and by $1,899,314 each year once the term debt and promissory note have been extinguished;
• Elimination of the security interest granted by the late Carter M. Fortune (“Mr. Fortune”) to Indiana Bank and Trust, which has since been acquired by Old National Bank (the “Bank”) as collateral security for indebtedness unrelated to the Surviving Company (“Mr. Fortune’s Estate’s Loan”). As noted in the risk factors of the Company’s March 31, 2012, September 30, 2012 and December 31, 2012 Form 10-Q filings and the Company’s June 30, 2012 Form 10-K filing, Mr. Fortune’s Preferred and Common Stock, which has been transferred to Mr. Fortune’s estate and the Carter M. Fortune Living Trust (collectively, the “Fortune Interests”), respectively, and are held as collateral by the Bank for Mr. Fortune’s Estate’s Loan. Future default on these obligations by The Fortune Interests could have a material adverse effect on the Company’s (a) operations (because Mr. Fortune had guaranteed certain collateral obligations for the Company which could be denied at renewal), (b) capital structure and (c) corporate governance. If the Bank were to exercise one or more remedies with respect to Mr. Fortune’s Estate’s Loan, the Bank may be entitled to take title to the Fortune Interest’s Preferred and Common Stock which could result in the Bank becoming the
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